Cardinal Business Rule: ‘No Surprises’– Business More Predictable, More Manageable… Manager’s Golden Rule…

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‘No Surprises’ is the cornerstone of business management… Ultimately, it’s best for management, it’s best for employees, it’s best for customers, it’s best for the team… Surprises are the unexpected, unfavorable (or sometimes favorable), variances from expectations… According to Don McAlister; management is about planning, control, integration of processes that transforms knowledge resources of an organization into new knowledge sets that provide value for customers… Management success relies on adequacy, relevancy, predictability, and consistency in the flow and transformation of this knowledge… It’s management’s responsibility to anticipate and minimize ‘surprises’…

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‘No Surprises’– it’s a recurring theme in management… According to Michael D. Watkins, Max H. Bazerman; ‘No Surprises Management’ (NSM) is term long associated with the idea that the best way to succeed is not to ‘surprise’ people, especially bosses. It’s best to inform the boss (and others who have need to know) as soon as possible for such things as; expected shortfalls in performance, changes in tactics, new information impacting a business, and the like… The intent is to flag potential issues early so that remedies can be developed to solve or mitigate the issues… Often employees tend to cover-up or reluctant to risk carrying bad news up the chain of command, making a bad situation even worse… The ‘No Surprises Rule’ is a corollary to the Golden Rule: Do unto others as you would have them do unto you…

In the article Top Principles for Business Relationships: No Surprises by Joshua writes: In business you should strive not to surprise anyone… Not surprising people means telling them what you know and share information that is relevant to their interests… If a decision affects someone, try to involve them in the decision-making process or, at least to tell them about the decision as soon as you know it affects them… If you have a meeting with more than one person with information that could surprise any of them, do your best to share that information with each of them one-on-one before the meeting… Meeting time is for teamwork not for surprises; don’t ambush people…

‘Surprises’ make great movies and TV like drama to create situations, but in business it’s ineffective and destroys relationships, teams, companies… It means responsibility for sharing information and involving people in decisions; it means building teamwork and dependability… It can be hard at times because it forces people to share information with other people, even though you might feel ashamed about sharing… Usually feeling shame imply you did something counter-productive in business… so applying this principle keep things manageable…

In the article No Surprises Management by Tomas Kucera writes: ‘Surprise’ is arch-enemy of good management. If there is a single thing that shows a dysfunctional organization it’s when the management is surprised… When management is ‘surprised’ it means that open communication within the organization is broken… It means that management has not created an environment where people are open and trusting to share concerns… It means management must build ‘culture of trust’ where entire team is empowered with open communications to both give and receive feedback on all issues that might impact the organization… It means ‘No surprises’. Often people know about problems, or issues, or situations… but don’t realize that others also needs to know… When this happens it’s usually an indication of a more serious problem– lack of open communications– people are afraid– to speak-up, take risks, make mistakes… the signs of a ‘closed’ workplace environment…

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In the article What Customers Really Hate by Geoffrey James writes: There are many very different types of businesses, but many of them have one thing in common; they all tend to spring unpleasant surprises on customers after the customer has bought product, e.g.: With banks, it’s surprise of extra charges and fees; with airlines, surprise of delays and cancellations; with cable/telcom providers, it’s surprise of incomprehensible bills with unexpected price increases; and with social networking sites, it’s surprise of discovering that they’re violating your privacy… In all of these cases, you probably signed a contract (perhaps just by clicking through– ‘I Agree’) that warned you that those surprises might occur… However, what you needed to know was probably buried in pages of legalese: Who has time to decipher that?

Indeed, the companies in question are assuming and hoping that you won’t bother to (or are unable to) figure out what’s really in the contract because if they made it explicit, you might buy (or spend your time) elsewhere… In other words, ‘consumers hate companies’ that try to bullsh*t them into buying what they are trying to sell: People hate that… If there is any rule that’s true in business; it’s that everyone hates ‘unpleasant surprises’, especially after being handed a line of bullsh*t… So if you want loyal customers to sing your praises, always let them know exactly what they are buying before they buy– tell them the truth– even if that means that they might go elsewhere: That’s a policy of ‘No Surprises– it’s the most important rule in business…

In the article No Surprises: Key to VC Relationship by Satya writes: In the VC (venture capital) business there is a running joke about; the ‘Oh-shit’ meeting– it’s the first meeting  that takes place after an investment has been made. That’s when all of the bad news that was hidden during the due-diligence process gets uncovered and the VC is faced with the reality of the business for the first time (as well as founders having their reality check). Typically when VCs partner with a business in support of the founders’ vision, they expect to share-in all the information– good, bad, ugly…  And they expect to share-in it well before they invest in the venture… But bad decision are made, bad hires get hired, product releases fall flat, revenues don’t materialize… So the key to a successful business relationships between founders and VCs is one simple rule: ‘No Surprises’…

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‘No Surprises’ means that everyone has the same information at the same time so that they can react as cohesive team: The ‘No Surprises’ rule must apply to all sides, equally. ‘Trust ‘ is fundamental in business and the ‘No Surprises’ rule keeps the foundation of trust, pristine… So do yourself a favor, when talking with– management, employees, investors, partners, suppliers, stakeholder… establish a ‘No Surprises’ rule for all sides, and avoid the– ‘Oh-shit’ meeting… and that allows you to develop great long-term relationships…

 

 

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China’s Great Gambit: Spending $1Trillion to Build Hugh ‘New Silk Road’: Bold Strategy or Grand Ruse…

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China’s plan for a New ‘Silk Road’, also known as ‘One Belt, One Road’ (OBOR), consists of a network of trade initiatives that extend over land and sea through Asia, Europe, Africa… it’s the most significant global economic initiative in the world today, and it’s not getting the attention it deserves from Western media. The initiative is gigantic and its hope to lift the value of cross-border trade to $2.5 trillion within a decade… President Xi Jinping has channeled nearly $1 trillion of government money into the project. He’s also encouraging state-owned enterprises and financial institutions to invest in infrastructure, construction abroad… China’s web of trade would span over 60 countries that are home to 4.4 billion people, which is more than half of the world’s population… Further, the initiative would interact with economies representing more than 40% of the world’s GDP. The initiative is broken into a land component, known as ‘Silk Road Economic Belt’, and a sea component, called ‘Maritime Silk Road’. The ‘Belt’ will consist of a number of corridors connecting China to far reach of Eurasia by road, rail… The ‘Road’ will involve development of ports and shipping routes connecting Chinese harbors to Europe and South Pacific…

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According to Vikram Mansharamani; funding this massive program is not trivial… There are number of institutions on hand to support the funding of China’s grand vision… First, Beijing started a $40 billion ‘Silk Road Fund’ that has already helped fund a hydroelectric power project in Pakistan and invested in a liquefied natural gas project in Russia… Second, there’s the newly created, $100 billion Asian Infrastructure Investment Bank in which China controls 26% of the votes. Lastly, China Development Bank announced that it would invest a stunning $890 billion dollars in over 900 ‘One Belt, One Road’ projects across 60 countries… The Silk Road is far more than just trade; it offers a widespread exchange of knowledge, learning, discovery, culture… For the world at large, the ‘Road’ is monumental; the massive project holds the potential for a new renaissance in commerce, industry, discovery, thought, invention, culture… which could very well rival the original Silk Road… However, its outcome is far from certain…

In the article New ‘Silk Road’ Could Alter Global Economics by Robert Berke writes: China is building the world’s greatest economic development and construction project ever undertaken: It’s a New Silk Road… The project aim is to revolutionize a change of the economic map of the world. It’s also seen by many as the first shot in a battle between east and west for dominance in Eurasia… The ambitious vision is to resurrect the ancient Silk Road as a modern transit, trade, and economic corridor that runs from Shanghai to Berlin. The ‘Road’ will extend more than 8,000 miles, creating an economic zone that extends over one-third the circumference of the earth…

The plan envisions building– high-speed railroads, highways, energy transmission and distributions networks, fiber optic networks… Cities and ports along the route will be targeted for economic development… An equally essential part of the plan is a sea-based ‘Maritime Silk Road’ (MSR) component, as ambitious as its land-based project, linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean… When completed it will connect three continents: Asia, Europe, and Africa… The chain of infrastructure projects will create the world’s largest economic corridor, covering a population of 4.4 billion and an economic output of $21 trillion…

As part of the financing of the plan, China announced the launch of an Asian International Infrastructure Bank (AIIB), providing seed funding for the project with an initial Chinese contribution of $47 billion… China has invited the international community of nations to take a major role as bank charter members and partners in the project… Members are expected to contribute, and additional funding from international funds, including; World Bank and investments from private and public companies, local governments… Some 60 nations have signed on to become charter members including; 12 NATO countries that are among AIIB´s founding member states, including; UK, France, Germany, Italy, Netherlands, Luxembourg, Denmark, Iceland, Spain, Portugal, Poland and Norway… along with Australia, S. Korea and New Zealand… and many Silk Road and Asian countries…

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In the article Mapping China’s New Silk Road Initiative by hoexer writes: When China’s President Xi Jinping laid out his plans to establish a new ‘Silk Road’ across Central Asia in 2013, he was doing more than invoking China’s distant past… Instead he was sketching out new direction for Chinese trade and investment, one that aims not only to improve China’s links with Europe but also to facilitate China’s macroeconomic priorities and integration in the global economy. However this is a very bold plan and it face many serious challenges, e.g.; even though the proposed expanded trade route into Europe might seem like a ‘win-win’, from business perspective, the benefits are not clear-cut… According to Jonathan Silver; the ‘New Silk Road’ is the sort of strategic policy initiative that generates little in the way of obvious and direct tangible benefits… So while business would generally welcome the potential benefits, most would only take a direct interest in the concrete results, as they arise…

In the article China’s Bold Gambit for Trade with Europe by Julie Makinen and Violet Law write: For two years, President Xi has been talking up the sweeping strategy– known as ‘One Belt, One Road’ or OBOR– on his frequent trips abroad, while lining up financing plans at home and enlisting participation of state-run and private companies… With its  grand ambition some observers compare this new endeavor to U.S.‘s Marshall Plan to rebuild Europe after World War II, a game-changing effort that revolutionized trade and recast many long-standing relationships… It’s expected to cost 10 times more than the Marshall Plan, for which the U. S. spent the equivalent of slightly more than $100 billion in today’s money…

According to Christopher K. Johnson; with these initiatives China seeks to reinforce the emerging global narrative that it’s moving to the center of– global economic activity, strength, influence… According to Markus Taube; the initiatives will strengthen China‘s economic, diplomatic leverage in Europe and provide a political and diplomatic counter-weight against U.S... The more you might think about (the strategy), the more it makes sense… But others are more skeptical, saying China’s lofty language around ‘One Belt, One Road’ masks myriad questions about how much money will be spent on the projects and where, and who will benefit… According to Ian Storey; it’s generated a lot of buzz but no one is quite sure what it actually means…

In the article China’s Great Game: Road to New Empire by Charles Clover, Lucy Hornby write: After two decades of rapid growth, China is again looking beyond its borders for investment opportunities and trade, and to do that it’s reaching back to its former imperial greatness of the familiar ‘Silk Road’ metaphor. Creating a modern version of the ancient trade route has emerged as China’s signature foreign policy initiative… According to Valerie Hansen; it’s one of the few terms that people remember from history that does not involve hard power… and it’s precisely those positive associations that the Chinese want to emphasize. If the sum total of China’s commitments are taken at face value, the New Silk Road is set to become the largest program of economic diplomacy since postwar reconstruction in Europe covering dozens of countries with total population over 3-billion people…

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The scale demonstrates a grand ambition and significance as a way of defining China’s place in the world and its relationships… According to Anna Bruce-Lockhart; there are strong commercial and geopolitical forces at play here; first among them is China’s vast industrial overcapacity– mainly in steel manufacturing, heavy equipment– for which the new trade route would serve as an outlet… As China’s domestic market slows down, opening new trade markets could go a long way towards keeping the national economy buoyant… According to Nadège Rolland; this is not an economic project it’s a geopolitical project– it’s very strategic… Moreover, by striking up economic and cultural partnerships with other countries, China is hoping to cement its status as the dominant player in world affairs… According to Jin Liquin; many countries will verbally support the ‘One Belt, One Road‘ projects, but before they invest any resources they must be convinced that these initiatives will– promote growth and provide tangible returns for their investments…

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Insanity of User License Agreements: We All Just Click ‘I Agree’, But Many Don’t Know, Understand– What They ‘Agree-To’…

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Let’s be honest, no one really reads the ‘End User Licensing Agreements’ (EULA) or ‘Terms and Conditions’ (T&C) when you are downloading software, apps, accessing  websites… typically you just scroll down and click– ‘I Accept’. According to Mikko Hyppönen; the biggest lie on the Internet is– I have read and agree to the EULA… To prove the point, a company conducted an experiment– they buried a ‘herod clause’ in the EULA, which said that if you agree to these terms– you shall assign your first-born child to this company for the duration of eternity’.. six people clicked– ‘I Agree’… So they either didn’t read the EULA  or they  want to get rid of their first-born…  Most people just skim over the EULA verbiage and deal with the consequences of blindly signing with– I Agree…

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However it’s important to note that when a company presents you with its terms and conditions prior to an installation, your click on the ‘I Agree’ box is just as binding as signing your name on the bottom of a paper contract… According to Andrew Alleyne; you are accepting a set of legal terms and conditions, and by clicking the ‘I Accept’ button you are entering into a contract… According to Omri Ben-Shahar; it’s a century-old practice of having ‘informed consent’ as underpinning of modern business practices… when the user is presented with an EULA or T&C they are warned… and the company can absolve itself of legal responsibility for any issues that might arise… hence by failing to read and understand the terms of an agreement the user can sustain serious liabilities, if something goes wrong…

In the article Clicking ‘I Accept’ is Same as Signing Contract by Drew Hasselback writes: There are disclosures everywhere from the apocalyptic warnings about possible side effects that run on pharmaceutical ads to oxymoronic warnings on consumer products, such as; when a peanut butter label warns you the jar may contain nuts… According to Barry Sookman; many of these contracts hold-up in court, even though most people don’t reads them, it’s basic contract law… The court says there are two types of online agreements: (1) ‘clickwrap’ agreement is a type of contract that is widely used with software licenses and online transactions in which a user must agree to terms and conditions prior to using the product or service. The format and content of clickwrap agreements vary by vendor…

However, most of clickwrap agreements require consent of end users by clicking– ‘OK’, ‘I Accept’ or ‘I Agree’ button on a pop-up window or a dialog box, and (2) ‘browsewrap’ agreements, where the online terms are posted on the bottom of the webpage. The hallmark of a browsewrap agreement is that a user can use the site or services ‘without visiting the page hosting the… agreement or even knowing that such a webpage exists… Because the user is not required to express their assent as a condition of proceeding, enforceability of the latter types of agreements depend on whether a user has actual or constructive notice…

In the article EULA Dangerous Terms by Annalee Newitz writes: Millions of people are clicking ‘I Agree’ buttons that purport to bind them to agreements that they never read and that often run contrary to federal and state laws. These dubious ‘contracts’ are, in theory, one-on-one agreements between manufacturers/vendor and each of their customers. Yet because almost every computer user in the world is subjected to the same take-it-or-leave-it terms at one time or another, EULAs are more like legal mandates than consumer choices… They are in effect changing laws without going through any kind of legislative process. And the results are dangerous for consumers and innovators alike… It’s time that consumers understood what happens when they click ‘I Agree’… They may be inviting vendors to snoop on their computers, or allowing companies to prevent them from publicly criticizing the product they’ve bought. They also click away their right to customize or even repair the devices they purchased… According to Agustín Reyna; no matter what you call them, it’s a contract…

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The ‘common sense’ advice is simple: always read any user agreement before signing it… According to Joanne Lezemore; it’s really important for people to ‘understand’ all the terms and conditions before signing on the dotted line… While all user contracts are subject to the unfair terms in most contract regulations, this doesn’t mean you can challenge a clause just because you– didn’t know it was there, or you think it’s unfair… If it’s clearly written you are bounded by it… Most often online shoppers click the ‘T&C box’ to confirm they have read it, but in many cases they have not actually done so… Don’t assume that these users agreements are all like– each company has its own version and each website is different… hence make sure you read it, understand it, and you know exactly what you are agreeing to…

In the article It Pays To Read License Agreements by Larry Magid writes: OK, let’s be honest; you don’t read EULAs: How do I know? Because hardly anyone does. When you download and install software, you are usually in a hurry to take advantage of whatever it offers, and the EULA is just one more thing to spend time on, and you are not just talking about a couple of minutes– some of these ‘End User License Agreements’ are 2,550 words, or longer (that’s seven printed pages)… Many EULAs can be very deceptive, e.g.; when you take time to read them, you will begin to realize that you have probably given the company permission to install other unintended software or apps… that collects certain non-personally identifiable information about your Internet behavior… And according to many agreements, it will probably includes; URL addresses, web log data, search information you conducted on the Internet, online ads visited…

OK, so what’s the harm in collecting non-personally identifiable information? After all it’s done all the time… But there is a big difference between collecting non-personal information about what visitors are doing on your own site… and tracking– URL addresses of Web pages you view, web log information about Web sites that you visite… According to Parry Aftab; most EULAs do hold-up in court as long as they are reasonably clear… The courts have said that when you click on something that says– ‘I Agree’ then its legal consent… But there are exceptions, e.g.;  when agreement is incomprehensible, unclear, vague… then it may be unenforceable…

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However, the fact that a EULA might not be legally enforceable is of little solace because it’s being enforced on you whether you like it or not. Once the program is installed on your computer or smartphone, the damage is already being done and it doesn’t even matter if the contract that you agreed to is invalid… Simply by using your computer, you’re upholding your part of that contract by giving-up your information… Although the courts have ruled on the legality of EULAs, there are still many grey areas… In the mean time, it’s ‘user beware’… A click of the mouse, like a stroke of a pen, can get you into a heap of trouble: Be careful, be aware, and read those EULAs…

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‘We the People’ in Crisis: ‘Govern Of the People, By the People, For the People’ Is Meaningless Rhetoric…

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On the brink of the presidential election, it might be useful to examine the state of the U.S. Democracy and the role of ‘We the People’… The most striking lesson from contemporary U.S. election campaigns is how vast and growing the distance is between the rhetoric of politicians and pundits, and the actual deepening, immense, largely ignored problems that afflict ‘We the People’... The billions of dollars spent on dubious and manipulative advertisements that are only rivaled for the idiocy of ‘news media’ campaign coverage… which serves primarily to insult people’s intelligence, rather than expose the truth. Even more problematic is mainstream politics, which is increasingly irrelevant to the real issues that the nation faces… or perhaps more accurately, it’s mainstream politics that is the major contributing factor to the real issues the nation faces…

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Whatever happened to Abraham Lincoln’s; government of the people, by the people, for the people… According to Gilens, Page; the preferences of the average person appears to have only a minuscule, near-zero, statistically non-significant impact upon public policy… In other words, statistics say that your opinion– ‘We the People’– literally does not matter… The data is clear that U.S. is sliding steadily into oligarchy, mirrored in both the substantive effect on policy and in distribution of wealth… An oligarchy is a system where power is effectively wielded by small number of people… Members of the oligarchy usually includes; well-connected and politically powerful– people, institutions, trade unions, lobbying groups, business groups, special interest groups… Researchers have found that government policy follows the directives set-forth by these groups much more often, than the average citizen… According to E.J. Dionne; the U.S. is failing and it needs a better ‘We the People’…

In the article This Isn’t What Democracy Looks Like by Robert W. McChesney writes: Capitalism and democracy have always had a difficult relationship. The former generates severe inequality and latter is predicated upon political equality… Capitalist democracy therefore becomes more democratic to the extent that it’s less capitalist… According to John Nichols and Robert W. McChesney; U.S. is better understood by the rule of money rather than the rule of the people… it’s a U.S. form of plutocracy; it’s ‘Dollarocracy’, which means that those with the most dollars get the most votes and have the most influence… Dollarocracy is so dominant and so pervasive, that it’s accepted as simply the landscape people inhabit…

The notion of– ‘you get what you pay for’ applies in spades to spoils of government, and the tens of billions of dollars spent by corporations, institutions, special interest groups… on lobbying, public relations, campaign donations… and now dollarocracy is a large part of the overall economy. According to Larry Bartels, Martin Gilens, Jacob Hacker, Paul Pierson; the interests and opinions of great bulk of ‘We the People’ have virtually no effect over the decisions made by government. According to Joseph Stiglitz; the more divided a society is in terms of wealth and influence, the more reluctant the wealthy are to spend money on the people’s common needs… The wealthy don’t need to rely on government for parks or education or medical care or personal security– they can buy all these things for themselves. And in process they become more distant from ‘We the People’ losing whatever empathy they may once have had…

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In the article U.S. is a Constitutional Republic ‘not’ a Democracy by Daneen G. Peterson, Ph.D. writes: How often have you heard people refer to U.S. as a ‘Democracy’? And, when was last time that you heard U.S. referred to as a ‘Republic’? There is a very good reason that the ‘Pledge of Allegiance’ refers to the country as a ‘Republic’ and there is a very good reason that the ‘Declaration of Independence‘ and the ‘Constitution’ do not even mentioned the word ‘Democracy’… The Founders were very knowledgeable about the issue of democracy and feared a democracy as much as a monarchy…

They understood that the only entity that can take away the people’s freedom is their own government, either by being too weak to protect them from external threats or by being too powerful and taking away people’s freedoms. They knew the meaning of the word ‘democracy’, and the history of democracies; and they did everything in their power to prevent having a democracy… In a republic, the sovereignty resides with the people. In a republic, one may act on his/her own or through his/her representatives when he/she chooses to solve a problem. The people have no obligation to the government; instead the government is a servant of the people and obliged to its owner– ‘We the People’– but many politicians have lost sight of that fact…

George Washington, Alexander Hamilton et al… knew it and feared it, and they lived to see those fears through the blood, violence, and terror of the French Revolution… They were familiar with the excesses of democracy and though they sought the virtues of democracy, they created a political system specifically designed to shackle its vices… They held Rome as their model, not Athens… and they created a Republic, which is a synthesis of three forms of government, i.e.;  dictatorship/monarchy, oligarchy/aristocracy, democracy… They combined the virtues of each of these separate political systems, and while trying to mitigate their weaknesses…

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In the article U.S. in Crisis Mode, and We’re All Complicit by Jim Sleeper writes: The political election news is all about Trump, but the crisis that has made his victory isn’t about Trump… It’s about ‘We the People’ and what is happening in the U.S.– no populist  rhetoric of democracy can hide the truth that– what’s ‘happening’ to the people is– what’s ‘being done’ to the people’… If you believe that then the people are complicit because, after all this is democracy, where sovereign people have free-will to choose. But are ‘We the People’ as sovereign as we think, or are we caught in a spider’s web of; 800-numbered, sticky-fingered pick-pocketing machines, including; most news media that bypass people’s brains and hearts on the way to their lower viscera and wallets…

Why do people put-up with the casino-like financing, predatory lending, omnivorous marketing, deft political blame-shifting… and ‘We the People’ let them grope us, titillate us, intimidate us, addict us, track us, indebt us, and sell us illusory escapes that leave us too ill to bear the sicknesses or their cures… Instead, we point fingers, fists and even guns at people who are really no more guilty than us. Or we blame the inexorable tides of globalization and technological upheaval… We excuse or worse, even adore the real villains and when we do that, we are complicit… And here we are; conservatives blame liberals for summoning ‘movements’ that turn ‘We the People’ into ‘takers’… Liberals blame conservatives for turning ‘We the People’ into stupefied consumers and mobs. And each side is only half right; they are right only about how the other-side is wrong… Let’s stop listening to such one-sided thinking…

In the article What Is the Role of the People? by Edwin J. Feulner, Ph.D. writes: The stirring opening words of the Constitution proclaim that it’s the work of ‘We the People’… In the Declaration of Independence, the people announce that they are sovereign and free… In the Constitution, they defend this freedom by creating a unique government that derived its just powers from the consent of ‘We the people’. But what is the role of the people? According to John Adams; the first role– the first duty– of the people is to ensure that they remain– virtuous and free… According to Thomas Jefferson; it’s the manners and spirit of the people who preserve a vigorous Republic…

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The Founders placed great hopes in the Constitution, but they knew–‘no piece of paper’ can preserve liberty: That duty rested ultimately with ‘We the People’… The role of the Constitution is to restrain and to check, not to guarantee . The words of Declaration of Independence and the design of the Constitution can inspire, but on their own they cannot preserve the democracy (or even the republic, if you will): Only ‘We the People’ can do that… According to Ronald Reagan; freedom is never more than one generation away from extinction. ‘We the People’ have the obligation to pass the inheritance of freedom on, unimpaired, to the next generation… The true role of ‘We the People’ is to ensure that both ‘we’ and ‘government’ stay true to those principles… with fair and balance ‘free press’ and ‘open ballot box’: ‘We the People’ created this Republic and ‘We the People’ must preserve it…

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Managing ‘Entropy’ in Business: A Demon That Slowly– Erodes, Disrupts, Destroys Organizations…

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Murphy’s Law is well-known and it states; anything that can go wrong will go wrong, and a corollary version claims: left to themselves, things tend to go from bad to worse…Entropy’ is the phenomena that makes all things go from bad to worse, if left unattended… Unless new energy is constantly inserted in a structure, a business, an organization…  it will eventually, and inevitably fail… According to Walter E. Requadt; entropy is the ultimate natural law and it’s the reason, e.g.; paint peels, hot coffee turns cold, hot pans cool down, gasoline explodes, tires blow out, cream mixes in coffee… If an organization is to survive in an increasingly competitive marketplace, the organization must continuously adapt its environment– this requires continuous renewal… which means managing its ‘entropy’…

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All ‘things’ follow downward trends governed by nature’s law– to disorder, to erosion, to chaos… and that includes organizations… For organizations to be successful, managers must have the foresight, willingness to anticipate the effects of change by periodically reviewing and revising their strategic positioning, i.e.; mission, markets, competitions… or they will  fail… This means the mitigating factors that impacts performance, such as; rigidity, control,  bureaucracy, confusion… or, factors that cause friction, such as; bullying, manipulation, intimidation… or, factors that prevent workers from being productive, such as; micro-managing, short-term focus, job-insecurity, risk-aversion, silos… Entropy, if left uncheck, will destroy an organization…

In the article Leadership Must Overcome Entropy by Wallace Henley writes: Entropy is ‘state of sustained decay’…  According to Stephen G. Haines; all business problems conform to laws of inertia– the longer you wait, the harder the problem is to correct… Organizational entropy is tendency for any system to run down and eventually become inert… Think about an organization you’ve either been part of or known about that began with a flash, grew with speed of the expanding universe, reached dizzying heights and even stayed up there awhile, then declined and are now inert… They fell into ‘state of entropy’ because they did not correct ‘decay’, and then failed to overcome entropy that followed, inevitably… When an organization is in entropy they are just one step away from free-fall failure…

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In the article Organization Entropy by Grant Goddess writes: Organizations are like a pendulum– apply ‘energy’, i.e.; investment, management, accountability, governance… and the pendulum begins to swing, gears start to turn and work gets done… And as long as ‘energy’ is continuously applied the pendulum will continue to do work, but when you stop applying energy to it, it will slowly expend all of its existing energy and come to full stop… The key for successful organization is to understand that to keep the pendulum swinging it takes continual application of ‘energy’, or the motion will stop… Some entropy are unavoidable, e.g.; inefficiencies, shrinkage… but these are usually shrugged off as ‘cost of doing business’… While some entropy are avoidable, e.g.; incompetence, bad management… Hence, the challenge for an organization is to find areas of decay, and reduce or eliminate them… And by doing so, less energy is needed to keep the pendulum swinging– longer, stronger…

In the article Entropy In Organizations by Ari-Pekka Skarp writes: Entropy is found in all situations, it’s a law of nature and it says; that all things have a tendency towards a ‘state of disorder’ from a ‘state of order’… In other words, all things deteriorate over time if left unattended… Hence, if you think about a ‘working process’ you should not make the mistake of thinking that a ‘process’ can actually govern people’s behavior… Processes don’t use people, people use processes. This means that a working process is subject to change by actual behavior of workers. No matter how specific, measurable, actionable, rational, time-bound… a process is, workers will always try to adapt a process to their behavior, which may negatively impact the organization’s desired outcome… In practice this means that organizations must be in continual development…

In the article What Is Entropy in Business? by Kathryn McDowall writes: Organizations are either organic or bureaucratic in nature… Organic organizations invite innovation and creativity while seeking continuous open engagement with the environment in order to thrive… Whereas, bureaucratic organizations operate in a mechanistic closed style that is subject to entropy… Entropy occurs in organizations when the mechanical works of the bureaucracy break down as a result of– specialization, apathy, carelessness, lack of pride… A major cause of entropy in the bureaucratic environment involves expectations that individuals will follow routine orders and adhere to an organization’s rigid structure.  This means that workers’ initiatives are discouraged, and workers should only do what is expected of them, and no more…

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Eventually workers in bureaucratic organization become mindless and unquestioning because they depend upon the structure of the system to justify their actions… Entropy in the mechanistic organization eventually causes workers to become rigid in work and behavior and resistant to change… Entropy in an organization is reduced by workers’ greater participation in developing process and their involvement in decision-making… Workers are the front line; they deal with– customers, suppliers, partners… and are better able to determine their changing needs… and workers’ involvement develops a sense of ownership in the organization and it helps to develop greater job satisfaction…

In the article Managing Complexity and Entropy by Julian Birkinshaw write: It goes without saying that companies are often very complex organizations… Although complexity is a natural outgrowth for many successful companies, it’s also difficult struggle to avoid negative side-effects of ‘unintended consequences’ of complex organizational structures. Often these complexities manifest themselves in very tangible ways that can seriously impacts the very survival of an organization, e.g.; from inefficient systems and unclear accountability, to alienated and confused workers, to incompetent and unethical leadership… The result is that an organization is running very fast just to stand still… while entropy is slowly eroding at its core to eventual failure…

Leadership must be proactive with sharpen-focus to keep ‘entropy’ at bay… This involves continual organizational renewal and revision, e.g.; periodically eliminating layers of management, getting rid of old bureaucratic process that are no longer fit purpose… It means– providing workers with a clear, compelling reason to achieve an organization’s objectives. It means– refreshing the management team, engaging workers, making entire team explicitly accountable for outcomes, collaborate with suppliers, engage  partners,  encouraging open dialogue for new ideas and innovation… Organizations are their own worst enemy, they are by design– ‘entropic’…

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Much of the activities that organization take is about simplifying things, e.g.; delayering, decentralizing, streamlining, creating stronger processes for ensuring alignment… in simple language: as organizations grow and prosper they typically become– insular, complacent…  Management is more often focused on avoiding mistakes, securing their own position than worrying about organization’s health, well-being… and the signature brand of the organization becomes one of– inefficiencies, under-performance, lack of direction… also, workers become– detached, disengaged, uninterested… and the organization becomes aimless, inert… According to Peter Drucker; three things happen naturally in most organizations– under-performance, friction, confusion… and the fourth is– ‘entropic’…

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Brexit Redux– Doomsday, Panic, Armageddon, End-Of-World: Or, Overblown–Non-Panic, Panic; Non-Crisis, Crisis…

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BREXIT Wins: Government Resigns, EU Convulses, Gold Soars, Markets Panic, Rivers of Blood! Fire from Sky! Plagues of Locust! Collapse of Civilization! Triggering of Super Shemitah! Or, Not: Now that everyone has come out of their bunkers– everything is still the same, nothing has changed…. At this point, all that has happened is a non-binding, advisory referendum won by over 1 million votes… The UK vote was largely an opinion polls where; 51.9% (17,410,742) voted to ‘Leave’ the European Union (EU), and; 48.1% (16,141,241) voted to ‘Remain’… Since it’s a non-binding referendum, economic experts are urging people to take deep breath, and using the famous British saying; ‘Keep Calm and Carry On’

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According to Chris Gaffney; this is more of political crisis than financial, and that makes this much different from Lehman Brothers going under in 2008– It’s not a liquidity crisis; but it’s still a big deal… The claims about ‘end of Western civilization’ and the worst crisis since the Cuban Missile crisis, are obviously absurd… However, if the UK actually beings the exit process by invoking Article 50 of the Lisbon Treaty to formally leave the EU, then it’s more than a non-binding referendum– it’s for real and it will probably rattle markets all over again… In the interim, British pound will probably continue to trade at discount rate until there is more clarity about whether or not Brexit will actually take place…

In the article Brexit Effect: Signals Amidst the Noise by Aswath Damodaran writes: It’s easy to get caught up in the crisis of the moment but there are general lessons from Brexit, e.g.: No one should listen to the experts: There probably has never been an event where experts were all so collectively wrong in their predictions and so completely ignored by the public… Economists, policy experts, and central banks all inveighed against exiting EU, arguing that is would be catastrophic but their warnings fell on deaf years as voters tuned them out… Furthermore, it’s painfully clear that many of the so-called economic experts have lost creditability due to their insufferably pompous behavior, and head-in-the-sand prognostications…

Narrative beats numbers: In the Brexit debate it seemed to many that the ‘Leave’ side had the more compelling narrative (i.e., return to old Britain, which voters found appealing), whereas the ‘Remain’ side argued that this narrative was not plausible in today’s world, and its counter consisted mostly of numbers (i.e., the costs that Britain would face from Brexit)… Looking ahead to similar referendums in other EU countries, it’s highly likely that the same dynamic will be repeated, since few politicians in most EU countries seem to want to make a full-throated defense of being Europeans first…

Democracy can disappoint: The parallels between political and business governance are plentiful, and Brexit has brought to surface the age-old debate about merits of direct democracy… While some (mostly on the winning side) celebrate the power of free will, and others (mostly on the losing side) confirm that general population should never be trusted to make reasoned judgments on the future, and the vote is vindication of their fears. In business governance, this tussle is being continuously played-out, between those who believe that shareholders, as the owners of public businesses, should control outcomes; at one-end… and those who argue that incumbent managers and/or insiders are more knowledgeable, hence they should be allowed to operate unencumbered; at the other-end…

There are many in the business world who will look at the Brexit results and cheer for the Facebook/Google model of business governance, where shares with different voting rights give insiders control in perpetuity… While others argue strongly for business democracy and against entrenching incumbent managers… and hence it’s inconsistent to find fault with the British public for voting for Brexit. In democracy, people will get outcomes they might not like and throw a tantrum (as some in the Remain camp are doing) or threaten to move to Canada, or Switzerland… which is crazy… You may not like the outcome but as a political consultant said after his candidate lost an election; ‘people have spoken– the bastards’…

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In the article What Lessons Can Business Learn from Brexit? by Dawna Jones writes: Business can learn a lot from Brexit, and so can political decision-makers. While analysts and forecasters weigh-in on what happens next, now is a good time to reflect and learn from the Brexit experience… The decision to stay or leave the EU is a very complex mash-up of politics, geopolitics, economic, social entanglements… Voting made the decision look simple; but it’s complicated, e.g.; some experts say media failed to communicate what was really at stake, which opened process for political campaign style politics… And be as it may, there are lessons that business can learn from Brexit, e.g:

Business Lesson: Choose the Best Tool for the Task… By definition, voting is binary: ‘Leave’ or ‘Remain’… Binary decisions attract emotional responses, and information isn’t always necessary for strong opinions to be form… And when cognitive bias, any one of a hundred and fifty distorting perception of reality, are added to the mix; the effect is that the decision, using voting, isn’t based on information but on emotion. Brexit became a vehicle for the emotionally disenfranchised to declare their feelings– as one 92 year old blind senior did when asking; Which box is OUT (Leave)?

To avoid dividing nations internally, requires use of collaborative decision processes better suited for complex issues… While it’s hard to imagine any business using a company-wide vote to make strategic decisions, it’s easy to imagine a decision being treated as a binary choice or, worse, to forge ahead using only one option… Hence, unless integrated into the decision-making mindset is the discipline to step back and reflect and see a wider view… then decision-making is working with only narrow field of view, and that is very risky…

Business Lesson: Fear Vs. Hope and Aspiration… Fear, anger, and isolation forged the Brexit outcome; emotions are powerful… Many who voted ‘Leave’ feel disenfranchised by current economic conditions (much larger systemic issue), and the lack of trust is a key undercurrent… and without broader perspective, impact of real choice is beyond view… Business has, for the sake of keeping it simple, largely operated under the assumption that emotions have no place in the workplace. Oddly, managers who lack trust in their own abilities confuse– fear as a management style to control performance, behavior of ‘subordinates’. In contrast, where trust is instilled it becomes the emotional engine for initiating, sustaining a culture of innovation. Without trust, failure is punished; without failure, learning is impossible…

Business Lesson: Shifting from Duality to Unified Thinking… Voting when applied to an intense emotional issue results in duality: ‘We’ Vs. ‘They’. Then the discussion is focused on; who is ‘right’ and who is ‘wrong’… In the end, everyone loses because the collective health of a community is not factored in. Triggered by the binary nature, Brexit reeked of duality thinking... Early on before vote results were out, one ‘Leave’ proponent pointed to rally of the pound as evidence that the ‘Leave’ were ‘right’; it was a short-lived celebration before the pound tanked…

In Brexit, blame is stronger than vision by far; the real vote was for what was or wasn’t wanted, not for a future that supports the economic and social health of Britain. The ‘We Vs. They’ dynamic should ring some bells in business where executives, management have become distanced from what is going on in their business, otherwise known as ‘the gap’ between management and employees…

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According to David Jones; there is reason not to panic about Brexit– just do the very British thing and put– the kettle on/make a cuppa/brew/have a paned… There seems to be an ongoing social media frenzy which sadly will only increase the divides and incites further fear, hatred… Brexit is unchartered territory so you might as well make the most of the ride and grasp opportunity where you can… Whether or not EU is the right vehicle for Britain to achieve a future-minded form of governance is not the question. The question is: How can outcome of Brexit (what ever it might be) create– better economic, political, social future for all people– British, Europeans…  

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Curiosity is Engine of Business Success: It’s Driving Force Behind– Innovation, Invention, Discoveries…

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Business ideas are often born out of applied ‘curiosity’; it’s testing the old and seeking the new, which leads organizations to success. Curiosity is the engine for solving complex problems and identifying new opportunities… curiosity is a fundamental component to– creativity, innovation… and without it business lacks the energy to succeed… According to Kristof De Wulf; humans are curious by nature but organizations are not– most business practices fail because they don’t encourage or embrace curiosity. Organizations can only be curious because they are composed of people who are curious…

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According to Enrique Rubio; the most important creative process occurs when people question what they see; and in doing so they are letting ideas and doubts simmer in the ocean of ideas and experiences that they have in their conscious and subconscious. It’s a slow cooking process in which the ideas and doubts are the ingredients, ignited by the fire of curiosity… Curiosity is a fascinating act of insubordination against tyranny of the status quo, and by challenging the ways things are, and it unlocks limitless potential to innovate. The future will be less about money, power or size… and more about agility, networking and sharing… In order to survive and thrive organizations must grow into a permanent state of curiosity, and making it a core strategic competence…

In the article Curious People Are Destined for C-Suite by Warren Berger writes: Welcome to the era of the curious leader, where success may be less about having all the answers and more about wondering and questioning… In a PwC survey of more than a thousand CEOs; many of them cited ‘curiosity’ and ‘open-mindedness’ as traits that are critical for leaders in challenging times. Curiosity inspired leaders need to continually seek out fresh ideas and approaches that keep pace with rapidly change and highly competitive market environments. According to Brian Grazer; lead-by-curiosity is the engine that generate more ideas from all areas of an organization, and the catalyst for worker engagement…

The desire to keep exploring ‘new paths’ becomes even more important in today’s fast-changing, innovation-driven marketplace… While curiosity is known as igniter of startup ventures, it also plays an important role at more established organizations where leaders must contend with disruptive change in their marketplace… According to Ron Shaich; in today’s highly competitive business environment, a leader’s primary occupation must be to discover the future… It’s ‘a continual search requiring leader to be curious and keep exploring new ideas, including; ideas from other– markets, industries, even from outside the business world…

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In the article Business Value of Curiosity by Geoffrey James writes: Being successful at business requires many things, e.g.; courage, creativity, people skills… however, there is one character trait whose importance is sometimes neglected: Curiosity… It’s like a Swiss Army Knife with all attachments– it gets the job done in nearly every situation, and it’s easy to access once you’ve got it in your tool kit. In short, curiosity is at the core of every successful organization and without it success becomes very illusive… Curiosity is the foundation for:

  • Building customer relationship: People are drawn to those who show interest in them. Having an abiding curiosity in others give you the opportunity to learn new things about them, thereby making a deeper connections…
  • Increasing your business acumen: Being curious about your own industry and the industries of your customers drives you to learn more. As you satisfy your curiosity, you’re augmenting ability to add value to customers’ business…
  • Solving customer problems: It’s a truism that customers are looking for solutions to their problems. It’s only possible to create meaningful solution when motivated by true curiosity– about what’s actually going on and why problems occur…
  • Negotiating win-win contracts: Your ability to understand the positions of the other party are directly dependent upon your ability to feel true curiosity about them. If you’re not curious, you’ll end up arguing about issues that aren’t important…
  • Sales failures: When a customer buys from somebody else (or doesn’t buy from anyone at all), if you’re not curious about what happened, you won’t bother to find out why, and therefore can’t learn from failures…
  • Creating great products: Would-be innovators who aren’t curious about what makes people tick and why technology works (or doesn’t) can’t possibly create workable products or services that people want buy…
  • Motivating employees: Some bosses think of employees as cogs in a corporate machine. However, if you want to get the best out of people, you must be curious about their dreams and desires…

In the article Curiosity is Most Important Tool in Business by Garrett Moon writes: One thing separating those that are successful and those that are merely surviving is a spirit of learning and curiosity. Those that never stop trying, learning are the ones that continually leap ahead. Real curiosity comes from discerning eye; one that is able to see what others are doing right, and adapt it for themselves… It’s not copying, but a curious eye that is able to see the real lesson and value and apply it to their own situation… Hence, rather than observing ideas to copy them, curiosity observes to understand them…

And once understood they can be used to improvise new solutions for your business… but it also means asking  probing questions, e.g.; Why use that business strategy? What are the elements of that business model? How is marketing organized? Observe what you can and learn from it… Creativity is a state of mind, and it’s the ability to think in directions that rub against status-quo, and it’s extremely important in most organizations… Brilliant ideas are simply– new approaches to old problems… and all it takes is being curious, imaginative, creative, persistent…

According to Dr. Thomas Chamorro-Premuzic; curiosity is required before one can change and improve their organization; it’s prerequisite for growth… much like the commonly known psychological capabilities of– Intellectual Quotient (IQ) and Emotional Quotient (EQ). The Curiosity Quotient (CQ) is one’s affinity to be ‘inquisitive’ and open to new ideas, experiences, and similar to IQ and EQ… CQ improves one’s ability to understand, navigate complex issues:

  • Intellectual Quotient (IQ): IQ is an assessment of a person’s ability to think and reason… it’s a measure of a person’s cognitive capacity relative to their peers…
  • Emotional Quotient (EQ): EQ is the capacity of individuals to recognize their own, and other people’s emotions, to discriminate between different feelings and label them appropriately, and to use emotional information to guide thinking, behavior…
  • Curiosity Quotient (CQ): CQ is an assessment of person’s level of inquisitiveness, openness to new experiences… they tend to generate many original ideas and are counter-conformist, which leads to higher levels of intellectual investment and knowledge acquisition over time…

According to Ian Leslie; 21st Century economies reward those who have an unquenchable desire to discover, learn and accumulate a wide range of knowledge. It’s not just about who or what you know, but how much you want to know… Technology is rapidly taking over tasks historically performed by humans, and it’s no longer enough to be merely competent or smart– computers are both. But no computer can yet be said to be curious…

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According to Kevin Kelly; machines are for answers and humans are for questions… And, industries are growing more complex and unpredictable and employers are increasingly looking for curious learners– people with an aptitude for cognitively demanding work and a thirst for knowledge… The web is just as likely to neuter curiosity as supercharge it. It presents more opportunities to learn than ever before… Those who acquire the habits of intellectual curiosity early on will use computers to learn throughout their lives; those who don’t, may find they are replaced by one…

The age-old saying– curiosity killed the cat– was used often to prevent people from being curious and asking ‘unnecessary’ questions. The origin of the saying was an article in Washington Post of March 4, 1916, in which the story of a cat, Blackie… Blackie used to go to the chimney of fireplace to hang out. But one day out of curiosity, Blackie climbed up the chimney and, unfortunately, as the story goes, Blackie fell and broke his back, died… Yes Blackie was curious, yet it wasn’t the curiosity that killed him, but rather the lack of preparation for the mysteries that curiosity revealed…

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Dreaded Death Spiral– Negative Cash, Cash Flow: Revenue is Vanity, Cash Flow is Sanity, Cash is King…

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Cash may be king, but cash flow is the power behind the throne… Avoid the death spiral pattern: Low cash leads to increased borrowing, leads to increased interest, leads to lower profits, leads to lower retained earnings, leads to higher liabilities, leads to increased current liabilities, leads to  even lower cash flow— it can become death spiral. Cash is life-blood of  a business, but cash flow is the most important focus– no business can survive without enough cash to meet its immediate needs, and cash flow is the source of that cash in a sustainable business… An unprofitable business can survive if it has cash, but a profitable business will fail if it runs out of cash to pay liabilities…

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According to Angela Armstrong; cash is the new ‘purple’, it confers; liquidity, agility, power… a great example is the dominoes effect of Wall Street investment banks during the recent recession… The collapse of liquidity in several of the Wall Street investment banks cascaded into others, and just about toppling the whole industry… While it’s not easy to draw direct comparison between large capital markets and private enterprise, one thing is sure; cash is defiantly king– purple robes be damned– too little cash at exactly wrong time can kill a business, or even a whole industry… Lack of cash is one of the top three reasons that organizations fail…

In the article Cash Flow as Measure of Performance by Maxwell Samuel Amuzu writes: Cash flow is one of the most important measurements used to value a business– it provides a clearer picture of what the company is truly doing… The study of cash flow gained prominence as early as 1966, following studies by H. W. Beaver. His studies indicated that cash flow as a function of total debt was an effective way of forecasting the failure rate of a business… Also, it’s important to note that cash flows are generally ‘objective’ in nature and, as such, no value judgment exists as to how and when revenues may have been recognized… Cash flow statement recognizes the exact amount of cash that is either pass; out of, or into– an organization… In other words– profit is opinion; cash is fact…

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In the article Value of Cash by Hans Tallis writes: How much is $1 of surplus balance-sheet cash worth? Less as a company matures, it turns out… Several research studies have examined the relationship between balance-sheet cash (i.e.; cash, cash equivalents that appear on firms balance sheet) and market capitalization… A study suggest that investors value incremental balance sheet dollars between $0.23 – $1.80. The different valuations are explained by characteristics of organizations, e.g.; cash is worth more to companies,  in the following situations:

  • Investment options: Companies trying to develop a new technology, business model… in rapidly changing or consolidating sector(s)…
  • Unprofitable: Companies whose margins are too thin to generate sufficient retained earnings…
  • Limited or expensive access to external capital: Companies without a readily available source of liquidity…

In contrast, cash is worth less to companies that can be described as the following:

  • High credit quality: Companies perceived as investment-grade and have unfettered access to external capital…
  • Stable growers: Companies that have smooth, predictable investment needs and whose earnings comfortably cover those needs…
  • Over-stressed: Companies that use surplus liquidity is to pay down debt…

A clear understanding of both the benefits and costs of additional balance-sheet cash helps guide decision-making about appropriate levels of liquidity… In some case it’s may be best to simply return surplus cash to investors in the form of dividends… or, if it’s ‘cash trapped’ offshore (cash that firms earned overseas but, usually for tax reasons, they delay its return to their country of origin)– then it might be better to repatriate and distribute the cash, even if it costs upwards of 35% in tax leakage to do so… or, invest cash in highly competitive ‘moonshot’ project… or, if there is M&A opportunity that may be the best use of cash… or, it might be better to hold on to cash and take advantage of low debt costs to enhance financial flexibility…

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In the article Business’ Most Important Asset by Gene Marks writes: There is no clean definition for what constitutes sufficient cash liquidity. According to Ross Crane; firm is liquid when it has ability to continually fund business in variety of ways, e.g.; company’s liquidity can change immediately by something as simple as one large customer missing a payment or filing bankruptcy. Companies need variety of funding sources: cash, equity, lines of credit, debt… having a cash cushion is about ensuring short-term survival

According to Gary Harpst; keep (or have ready access to) enough liquid assets (i.e., cash and cash equivalents) to fund short-time obligations, and that allows adequate time to arrange financing or lower expenses… one way to determine the amount of cash cushion a firm might need is by comparing amount of time it takes to collect; cash, or receivables, or secure a loan, or negotiate equity arrangement… vs. lead time needed to pay near-term obligations without going default… The life-span of ‘working-capital’ accounts dictates how much grease is needed to keep gears turning on a short-term basis…

Bankers and investors don’t like surprises, and neither should you… If you think revenue are ebbing, or margins shrinking, or expenses increasing… then adjust, quickly. Having greater foresight, provides more time for triage, more credibility for options… Managing cash doesn’t mean stuffing it under a mattress– it means making sure there is enough available to keep playing through the hard times… once you run out cash there are no good options…

One of the classic sayings in business and it’s also one of the great truths– ‘cash is king’… Cash presents business with many opportunities, e.g.; it’s the ultimate reward for business success, it’s an opportunity to make additional investments, it’s security for an unknown future… However, it’s important to appreciate and understand that cash is not something that ‘just happens’…  Cash is the ultimate symptom of an organization– it’s the lagging indicator of business performance. Cash is either; realized or not realized, but only after series of related events, e.g.; successful execution of well-conceived, strategic business plan… which primes the pipeline for the flow of cash for the organization… 

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According to John R. Curry and Lyn Hutton; effective cash management is the crucial component of enterprise risk management… it’s the ability to access cash as needed, or  easily convert business assets to cash as needed… but managing cash and liquidity have risks that lurk around nearly every corner… Although a focus on liquidity is crucial, it’s also important to note that business must not lose sight of the its strategic objectives… Cash hoarding, or focusing singularly on minimizing risks incurs opportunity costs, which can lead to critical ‘shortfall’, i.e.; failure to meet business objectives…

Thus while there are costs for ‘too little’ liquidity (cash), there are also costs for ‘too much’ liquidity. Thinking ‘out-of-the box’ and asking speculative questions can enhance choices… The key is finding the right balance between; cash, cash flow, liquidity… and strategic and operational performance… the best time to think about business liquidity (cash) is when it’s not an issue, when it’s not a priority… It’s like chess; when opponent captures the king (cash) then the game is over… when they captures the queen (cash flow)– it’s beginning of the end of the game… Hence, protect ‘cash’ and use it wisely; energize ‘cash flow’ with creative strategic initiatives…

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Mindless, Zombie-Like, Brain Dead Management– They Sound Normal, Act Normal: But Just Walking Dead…

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All too often management is out of touch with their own– organization, customers, markets, workers, competition, partners… they are ineffective, incompetent… and phrases like ‘brain dead’, ‘zombie’, ‘same old, same old’, ‘total lack of creativity’… are being used to describe them… According to Gordy Curphy, Robert Hogan, Joyce Hogan; incompetent or brain dead management in most organizations is estimated to be at least 50%… According to Mike Myatt; it’s important to realize that just because someone holds a position of leadership, doesn’t necessarily mean they should– not all leaders are created equal. The problem many organizations suffer is recognition of good leaders from ‘brain dead’ ones…

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According to Randy Conley; many leaders have fallen victim to the brain dead (zombie) plague… organizations should be alert for the symptoms, e.g.; management that does the minimum amount of work required to keep the organization afloat… they stop pushing the boundaries to innovate and fail to adapt to the new realities of the marketplace… they are content with doing the– same ‘ol, same ‘ol… They waste energy focusing on all the reasons why something can’t be done rather than working to find solutions… They’re often heard saying; Why change? That’s the way its always been done around here…

According to Umair Haque: when you think of human achievement in the 21st century, the kind of soaring ambition and deep, world-shaking creativity that produces– art, cathedrals, symphonies– stuff of enduring, elevating value– it’s in tragically short supply… Perhaps that’s why for many workers– ‘work’ is very– dull, drab, meaningless. According to Juan Antonio Samaranch; brain dead leaders lack the will and/or skill to sustain effective action and resist creating positive change; brain dead leaders are usually supported by brain dead followers– the managers and workers who ignore or discount the warning signs and let bad leadership linger are just as brain dead…

 In the article Care and Feeding of Leader’s Brain by Sharon McDowell-Larsen writes: In business, brain power wins the day, not horsepower. The ability to think, communicate, exhibit emotional intelligence, creativity… and yet, if you were to design a lifestyle that is the antithesis of good cognitive function and long-term brain health, the life of an average executive would come pretty close… Consider the human brain– it’s the crown jewel… Scientists have learned more about the brain in last 10 years than in all previous centuries combined. Yet it remains for all intents and purposes, it’s a deep mystery: Weighing in at just three pounds, it consumes 15% of our total cardiac output, 20% of total oxygen consumption and 25% of total glucose use… When the brain is fully working, it uses more energy per unit of tissue weight than fully exercising quadriceps… The brain is the seat of intelligence, emotion, memory, behaviors… and yet for many in management the brain seems to stop working– they become incompetent, ineffective… mindless and brain dead…

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In the article Business is Brain-Dead by Umair Haque writes: Management is brain dead; as a result many organizations undergo a slow, barely perceptible but wholly pernicious death… It’s literally true– too often management has serious cognitive malfunction– it’s an inability to process reality… Many organizations fake-it, there not authentic, perhaps entirely fictional… these organizations are not just– sneaky, cynical, slightly evil, even deceitful; they are downright fakes, entirely imaginary. They might exist as organization, but there’s little or no economic-basis for it… They might exist in the world of bean counters, but they don’t exist in reality; it’s a theory-based entity…

When management is brain dead they have a ‘reality dysfunction’… and the organization becomes a fake– it’s a game– and the fake is sold to ‘consumers’, and then management gleefully drools over the so-called ‘profit’ that is ‘earned’ (or, extracted)… The point of an organization must be bigger than that– if the sum total of billions of person-hours of brow-mopping effort, vast amounts of human energy, is expended on a game of fake, and the mission of the organization is just to pass fake around… then macroeconomic result is ‘great stagnation’– in which the organization’s objective is just to paying one another with fake… it’s management’s failure to understand and eliminate or reduce the real societal issues, such as: pollution, obesity, under-employment, under-education, mistrust, anger, polarization, apathy, lack of fulfillment… the result is systemic crisis after crisis…

Management must wake up– move beyond brain dead– and create organizations that are not founded on fakery, but grounded in harsh realities of 21st century. Organizations that are not fighting against the future of prosperity, but fighting for it. Organizations that endures because they have the wisdom to matter– instead of those that vanishes into the dust bin of economic history, because it was too ‘brain dead’ ever to matter… However, if management’s ambition and breadth of vision is merely to book a ‘profit’, then maybe they should grab a crash helmet, hunker down… because fakery, at best, is a recipe for mediocrity… And worse, it’s recipe for punishment and pain, doled out from increasingly empowered, dissatisfied, fed-up folks… it’s time to get real…

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In the article The Side of Brain Most Important for Management by Lynn White, Esther Newall write: Psychologists have called the rational ‘left brain’, the part of the brain that deals well with logical and analytical thinking… the left-side brain is supposed to be the buttress for modern business management, but it appears that effective management must also involve something more… it must involve the ‘right brain’ and the ‘whole brain’… 21st organizations requires management that relies far more on giving value to– personal connectivity, intuition, insight, emotional intelligence… The old structures are dissolving as organizations increasingly work in– partnerships, alliances, sharing…

Management must move beyond the traditional command and control and develop the ability to manage ‘looser’ business models and operate more effectively within a web of connections and conflicting demands. Organizations are shifting to focus on ‘purpose’ which goes far beyond traditional– profit, maximizing shareholder value motivations… It’s a ‘whole brain’ management approach, and it means: Leaders without vision fail; leaders who lack vision cannot inspire teams, motivate performance, create sustainable value… A leader’s job is to align the organization around a clear, achievable vision– this cannot occur when management is brain dead…

A leader who lacks character or integrity will not endure, and it doesn’t matter how savvy, intelligent, affable, persuasive… if leader is prone to rationalizing unethical behavior, they will eventually fall prey to their own undoing. Optics over ethics is not formula for success. Best leaders are acutely aware of how much they don’t know; they have no need to be smartest person in the room, but have unyielding desire to learn from others… leaders who are not growing cannot lead a growing enterprise. When leader is not fully invested in the team, he/she won’t have a team– at least not an effective one. Never forget the old saying; people don’t care how much you know until they know how much you care…

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Leadership absent courage is a farce– not referring to arrogance or bravado, but real courage. It takes courage to break from the norm, challenge the status quo, seek new opportunities, cut losses, make the tough decision, listen rather than speak, admit faults, forgive the faults of others, not allow failure to dampen spirit, stand for those not capable of standing for themselves, and to remain true to core values. Courage is having strength of conviction to do ‘right thing’ when it would just as easy to ‘do nothing’… When an organization is shy of these traits, you probably have brain dead management…

 

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Power of Moonshot Thinking– Beyond Crazy, Stupid, Even Fringe of Sci-Fi: But Without It, There is No Giant Leap…

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It starts with a dream, a crazy thought– moonshot thinking is a concept that revolves around radical change… According to Shamash Alidina; moonshot thinking is the opposite of the way most organization think… most organizations think about how they can make themselves– 10% better, not 10x better… But 10% better is what most competitors do… But there is different way– it’s another level of thinking; it’s stupid, crazy, science fiction (Sci-Fi)… More than 50 years ago, President John F. Kennedy captured world’s imagination when he said; U.S. will land man on the moon and return safely to earth… and thus the term ‘moonshot’ entered the lexicon as shorthand for– ‘difficult and unimaginable task, the outcome of which is expected to have great significance’

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According to Scott D. Anthony and Mark Johnson; all good moonshots have three key ingredients: 1.) It inspires: Kennedy’s quote raises the spirit; a more typical corporate goal of increasing return on invested capital from 13.4% to 13.9%, not so much. That kind of financial target might be important, but it’s unlikely to get people to do extraordinary things… 2.) It’s credible: It’s easy to assume that a moonshot is just a ridiculous stretch target, but before Kennedy made his speech he had made a detailed assessment of the underlying technological trends to ensure that the goal had a reasonable chance of success… 3.) It’s imaginative: It isn’t an obvious extrapolation of what’s happening today (which for Kennedy would simply have been to fly farther into space), but something that offers a meaningful break from the past…

In the article Moonshots by Astor Teller writes: Moonshot’s live in a place that is between audacious, and pure science fiction… Yet the lessons people are taught from early age is to– play it safe, don’t do stupid things, walk before you run, slow and steady wins the race, under-promise and over-deliver… In repeating these mantras the message is very clear– don’t think big… Moonshot thinking starts with picking a big problem; something huge, unthinkable, impossible… Next it involves articulating a radical solution– one that would actually solve the problem, if it exists– something that might that sounds like it’s out of a Sci-Fi story… Also, there needs to be some kind of concrete evidence that the proposed solution is not quite as crazy or impossible as it might seem…

Something that justifies at least a close look at whether such a solution could be brought into being if enough– creativity, passion, persistence… were brought to bear on it. This evidence could be some breakthrough in technology that could actually make the solution possible within say, a decade or so… Without all of these things, you may have a Sci-Fi or crazy idea, but you don’t have a moonshot… And for sure not one where you can aim for new heights, and address a big challenge in a ‘maybe-not-totally-crazy’ kind of way… Often, if you just step back and apply enough audacity, creativity, persistence– you can get new perspective that makes doing the impossible, possible…

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In the article Future-Proof Your Business With Moonshot Thinking by Anthony Scherba writes: Any organization can use moonshot thinking to anticipate change– not to mention brainstorming more effective ways of developing a new competitive strategy by asking questions, such as: Is your competitive advantage truly sustainable? Will current strategies be competitive in your industry for 5, 10, 20 years? According to Clayton Christensen; there are serious pitfalls focusing solely on fulfilling the needs of current customers… The dilemma comes into play when a successful business gets comfortable, and neglects to explore new ideas because customers are happy with the current state of the solution…

But moonshot thinking is easier said than done: It’s very tempting to pour big money in futuristic hypothetical ‘what ifs’, as opposed to investing money in more immediate, less exciting improvement projects… But you don’t need to make big investments to start looking ahead; holding occasional brainstorming sessions focused on the future of your industry can help solidify your organizations place in that environment… and you can get a better sense of what challenges you are facing in future… and to better understand how you must evolve to drive the organization forward. Get ahead of the curve by asking ‘what if’, before your competitors do…

In the article Applying Moonshot Thinking by Zog writes: Great leaders should be the optimal blend of– creative and analytical…They should represent a constant balance between the– right and left brain. They should take great pride in trying something new knowing that there is risk but also great reward… Thinking in moonshots doesn’t mean abandoning the analytical side; it just dares you to think beyond immediate metrics and traditional practices– it allows freedom of thought… Making moonshot thinking part of strategy means– accessing risk and optimal flexibility… The correct blend of moonshot in a strategy can help propel your ‘brand’ and organization forward… Taking risks can yield incredible rewards; when an organizations allows its team members to think boldly they can reap great rewards… and even with failures the journey will make your organization stronger, more resilient… The best (most profitable) ideas often come when you allow  your people to forgo the status quo and think big…

Moonshot thinking is a very risky proposition, it’s totally different approach to innovation, but one of the most important lessons is that– some things are perceived to be impossible until you actually try them… The moonshot thinking is not encouraged or embraced by most organization, because of the risk it involves and low probability of successful outcome… but despite its hazardous aspect it does give whole new twist for thinking… Society needs 10x gains to solve many of its biggest problems; most of the difficult issues are exponentiating, e.g.; world population is rising on exponential curve… use of resources per person is rising on an exponential curve… Humankind needs to keep pace with these and many other challenges to manage and sustain life on this planet… and incremental thinking isn’t going to get you there…

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In the article Stop Looking For Moonshot Ideas, Focus on Simple Solutions by Bobby Emamian writes: Not every idea has to be an earth-shaking innovation… the key is that every strategic step (whether big or small), should be an important improvement for a more competitive organization… and although tempting, big or crazy ideas (moonshot) are usually a big waste of time and resources, and a distraction from the core business… Power of an idea isn’t in its– creativity, brilliance, originality… because ideas have no value until they are actually put into action… true value of ideas lie in their potential to solve real problems. The so-called ‘moonshot’ ideas that don’t solve real problems only distract the mission and derails progress…

Business needs ideas that will actually advance the organization– new initiative that address a real problem, or perceived problem, or issues that customers face, or that improve the existing organization… An idea need not be game changer ( moonshot) to make a big impact on the organization… The best way to avoid chasing useless ideas or ignoring important ones is to ensure all solutions align with organization’s core purpose… Next time someone comes-up with an idea that’s going to be game changer (moonshot); first, determine if it solves real problems or provides convenience that really matters.

Most organizations would be perfectly happy improving their organization by 10%… but according to Larry Page at Google; if you’re not doing some things that are crazy, then you are doing wrong things. He challenges his company (Google) to think in moonshots — ideas so large that they require the kind of creativity and innovation that are necessary to literally and figuratively put a man on the moon… This thinking tasks an organization to do things by 10x– 10x bigger, 10x cheaper, 10x faster… Either disrupt your organization, or someone else will… When you shoot for 10x improvement you approach the problem in a radically different fashion…

moon2 thDo you have a moonshot idea? Many people who discuss crazy ideas, get laughed at, e.g.; when the mission of landing man on the moon started, most people just laughed and thought it was crazy, bizarre! No one believed that it would ever happen. Who thought about; Internet, social media, driverless car, mobile phones, new medicines… would really happen? These all started with an idea that was thought to be stupid, crazy… Nobody actually knew how to build an airplane till it was done… We always appreciate– courage, and audacity of a moonshot, once it’s accomplished. Luckily there are a few people who are– stupid enough, bold enough… that they follow a dream: Yes most moonshot’s fail, but the few that do succeed change the world…

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