International Language Proficiency– Critical Skill for Expanding Global Companies: Lack of Language Skills– Kills Business…

Representatives that speak on behalf of international companies must have the ability to not only speak the language of the culture, but to clearly and accurately convey the full meaning of the message…

International language proficiency is critical skill for expanding companies, globally. Globalization is everywhere, and the need to bridge language gaps between international businesses must begin with clear and accurate knowledge and understand of different languages and cultures…

Losing business because of misunderstandings of language and culture can cost a company millions of dollars; language is an important differentiator and a competitive edge. Developing new business, especially negotiating complex contracts; increasingly requires a full knowledge of the language and culture of the region.

According to Elisabeth Lord Stuart; the lack of language skills among business people is enormous barrier for expanding into global markets. Developing trust with international customers and partners requires language and cultural skills. High proficiency in language produces better relationships and moves the business development process along more quickly…

Successful businesses recognize the need, in their international activities, to be accurate culturally, linguistically; and domestically with multi-lingual communities. Also, the development of customer loyalty requires knowledge and sensitivity to the host culture; where there may be the potential for lack of trust– and commensurate loss of business– underscores importance of a ‘useful’ knowledge of language and culture. As one business person put it– winning the war for talent is increasingly important for global business growth, and for domestic customers with language needs.

According to Jeff Standridge, Acxiom; we must  more than just build-up workforces in various geographies; we must work seamlessly across enterprise, regardless of location. That requires us to overcome any language barriers that exist between workers in different geographies. Without the ability to communicate clearly and effectively in both directions, than significant risks begin to enter the equation, including; lower quality, lost productivity, and increased training costs. By addressing these critical needs early on, companies like ours can see significant financial impact with global initiatives.

According to Tony Padilla, Boeing; ensuring you attract and retain top talent for globally competitive company requires an investment in developing cultural awareness and language skills in the workforce. Hiring managers must possess the skills necessary to recognize and assess this vital combination of global abilities, while each day creating and maintaining an open and inclusive environment that is sensitive to a multi-lingual workforce.

Ultimately, the key challenge for companies is to identify good talent with language skills… However, the lack of understanding and commitment from senior management to recognize the need for language skills, internally, will undermine the support for those skills… Management often considers language skills a ‘soft’ issue that does not require immediate or concerted efforts for change…

In the article Global Business Speaks English by Tsedal Neeley writes: Ready or not, English is the global language of business. More and more multinational companies are mandating English as the common corporate language in an attempt to facilitate better communication and performance across geographically diverse functions and business endeavors. Adopting a common mode of speech isn’t just a good idea; it’s a must, even for a U.S. company with operations overseas…

However, adopting a global language policy is not easy, and companies invariably stumble along the way. It’s radical, and almost certain to meet with staunch resistance from employees. However, to survive–thrive in a global economy, companies must overcome language barriers– and English will almost always be the common ground, at least for now.

The fastest-spreading language in human history, English is spoken, at a useful level, by some 1.75 billion people worldwide– that’s one in every four people. There are close to 385 million native speakers in countries like; U.S., Australia… about a billion fluent speakers in formerly colonized nations, such as; India, Nigeria… and millions of people around the world who’ve studied it as a second language.

An estimated 565 million people use it on the internet. The benefits of ‘Englishnization’ are significant; however, relatively few companies have systematically implemented an English-language policy with sustained results…

In the article Top 3 Useful Foreign Languages for Business Excludes Spanish by Susana Kim writes: What are the top three most useful languages for business after English? Surprisingly, Spanish didn’t make the cut despite being official language of 20 countries and spoken by over 329 million people, according to Bloomberg Ranking. Not surprising, Mandarin Chinese is the most useful language for business after English, spoken by 845 million people in the world’s second-largest economy, China. French (No. 2) and Arabic (No. 3) follow, with Spanish ranking fourth. Russian, Portuguese, Japanese, German, Italian, Korean, and Turkish followed.

To create the list, Bloomberg Rankings identified the 25 languages with the greatest number of native speakers, than narrowed the list to the 11 official languages of G20 countries, excluding those that designated English. French is spoken by 68 million people worldwide and the official language of 27 nations. Arabic, which is spoken by 221 million people, is the official language in 23 nations;

According to Bloomberg. Bloomberg notes their list differs from the top foreign languages studied in U.S. colleges in 2009 from The Modern Language Association, published in December 2010. Spanish topped that list with 864, 986 enrollment, dwarfing French which followed next with 216, 419 (No. 2), German (No. 3), American Sign Language (No. 4), Italian (No. 5), Japanese (No. 6), Chinese (No. 7), Arabic (No. 8), Latin (No. 9), and Russian (No. 10)…

In the article Workers Told, Ditch Local Languages for English by Rose Hoare writes:  While English is the de facto language of international business, more multinational companies are now mandating that employees communicate only in English. According to Tsedal Neeley, a professor at Harvard Business School; companies with employees in different countries needing to collaborate — whether it’s to integrate technology or cater to customers worldwide– managers and employees with international assignments must have a common language in order to communicate with each other.

This can be very bewildering for employees… From an assignment Neeley reported– that two years into English-only implementation at a company, 70% of employees reported feeling frustrated with the policy. Business must plan carefully before implementing English-only policy. In absence of a clear language strategy, people will be confused, hurt, diminished… Shifting a company’s entire operations into a new language isn’t easy.

What is Globish? English is the global language of business, yet English is also the native tongue of relatively few people, and it’s notoriously hard to learn. What can be done? According to Jean-Paul Nerriere; the answer is a new language: Globish. Globish is a kind of simplified English that is vastly easier to use and works almost as well as full command of the language, in most business situations.

The secret is employ stripped-down version of the vocabulary, crucially avoid all figurative language, and never tell jokes. There is a list of about 1,500 English words that can be used to communicate just about anything…

Isaac Chotiner, The New Yorker; observed that Globish is– overwhelming phenomenon– the language for non-English speaking business person closing deals with help of a small arsenal of English words… The  need for global language is a big part of globalization and dominance of English looks inevitable for long time to come. People with gift for learning languages will have a big advantage… But, for everyone else, why not start with Globish?

In the article U.S. Falls Behind in Foreign Languages by Joseph Picard writes: The U.S., in general, is not proficient in global languages. According to experts, this is not good for the nation, not good for humanity, and not good for the individual mono-linguist. U. S. needs a national commitment to strengthening its global languages proficiency.

According to Leon Panetta, CIA; to stay competitive in the global society, the U.S. needs more people with language proficiency. A number of reports over past several years point to shortage of translators in U.S. military and other agencies that work overseas and how that shortage affects knowledge, understanding of culture, and an ability to work together with foreign people and organizations. A significant cultural change needs to occur, which requires a transformation in attitude from everyone involved: individuals, government, schools and universities and private sector.

According to Arne Duncan; schools, colleges, universities… need to invest more in linguistic instruction.

According to Rush Holt; we need to alter dramatically how children learn language at an early age, and government should focus its efforts on teaching languages in grades K-12.

According to John Carlino; ability to communicate in other languages and cross-cultural skills are essential components of 21st century education. While English may be global language in business world, it’s important to point out that if everyone else speaks the language, but we don’t speak other languages or understand other cultures; we are at huge disadvantage in the global market.

According to Martha Abbott; it’s naïve to say ‘the world speaks English’ therefore I don’t need a foreign language… Who has the advantage in business when they know your language, but you don’t know theirs?

According to Stephan Chambers, Oxford University; speaking English was almost a precondition for success for non-native speakers, even though a second language was not essential to English speakers. However, if the question is: Is learning a second language an advantage, and is that advantage going to increase? Almost certainly, as the balance of economic power shifts, and as supply chains, sales, deals… start happening outside of the traditional western markets.

According to Jocelyn Wyburd, Cambridge University; opportunities presented by emerging BRICS economies and Latin America are making their languages particularly attractive to businesses and students – especially as Europe and North America struggle. However, it’s important to know that language for business purposes alone may prove shortsighted. The usefulness of language in business will rise and fall with unpredictable shifts in the global economy…

Remember, language is socially constructed, and therefore embedded in culture. Understanding the embedded meanings requires mastering the language and knowing the culture, which can be very difficult.

Most important, misinterpreting words or cultural meanings often has negative effects on entire communication interchange. In the case of business deals, it’s a deal-breaker…

When Business or Life is Not Working– Its Dead: Get Off the Proverbial Dead Horse– Stop Dragging It Around…

When a horse is dead– it’s a dead horse, get off– there’s no sense in kicking or beating it– it’s a lost cause.

If the horse you’re riding is dead…Get Off! If you’re not getting anywhere in your business, life… if you keep doing the same old things day-in and day-out with the same old tiring and dismal results, then you’re riding a dead horse.

For example, if you are salespeople and the customer is unwilling or unable to make a reasonable commitment to move the sales process forward, then the salesperson must be willing to say– this isn’t working and consider the possibility of walking away from this sale opportunity.

If you are not willing to turn down business when things go sour, you’re going to be doing the equivalent of riding a dead horse. According to the tribal wisdom of the Dakota Indians, passed on from generation to generation; when you discover that you are riding a dead horse, the best strategy is to dismount.

In contrast, many people in today’s business environment are in denial when they find out their ‘horse’ is dying or dead; they say things like– ‘This is the way we always have ridden the horse’ or ‘Appoint a committee to study the horse’ or ‘Buy stronger whip’ or  ‘Change riders’ or ‘Promote the dead horse to a supervisory position’ The analogies to business are readily apparent, and too often we focus on everything but the dead horse, and forget what it takes to win the race…

In the article Riding a Dead Horse by Peter Vajda writes: Dead horses are all ‘shoulds’ and ‘shouldn’ts’ that drive our lives. Often completely unaware of them. These dead horses take the form of self-images that we think we need to live up to, beliefs, habits, routines… that run our lives; they show up as relentless demands and expectations we make on ourselves. These dead horses are forever showing up in our jobs, life styles, relationships, friends, co-workers, spouses, partners…

Yet, for no apparent reason, we continually find ourselves in states of; regret, agitation, irritation, frustration, resentment… as we continue to try to ride our dead horses. Perhaps right here and right now, you are spending precious time and energy trying to resuscitate your dead horses, painfully and frustratingly dragging them along into today, tomorrow, next week, next month, next year…

We make ourselves believe if we just try harder that these dead horses will come to life, better than ever. Or, we tell ourselves if less demanding and more accepting these dead horses will generate renewed energy and live to ride again. Or perhaps, we wish, we hope, and we pray that a miracle will happen and our dead horses will suddenly become healthy so we can ride off into the sunset. Just like TV’s fantasies and fairy tales.

Maybe we’re rationalizing that our horse really isn’t dead; that all it needs is some good old R&R. So we reject reality and distract ourselves from the truth of our situation. After days, months… of resisting, rejecting, and distracting ourselves, we’re still waiting for the dead horse to show some life, and so we wait, and wait, hope and pray…to no avail.

Then, there are those of us who try to convince ourselves that life will be grand if we just– carry the horse: it will come out of its coma at some point. So, we just haul it around until life comes back… We think that if we nurture it, support it, help it… it will resurrect: Denial, Delusion…

In the article When Riding a Dead Horse, Dismount by Bill Carney writes: Most successful sales reps control the things which are under their power, at any given moment. They also can mitigate factors that are out of their control, which disrupt the flow of their process. One common flow disruption is– falling in the dead zone. For example; some sales reps will dismount without checking to see if the customer is actually dead, when the customer may not be responding; even though it might still be alive. 

Also, imagine that you’ve just met an ideal customer that fits your high probability profile. You’ve had first meeting, completed all your commitments… but, you hear nothing from the customer– no calls answered, no responded emails, no pulse… There are many statistics floating around that  indicate it’s harder than ever to get a productive engagements with customers. You may have a routine that work for customers, but now you may have come across a dead zone.

While it’s ok to stick with routine content that’s effective for some customers– you should strive to keep from being routine; all customers are different. Make sure that engagements are relevant; also, it pays to initiate quick checks, from time-to-time, to see if customer is still alive. If you don’t get a committed reaction it might be time to dismount, or pass them onto a marketing nurture campaign. If you do get a good response; it’s time to giddy-up…

In the article Don’t Gamble on Low Probability Prospects by Jeb Blount writes:  In the chorus of Kenny Roger’s famous song, ‘The Gambler’, the old gambler urges the young man to, ‘know when to walk away, know when to run’. Packing up and walking away from a deal that is going nowhere is one of the hardest things to do for a salesperson. Even some of the best salespeople continue to work on accounts that, from any observer’s point of view it’s a complete waste of time, but these sales pros are wise enough to know that some deals are just dead horses; it’s time to get off and move on. 

Then there are legions of other salespeople that never seem to let go. They hold on until the final painful moments when prospects, that never had any intention of buying, finally break the truth to them. They make excuses and they angrily blame the buyer, market, or competitors. I hear the same sad stories again and again. For example; deals lost, time wasted on prospects that were not the decision makers, already under long-term contracts, just shopping for price to keep their current vendor honest, or who were not in the buying window.

Each working day salespeople across the globe are surprised to find out– after investing blood, sweat, and tears, and promises to the boss– that the account they have been working on won’t close; riding the dead horse. And to make things worse, many of these salespeople were completely blind to all of the clues that were blinking like neon signs saying; this prospect will not close, move on!

On the other hand, I know sales professionals who have a keen sense of the viability of a deal. For example; using solid questioning strategies, simple mental checklist, intuition… they can quickly extract themselves from a sales process once they believe that the prospect or customer is unprofitable or a waste of time. This ability serves them well because it allows them to focus their most valuable resource– time– on accounts that have a high probability of closing, even though sometimes it may be wrong. These are the sales pros that produce the most consistent results year in and year out… and, they quickly dismount the dead or dying horses…

Generations of just doing what we’ve been told have left far too many of us in a mind-numbing and habituated way of thinking and living. For far too long, we’ve allowed ourselves to just keep doing what we’ve always done–mindless and without consideration of  consequences… This is your wake-up call! Change Your World!  Tired of having the same old conversations in the same old way? Be the one to make the difference and lead the way…

According to Harry K. Jones; organizations need to get serious about identifying stumbling blocks, sacred cows, dead horses… and not waste time; just eliminate them. The sooner it gets done; the sooner you can focus on more productive and profitable targets. Organizations no longer have the luxury to allow the dead horses to weigh them down in their journey to success…

According to Peter Vajda; are you just telling yourself a story– having set out with good intentions, believing in what you thought was your vision or purpose, working hard and sacrificing along the way, becoming who you thought you should be, or perhaps even giving up what you wanted or who you wanted to be– that if you just ‘stick it out’; all will be well? 

But, are we in denial, with false hopes, as we keep egging-on our horses. We dig in our spurs, but move nowhere. Or, we’re stuck on a plastic horse on merry-go-round, moving, always engaged in doing, going around in circles, but in reality, going nowhere. 

People who ride dead horses every day know what they have to do, but they have no idea where they’re going… At end of day, the bottom line is simply: when the horse dies, get off!  A year from today, your life will be different. Guaranteed, it will be different! Whether it’s good different or bad different, is the choice. Much depends on whether the horses you’re riding are healthy or dead.

According to Anne Sadovsky; the way you did your job last week is questionable this week, and probably obsolete next week! We all know it– yet we still feel surprised and even resist it, while things change around us.

In fact, some people dig in their heels, and declare it was okay the way we’ve always done it, only to be left behind. These are the folks trying to ride dead horses…


Thanksgiving– Reasons for Thankfulness: Keep Perspective– Generosity, Gratitude, Harvest, Wealth, Share Abundance…

Gratitude is the inward feeling of kindness received. Thankfulness is the natural impulse to express that feeling. Thanksgiving is the following of that impulse. ~Henry Van Dyke

Thanksgiving: In the fall of 1621, the Pilgrims, early settlers of Plymouth Colony, held a three-day feast to celebrate a bountiful harvest, an event many regard as the nation’s first Thanksgiving. Historians have also recorded ceremonies of thanks among other groups of European settlers in North America, including British colonists in Virginia in 1619.

The legacy of thanks and the feast have survived the centuries, as the event became a national holiday in 1863 when President Abraham Lincoln proclaimed last Thursday of November as national day of thanksgiving. Later, President Franklin Roosevelt said Thanksgiving should always be celebrated on the fourth Thursday of the month to encourage earlier holiday shopping…

Here is except of Abraham Lincoln’s ‘Proclamation of Thanksgiving’, Washington, D.C., October 3, 1863: … I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next, as a day of Thanksgiving and Praise to our beneficent Father who dwelleth in the Heavens.

And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings, they do also, with humble penitence for our national perverseness and disobedience, commend to His tender care all those who have become widows, orphans, mourners or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the interposition of the Almighty Hand to heal the wounds of the nation and to restore it as soon as may be consistent with the Divine purposes to the full enjoyment of peace, harmony, tranquillity and Union…

In the article Pilgrim Lesson: Spreading the Wealth Brings Shared Poverty by Karen Gushta writes: Those who still think that it’s a good idea for government to spread the wealth around, must think they’re wiser than God. That’s what Plymouth governor William Bradford concluded nearly 400 years ago after one of America’s first socialist experiments led not to shared-wealth, but pooled poverty.

The Pilgrims, whom we remember on Thanksgiving Day, started life in the New World with a system of common ownership forced on them by Plymouth colony investors. That quasi-socialist arrangement proved disastrous, and had to be scrapped for one which gave these first Americans the right to keep the fruits of their labor — and incentive to produce more.

The 104 people who arrived at Plymouth Rock on December 21, 1620, were organized under a charter which imposed a seven-year period of joint ownership. Thus, from the day they arrived in the new world, all clothing, houses, lands, crops, and cash were jointly owned. No matter how hard a man might work, he had little hope of personal gain for his effort. Unless changed, the charter was an iron-clad guarantee of seven very lean years. It led to a social order at odds, and what 19th century historian James Eggleston called sinking of personal interest … dissensions and insubordination… and famine’.

The communal arrangement also ill-fitted the Pilgrims for the demands of life on the edge of howling wilderness: The Pilgrims buried 44 people within the first three months, and a total of 50 poor wretches succumbed within the first year. The Pilgrims gathered what Governor Bradford described as a small harvest and celebrated their first Thanksgiving with the Indians in autumn of 1621, and  another small harvest followed in 1622. The meager return came, in part, because the Pilgrims were unskilled at farming and because of the sandy New England soil. But more important, it was lack of any promise of return for their labors that caused even these God-fearing and devout settlers to fail to fully work the land.

Bradford wrote; that common ownership was found to breed much confusion and discontent, and retarded much work which would have been to the general benefit and comfort. After much debate, Pilgrims abandoned the charter in March of 1623, and Governor Bradford allowed each man to plant corn for his own household… every family was assigned parcel of land, according to proportion of their numbers… this then was very successful. It made all hands very industrious, so that more corn was planted and harvested than otherwise would have been the case… Suddenly, these heretofore mediocre farmers became capitalist, and took great leaps forward.

The authors ‘D. James Kennedy and Charles Hull Wolfe’ report that while the Pilgrims planted 26 acres of corn, barley, and peas in 1621, and nearly 60 acres the next year, they planted 184 acres in 1623. Bradford reported that– instead of famine, now God gave them plenty, and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God. Under the new system of private enterprise, ‘any general want or famine hath not been amongst them since to this day’. With the Indian trade and ample food supply, the Pilgrims grew in prosperity and were soon able to buy out the interest of investors and get clear title to their land… However, four centuries later it’s lessons we still haven’t mastered.

In the article Thanksgiving: An American Celebration of the Creation of Wealth by Gary Hull writes: Thanksgiving celebrates man’s ability to produce. The cornucopia filled with exotic flowers and delicious fruits, the savory turkey with aromatic trimmings, the mouth-watering pies, the colorful decorations — it’s all a testament to the creation of wealth.

Thanksgiving is a uniquely American holiday, because this country was the first to create and to value material abundance. It’s America that has been the beacon for anyone who wants to escape from poverty and misery. It’s America that generated the unprecedented flood of goods that washed away centuries of privation. It’s America, by establishing the precondition of production — political freedom — that was able to unleash the dynamic, productive energy of its citizens.

This should be a source of pride to every self-supporting individual. It’s what Thanksgiving is designed to commemorate. But there are those who want to make Thanksgiving a day of national guilt. We should be ashamed, they say; for consuming a disproportionate share of world’s food. Our affluence, they say; constitutes a depletion of the planet’s resources, they say; are cause, not for celebration but atonement. But, all production is an act of creation. From food and clothing to science and art, every act of production requires thought.

This virtue of productiveness is what Thanksgiving is supposed to recognize. Sadly, this is a virtue rejected not only by the attackers of this holiday, but by its alleged defenders, as well. Many Americans make Thanksgiving into a religious festival, and they agree with Lincoln, who, upon declaring Thanksgiving national holiday in 1863, said; we have been the recipients of the choicest bounties of heaven. They ascribe our material abundance to God’s efforts, not people. That view is a slap in the face of any person who has worked an honest day in his life.

The values for this holiday are not faith and charity, but thought and production. The proper thanks for one’s wealth go not to some mystical deity but to oneself, if one has earned wealth. The liberal tells us that our food on Thanksgiving is the result of mindless, meaningless labor… The conservative tells us that it is the result of supernatural grace. Neither believes that it represents individual achievement. Wealth is the result of individual thought and effort, and each individual is morally entitled to keep and enjoy, the consequences of such thought and effort. He should not feel guilty for his own success…

Thanksgiving is holiday celebrated primarily in the United States and Canada, and  is celebrated each year on the second Monday of October in Canada and on the fourth Thursday of November in the United States. Historically, Thanksgiving had roots in religious and cultural tradition. Today, Thanksgiving is primarily celebrated as a secular holiday. Prayers of thanks and special thanksgiving ceremonies are common among almost all religions after harvests and at other times.

The holiday’s history in North America is rooted in English traditions dating from the Protestant Reformation. It also has aspects of a harvest festival, even though the harvest in New England occurs well before the late November date of the holiday. In the English tradition, days of thanksgiving and special thanksgiving religious services became important during English Reformation…

Other places around world observe similar celebrations, for example: In Korean culture, the festival of Chuseok is celebrated typically around fall, and fills a similar social role as Thanksgiving. In Japan, Labor Thanksgiving Day is a national holiday… Thanksgiving, in America, was a feast among Pilgrims and Native Americans to celebrate their– wealth and their ability to produce, however small it might be… Thanksgiving is great opportunity to think of wealth as abundance of things that you value, for example: Family, Good Health, True Happiness… Be thankful. Be content. Be rich…

Leadership Strategy for Greatness– Hedgehog or Fox: Classic Struggle for Excellence– Do Just One Thing or Do Many Things…

Any company can find a ‘hedgehog concept’…  and, any company that says they can’t is simply whining. ~James Collins

The hedgehog concept is a corporate leadership strategy outlined in the book ‘Good to Great’ by Jim Collins. The original story of the hedgehog and the fox is derived from an ancient Greek poem believed to have been written by Archilochus. In it, a cunning and brilliant fox grasps the complexity of the woodlands around him. He sets his mind on eating a hedgehog, and spends hours plotting the perfect attack.

Meanwhile, the hedgehog, described as simplistic and somewhat dowdy, goes about its business unaware. When the fox ambushes, the hedgehog rolls himself into a spiny, impenetrable ball. Undeterred, the fox keeps re-strategizing, but the pattern repeats itself over and over. In the original poem it famously concludes: ‘The fox knows many things, but the hedgehog knows one big thing’. British philosopher and social theorist Isaiah Berlin expanded on this concluding idea in an essay called The Hedgehog and the Fox’. Berlin used the poem to divide world thinkers and philosophers into two groups, ‘hedgehogs and foxes’.

Collins’ hedgehog concept is the application of these distinctions to the corporate world.  Collins speculated that if companies were more like the hedgehog — that is, focusing on one thing and doing it well — all the cunning and brilliance out there would not be a threat to success. Those who built the ‘good to great’ companies were, to one degree or another, hedgehogs, says Jim Collins. They used their hedgehog nature to drive toward what he came to call a ‘hedgehog concept’ for their companies.

While, the leaders’ of comparison companies tended to be foxes, never gaining the clarifying advantage of a hedgehog concept; instead they are; scattered, diffused, and inconsistent. According to John F. Kihlstrom; what separates those who make the biggest impact from all the others, who are just as smart, are the hedgehogs. For example: Freud and the unconscious, Darwin and natural selection, Marx and class struggle, Einstein and relativity, Adam Smith and division of labor– they were all hedgehogs…

According to Jim Collins; the best leaders and corporate strategists reach success because they have identified their company’s unique ‘hedgehog concept’. Identifying this concept starts with three separate assessments. First, leaders must ask themselves– what the company is deeply passionate about.

Next, there should be a frank assessment of– what the company realistically can and cannot be the best in the world at. Finally, there needs to be a determination of– what drives the corporation’s ‘economic engine’ — that is, an identification of the relevant profit structure and where it is rooted.

The hedgehog concept is where these three assessments overlap. A corporation’s ‘one big thing’ can be found in that intersection. One of the biggest benefits of the hedgehog concept is its consistency. Companies that devote themselves to one goal and constantly default to their known strengths in times of crisis are often better poised to overcome rough patches than are companies with many competing visions.

While the concept is certainly no guarantee for business success, it has gained a lot of credibility as a workable model. The hedgehog concept can also be useful to individuals. People who are unsure of their next steps in life or who are looking for ways to maximize their effectiveness are often well served by identifying their own personal hedgehog.

According to ‘Yannick van den Bos’; the hedgehog concept is based on three circles, all the same size and all of equal importance. Those three circles intersect in the middle, and this is the place where you should aim. The first circle in hedgehog concept involves- what you can be the best at. This is not meant to be a goal, or strategy, an intention or a plan. It is a clear statement of fact, developed by honestly looking at which area you can shine.

Keep in mind that what you could be the best at– may also be something you’re not doing right now. The second circle asks- what is driving your economic engine. Discover the single denominator which gives you profits while allowing you to pursue your passion. The third circle you discover- what you are deeply passionate about. However, the most important part of these circles (i.e., Venn diagram) is the middle intersection.

If you could live your life in that middle place, you will have it made. There you will be doing something that works with your core competency; something you can be the very best in the world at, and something you are deeply passionate about…

It’s not good enough just having– two-out-of-three; you want it all! For example: If you are passionate about what you’re doing, and good at it, but there’s no money to be made, you are going to be very frustrated. If you’re good at what you do and you’re making lots of money, but you hate your job, it’s not worth it. If there’s money to be made in an industry that you are passionate about, but you aren’t any good at it, that can be frustrating too. So, you must stay in the intersection of the three circles…

In the article Hedgehog Concept in Your Life by Steve Watters writes:  Foxes pursue many ends at the same time and see the world in all its complexity. They are scattered-diffused, moving on many levels, never integrating their thinking into one overall concept or unifying vision. Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything.

It doesn’t matter how complex, a hedgehog reduces all challenges and dilemmas to simple– indeed almost simplistic– hedgehog ideas. For a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance. Recognizing that commitment to a simple hedgehog idea was a primary springboard for companies to go from good to great, Collins and his team developed three circles that people can use to identify their own hedgehog concept.

Collins offers this personal analogy: Suppose you were able to construct a work life that meets the following three tests. First, you are doing work for which you have a genetic or God-given talent, and perhaps you could become one of the best in the world in applying that talent (I feel that I was just born to be doing this.)

Second, you are well paid for what you do (I get paid to do this? Am I dreaming?).

Third, you are doing work you are passionate about and absolutely love to do, enjoying the actual process for its own sake. (I look forward to getting up and throwing myself into my daily work, and I really believe in what I’m doing). This is the world of the hedgehog concept…

In the article Steps to Take Yourself from Good to Great by Sonia Simone writes: In a good economy, you can do reasonably well with ‘good enough’. Good enough design, good enough marketing, good enough skills… When demand is high and dollars are sloshing around, there’s a market for: Decent. Capable. Adequate. Acceptable. But, we’re not in a good economy. We’re in a wretched economy. Industries all over the world are failing and ‘good enough’ professionals in all fields are scrambling.

According to experts, who smugly say; there’s always room at the top…. But, how are you supposed to get to the top? Believe it or not, there’s a map to the top… it’s applying the hedgehog concept. For sure, it’s not easy but it’s simple. You can and must do it, because ‘good enough’ isn’t ‘good enough’ anymore…

Hedgehogs simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything. This approach keeps the organization focused on what it can best do to achieve greatness, a sustainable competitive advantage. The motto: See what is essential, and ignore the rest.

The hedgehog concept is– not a goal to be the best, a strategy to be the best, an intention to be the best, or a plan to be the best. It is an understanding of what you can be the best at. Focusing solely on what you can potentially do better than any other organization is the only path to greatness.

According to Larry Stevenson writes: One particularly useful mechanism for moving the process along is a device that’s called the ‘council’. The ‘council’ consists of a group of the right people who participate in dialogue and debate guided by the three circles, iteratively and over time, about vital issues and decisions facing the organization. Build the ‘council’, and use that as a model: Ask the right questions, engage in vigorous debate, make decisions, autopsy the results, and learn– all guided within the context of the three circles.

However, it’s not easy or quick, and adhering to the hedgehog concept induces frustration because it requires an intense focus. This exact kind of focus is what built great companies, such as; Southwest Airlines. In the book ‘Made to Stick’ by ‘Chip and Dan Heath’ recount the story of how ‘Herb Kelleher’ of Southwest shot down the idea of adding a chicken salad as an entrée on the flight menu, quote: if it doesn’t help us become the unchallenged low-fare airline, we’re not serving any damn chicken salad. In other words, Southwest needed to focus on the simple concept of being ‘the’ low cost airline, and nothing else.

It’s easy to let things that you could do as an organization distract you from things you should be doing to meet your goals. By adhering to a hedgehog concept, these distractions are minimized. By adhering to their hedgehog concept, Southwest could lose customers looking for more or better food options.

But, that’s the beauty and power of having focus. It is perfectly acceptable to piss-off some people, if they are not part of your target audience. By being the low-cost airline, the only customers that Southwest really need to please are those seeking the lowest possible fare.

When you focus on your hedgehog concept, you will find ways to please the customers you want, and those that truly drive growth, rather than waste time courting the ones you don’t need…

Selling and Psychology of Losing: Losing is the Secret Ingredient for Winning – or – Losing is Just Losing…

Selling: Winning isn’t everything, it’s the only thing! But, if you can’t accept losing, you can’t win. ~Vince Lombardi

What creates a more intense emotion: When you ‘win’? When you ‘lose’?  Most sales people will tell you that ‘losing’ is a deeper, more emotional feeling than when they ‘win’. Most sales people want to win so badly that losing just makes them depressed, dejected, and flat-out angry.

According to Richard Schroder: there is much to learn from losing, yet most sales people do not know how to gather meaningful information from customers to learn about their losses. In fact according to research, customers will share– less than 40% of the time– the truth about the reason for their decision. This means that in majority of failed sales situations, sales people do not have an accurate understanding of why they lost.

According to Richard Thaler; when faced with a sales loss the best response is to– acknowledge the setback and learn from it…

According to Mark Hunter; although you shouldn’t dwell on the past, but you should spend some time doing an autopsy on the lost sale and learn from it. If you don’t learn from each sale that you fail to close, then you are committing yourself to a pattern of losing more sales…

You must uncover the truth and what went wrong, and apply it to future sales. Although this is not the time to be defensive or attempt to convince the customer they’ve made a dumb decision… it’s time to made peace with the loss and move forward There’s a saying: When you lose a sale, don’t lose the lesson, too.

In the article What a Losing Salesman Looks Like by Shameless Shamus Brown writes: A salesman losing a deal is kinda like an animal caught by a steel jawed trap crushing its leg. It screams in pain. A salesman losing a deal is a depressing sight, just like a desperate animal caught in a trap; he is doing everything he can to get the order… But, there is no more serious issue in sales than trust: Trust matters! And, telling customers to just trust you more than the competition really shows that you have not conveyed a positive and value-oriented proposition… It shows that you haven’t connected with the buyer.

Most sales people know when they are about to lose, you start to feel it. You can feel the lack of connection with the buyer, and feel that the buyer has pulled away from you. Then, that desperate animal in you just wants to attack; tell the customer every reason why the competition sucks; offering discounts to lower the price; you try everything in a desperate bid to win back the customer… It’s Desperation: That’s what losing looks like… However, losing a sale is not the end of the world– there is a lot more selling to be done… a lot more customers to be sold, a lot more big deals to win… learn from the loss and move-on…

In the article Losing vs. Not Winning the Sale by Anthony Cole writes: If a sales person doesn’t win a sale, then they must have lost it, right? Wrong! There is a not-so-subtle-difference between ‘not winning’ and ‘losing’. When a sales person does ‘not win’, it indicates there was something that they didn’t do to win: The sales person is responsible for not winning. On the other hand, when losing the sale then there was something that happened that was beyond sales person’s  control.

Think about the many ways sales people describe losing a sale… But, all the reasons given usually come down to the simple fact that they just didn’t do enough to uncover or address the specific problems or issues that were important to the customer. To win more sales, sales people must evaluate their each and every sales step, in their loss, and understand what happened along the way: They must do a post-loss debriefing.

Winning, not losing, is the focus for reviewing the details of sales efforts. Winning is hearing ‘yes’ throughout the selling process… Think about what it really means to win more, and what you must do differently to win more. Sure, you’ll lose some, but when you do lose– take it personally; get mad, figure out what you should have done better, then go out and work hard to win again. Sales people must have a passion for winning every sale, and they must do everything possible to avoid ‘not winning’ every sale.

In the article Leveraging the Psychology of the Salesperson by  G. Clotaire Rapaille and Diane Coutu writes: We admire salespeople’s resilience in the face of endless rejection, and their certainty that things will work out in the end. Everyone is familiar with the play ‘Death of a Salesman’, which portrays a well-meaning man broken by the hollowness of his work. Dramas like; ‘Glengarry Glen Ross’ present a bleak picture, in which success seems to require moral capitulation.

Salespeople must be pros at losing, since they are rejected most of the time. There must be more too it then just the sale; there most be a strong motivation for the challenge and the chase. However, whatever your culture, you cannot be a salesperson without losing most of the time, so successful sales people must learn to accept loss, or they will get destroyed by the losses.

In the article Why Did We Lose the Big Deal? by Steve W. Martin writes: When you are winning sales; life is great! But, when we’re on the losing side of a deal, it’s easy to feel like the entire world is fallen apart. Losing is a subject that most sales people don’t like to talk about. But, it’s important to understand why we lost the big deal, because unless we truly understand why we lose, we will most assuredly lose again.

While losing to competitors is painful, losing to the dreaded ‘no decision’ is even worse. We spent all the time, effort, and resources on an account that couldn’t even make a decision. Balance of power is definitely in the hands of today’s buyer and the situation will only continue to get worse.

Today’s customers are smarter and more skeptical than ever. In addition, product differentiation is at an all time low. Your competitors have not sat idly by either: They are educated about most products and sales tactics, and focused on winning more than ever. Fortunately, they usually believe in the use of brute force and think the best way to defeat the enemy is by frontal attack, when in reality, winning over the hearts and minds of customers carries the day…

Whether losing to ‘competitors’ or ‘no decision’, true loss analysis starts by asking fundamental questions that are inherent to every sale, such as:

  • Did we sell to the bully with the juice?
  • Did we sell logically or psychologically?
  • Did we know the decision maker’s fantasy?
  • Did we have a coach or internal advocate in the account?
  • Did we build personal relationships with the C-Level Decision-maker?

In the article How to Avoid the Pain of Losing the Sale by K Cameron Lau writes: The fact of the matter is that selling does not always result in a happy ending. Sometimes it’s possible to put in every ounce of effort to the nth-degree, only to find yourself on a sinking ship, lost at sea, alone, just wondering where it all went wrong.

Selling is not easy. It takes careful planning, hard work, dedication, consistency, and open communication. It takes a willingness to throw yourself out there while tossing all fears of rejection straight out the window. By putting in the effort and playing smart you will likely find yourself in sales bliss, closing deals like there is no tomorrow. That being said, lost sales are unavoidable. There will be times where, for reasons completely out of your control, things just go wrong.

The fact of the matter is that if you were seriously invested or committed to that sales process or that customer, sometimes losing that sale just plain– hurts; it may scar, it may wound, it may leave a mark… But, you are a professional and your business is selling. So if and when the inevitable strikes and you lose that sale; simple remember who you are; then dust yourself off and get yourself right back in the saddle again

You win some, you lose some… According to Jim Busch; sales people hate to lose, but even the best lose far more often than win. In fact, the top producers hear ‘no’ a lot more than the average sales person, simply because they pitch more people and close more often than their less ambitious peers. Why is this so?

There is just a shortage of good salespeople with the self-esteem and psychic toughness to put up with constant rejection. Since losing is such a big part of selling, how a sales person handle loss is an important factor in their success… Losing is tough, but if you work in sales, you have to get used to it. By definition selling is persuading others to buy your product. You need the cooperation of the customer to be successful. There is no 100% foolproof ways to get others to accept your ideas…

Many fail at selling because they cannot handle the rejection, and they don’t understand that embracing loss is necessary for success. Even Vince Lombardi who said: Winning isn’t everything, it is the only thing! Had to admit: If you can’t accept losing, you can’t win. Good sales people never learn to like losing, but they learn to accept it as part of the job.

Winston Churchill defined success as: Going from failure to failure without losing enthusiasm. Mental toughness enables a sales person to go from rejection to rejection without losing their edge. We all come up with our own ways to deal with rejection.

Ralph Waldo Emerson quote: Win as if you were used to it, lose as if you enjoyed it for change. Every loss is a learning experience.

Selling is not a wind sprint, it’s a marathon. Even the best sales people face rejection every day. What sets top performers apart is that they get better on every call. They learn something on every call; they see every call as opportunity to polish their skills. This is why professional sales people ‘win’ on every call– no matter what the outcome…

The Bullwhip Effect: Big Swing, Oscillations, Changes in Market Demand– Wreaks Havoc in Supply Chain Management…

The term, bullwhip effect, owes its origin to the fact that a slight motion of the handle of a bullwhip can make the tip of the whip thrash wildly at speeds up to 900 miles per hour, about 20% faster than the speed of sound, creating a sonic boom (the crack of the whip).

In the context of a supply chain, the bullwhip effect manifests through increasing demand variability as you move upstream in the supply chain. Small changes to the customer demand on the retailer are magnified as the demand information is passed up the supply chain, creating increasingly higher variation in the orders received by upstream suppliers.

The bullwhip effect produces tremendous inefficiencies in the supply chain. It results in excessive inventory investment, poor customer service, lost revenues, misguided capacity plans, and ineffective transportation and production schedules… Many enterprises have gained a significant competitive advantage by understanding the underlying causes of the bullwhip effect and working with their supply chain partners to reduce it. The joint effort between supply chain partners results in reduced inventories and a supply chain that is more responsive to customer demand…

The concept first appeared in Jay Forrester’s book ‘Industrial Dynamics’ (1961), and it’s also known as the Forrester effect. The term was first coined around 1990 when Procter & Gamble perceived erratic and amplified order patterns in its supply chain for baby diapers. Procter & Gamble, now, employs vendor-managed inventory (VMI) in its diaper supply chain, starting with its supplier, 3M, and its customer, Wal-Mart.

The goal of any supply chain is to get the right selection of goods and services to customers in the most efficient way possible. To meet this goal, each link along the supply chain must not only function as efficiently as possible; but it must also coordinate and integrate with links both upstream and downstream in the chain.

The keystone for a lean supply chain is accuracy in demand planning. However, unforeseen spikes in demand or overestimation of demand stimulate the supply end of the chain to respond with changes in production, which impacts consumer-end of supply chain– it’s a ripple up-and-down the chain...

Some causes of the bullwhip effect include; consumer demand swings, natural disasters disrupting low of goods and services, over-or-under inventory issues, inaccurate forecasting… A few steps that help to mitigate the bullwhip effect include; know and understand drivers of customer demand, effective supply chain communication, efficient inventory management, more accurate forecasting …

In the blog What is the Bullwhip Effect? by adaptalift writes: The bullwhip effect can be explained as an occurrence detected by the supply chain when orders sent to supplier create larger variance, as they relate to the end customer sales. These irregular orders in the lower part (customer-end) of supply chain develop to be more distinctive (magnified)  higher-up (production-end) in the supply chain.

This variance can interrupt smoothness of the supply chain process as each link in the supply chain will over or underestimate the product demand resulting in exaggerated fluctuations. For example; let’s say that an actual demand from a customer is 8 units, but the retailer may actually order 10 units from the distributor, where the extra 2 units are used to ensure they don’t run out of floor stock. The supplier, then increases the order to 20 units to the manufacturer, which allows them to buy in bulk for a better price, as well as, having enough stock to guarantee timely shipment of goods to the retailer.

Next, the manufacturer increases the orders to 40 units to their supplier, which allows them to buy in bulk for a better price and ensures economy of scale in production to meet demand. Now, 40 units have been produced for a demand of only 8 units, which means the retailer is now under pressure to increase market demand, for example; more marketing, advertising, price reduction… or, supply chain must deal with additional inventory… The bullwhip effect can be a difficult problem for supply chain management, but by knowing  causes and through collaboration with partners in the supply chain, managers can develop and implement strategies that can alleviate the issues.

In the article The Bullwhip Effect in Supply Chain by Osmond Vitez writes: The supply chain is a complex group of companies that move goods from raw materials suppliers to finished goods retailers. But, unfortunately, supply chains may stumble when market conditions change and consumer demand shifts. The bullwhip effect on the supply chain occurs when changes in consumer demand causes the companies in the supply chain to order more goods to meet demand. Usually the effect flows-up the supply chain starting with; retailer, wholesaler, distributor, manufacturer… and finally raw material supplier.

The bullwhip effect is normally driven by management behavior at front-end (retailers) of the supply chain, for example; retail management never wants to have a stock-out on popular goods, which leads them to higher orders from the wholesalers. This eventually squeezes each company in the supply chain… Another major behavioral effect is ordering too much inventory when consumer demand has fallen for a specific item. For example, retailers may have raised their inventory levels to avoid a stock-out, but are now met with goods that cannot be sold, quickly. This creates overstock of inventory for each supply chain company.

However, main operational cause of the bullwhip effect comes from–individual demand forecasts from each company in supply chain,  which may not accurately reflect real consumers demand… Also, a prevalent operational cause is lack of communication between companies about the real market conditions, and that can cause improper levels of inventory. Technology is an important tool for managing data and detecting swings and fluctuations in consumer demands. It allows supply chain company to access information directly from any link in the supply chain; accurately, quickly, and make adjustments to mitigate the bullwhip effect…

In the article Globalization, China, and the Bullwhip Effect by Chris G. Christopher, Jr. writes: The relationship of the U.S. and China offers a clear example of how bullwhip effect applies on an international scale. When we talk about the bullwhip effect— the magnification of order fluctuations at each upstream point in a supply chain– we usually are referring to a particular company’s experience. But these occurrences can also play out in a much larger theater.

The relationship of the U.S. and China offers a clear example of how it applies on an international scale. Anecdotal evidence indicated that certain regions of China were producing 70 to 80% of the global production of footwear, clothing, and other final consumer items… When U.S. consumers curbed their spending during global financial crisis, the impact on Chinese exports was highly significant. Thousands of mid-sized factories in China went out of business almost overnight, and millions of migrant workers headed back to their home villages.

These and other data indicate that supply chain dynamics have become extremely volatile after a prolonged period of moderate volatility. They also make it clear that China remains tied to the U.S. economy; and as long as it does so, it will feel U.S. bullwhip effect. During first half of 2009, U.S. retail, wholesale, manufacturing, imports, and Chinese exports began to rebound.  The strength of the Chinese economy also promoted the growth of U.S. exports…

According to Kevin Dooley: The bullwhip effect posits that retailers are most effective at reacting to changing demand signals because they are closest to the customers who trigger that change in the market. As such, retailers confronted with changing demand patterns tend to be proficient at making corrections, neither under-reacting nor over-reacting, to signals in terms of altering inventory levels…

However, as you continue upstream (from retail to production) in the chain– volatility increases. That means wholesalers are likely to overreact to market signals, by aggressively reducing demand, while manufacturers — the furthest removed from market signals — are prone not only to overreact, but also to react in a delayed fashion. They wait too long to take action when demand changes, thereby they can get stuck with obsolete inventories. Or, they can lose sales because they don’t have enough inventories to meet demand…

According to Srimathy Mohan; during this recession the bullwhip effect should not have happened, because everyone up-and-down the supply chain knew that a decrease in consumer demand was occurring. So the fact that it did happen, tells us that wholesalers and manufacturers were not communicating and didn’t believe (or ignored) the macro-level market signals. Instead, they continued to just pay attention to what their downstream partners were doing…

When a person cracks a bullwhip, small movements at the wrist produce huge waves at the other end of the whip, which describes how information about market demand becomes increasingly exaggerated and distorted as it moves up the supply chain: From customer to manufacturer to supplier– driving-up costs and hurting efficiency. According to Hau Lee; the bullwhip effect is common in many industries but varies widely… For example, when you snap a bullwhip, you create small waves near the handle, which become large waves near the tip of the whip.

Suddenly ‘a small hiccup is translated into big swing’, in market demand. To mitigate the effect, companies must verify incoming demand information and collaborate with all their supply chain partners to ensure complete alignment with the real market demand. According to Steve Geary, Stephen M Disney, Denis R Towill; bullwhip has a long tradition for causing disruptions, i.e., massive over-swings and under-swings in demand; where over-swings results in unnecessary ramping up of production (usually with great inefficiencies), and under-swings results in much pain via paid idle time and redundancies. 

One way to improve the supply chain process is to systematically remove all avoidable causes of uncertainty. The underlying supply chain objectives must include; smooth material flow, smooth and transparent information flow, time-compression of all processes, holistic controls, and the abolition of barriers that cause functional silos to exist. The effective consequence is movement away from traditional, adversarial process, towards a minimal bullwhip seamless supply chain scenario.

The future of bullwhip lies not in revolutionary new supply chain methodology, but instead in promulgation of best practice. Having the knowledge of the bullwhip issues that match the particular needs of the individual supply chain value streams is critical for an effective solution.

However, the big challenge for mitigating the bullwhip effect is the elimination of the functional silo mentality and its replacement by a new era of collaborative management that satisfies the true demands of the marketplace…

Management by Fuzzy: Decision-Making in Environments of Ambiguity, Uncertainty– Tough Decisions with Fuzzy Logic…

In the world of fuzzy logic, two statements can be both true– even though they contradict each other.

Humans have a remarkable capability to reason and make decisions in an environment of uncertainty, imprecision, incompleteness… of information. Fuzzy logic is a form of multi-valued logic or probabilistic logic; it deals with reasoning that is approximate, rather than fixed and exact.

Fuzzy logic was developed by Lotfi A. Zadeh, in 1965, and it’s been applied to many fields, e.g.; control theory, artificial intelligence, decision-making… and, also to business management decision-making, which involves tough decisions with limited information that’s usually– vague, uncertain…

There are many misconceptions about fuzzy logic: To begin; fuzzy logic is not fuzzy. In large measure, fuzzy logic is precise, and it’s much closer to the way the human brain actually works. To better understand fuzzy logic ideas let’s relate its principles to human reasoning, for example; the statement– ‘today is sunny’– in reality might be 100% true, if there are no clouds; 80% true, if there are a few clouds; 50% true, if it’s hazy; 0% true, if it’s raining…

in the example, the fuzzy logic would actually represent these multiple conditions, whereas in traditional solutions, it’s either; true or false (i.e., its sunny or it’s not). It’s also used in some spell checkers for suggesting a list of probable words to replace a misspelled one, whereas in traditional solutions, it’s either; right or wrong (i.e., its spelled right or it’s not). Often knowledge used in discussing and making strategic decisions is expressed in terms of; rules of thumb, management principles, business rules …

Many experts suggest these types of rules are actually fuzzy rules that can be combined, using fuzzy logic, into a knowledge system that recognizes more than just simple; ‘true and false’ values. In the examples; fuzzy logic represented the multiple ‘degrees of a condition’, which in reality represents most management decision-making, and exactly situations when a fuzzy logic based decision process can be most effective…

In the article To Get Better Decisions, Get a Little Fuzzy by Bob Frisch writes: It’s easy to equate– crisp, clear, black-and-white decisions with good decisions. I’ve seen this classic model of decision-making dominate companies in practically all industries and corporate cultures. But, as often as not, this drive toward clarity and closure — and the need for precision that accompanies it — leads senior management teams to waste time and make meaningless decisions.

Often, it’s better to be fuzzy, to deliberately introduce imprecision into your team’s decision-making process. For example, an executive team charged with creating a high-level timeline for launching various strategic initiatives or determining whether a specific resource should be deployed would spend innumerable hours debating which ‘ones’ will be launched, immediately, and which ‘ones’ later this quarter, or which ‘ones’ two quarters from now versus next year, or even which in 60 versus 90 versus 120 days. The fact is; it doesn’t really much matter. Once reality of implementation intrudes on even the best-laid plans; decisions made by the senior management team often become more like suggestions anyway.

A few years ago, one of the senior management groups I work with tried something different: Fuzzy logic.  It’s a branch of mathematics concerned with deliberately introducing imprecision into decision science. For example; washing machines, were being programmed to heat water to ‘warm’ without a specific temperature being assigned to that concept — ‘warm’ was simply the state of being hotter than cold and colder than hot. So, we decided to try a similar approach using fuzzy logic in management decisions.

Rather than just putting initiatives into many specific time buckets, I asked the senior management team to make one decision, namely: Was their initiative something that would start ‘now’ (i.e., immediately — tomorrow morning 9 a.m.) or was it something that would start ‘later’ (simply defined as ‘not now’)? This made executives uncomfortable, so we introduced a third bucket, namely– ‘soon’ — defined as; ‘later than now but sooner than later’.

Suddenly, the task of assigning initiatives to timeframes became dramatically simpler. The challenge of determining whether something was 30, 60, 90, or 120 days out was transformed into a much more manageable and meaningful discussion: Was their initiative something we are going to do ‘now or not’? If it’s not going to happen ‘now’, should it happen ‘soon’? That’s the discussion the CEO wanted to have, and the energy of the conversation was refocused into a much more productive channel.

We soon extended this notion of fuzzy decisions not just to time, but to importance. Rather than rank each initiative in an ordered single list, as we had been doing for years, we began assigning the initiatives to priority buckets, e.g., ‘must do’, ‘should do’, and ‘nice to do’.

The approach changed the task from judging the relative merits of each initiative against each other one to clustering projects with similar importance together. Since it eliminates both; problems of drawing artificially fine distinctions, on the one hand, and trying to compare apples to oranges, on the other.

By using this simplified approach it enabled the team to have a truly meaningful conversation about the relative strategic urgency, rather than the relative merits, of the various initiatives. Of course when we began, few sponsors were willing to categorize their initiatives, as either; ‘later’ or ‘nice to do’. So, most projects were initially put in the ‘must do’ and ‘now’ buckets.

But over the course of the conversation, a ‘high must-do’ cluster emerged that was clearly more important than the ‘low must-do’s’. As the ‘low must-do’ category devolved, predictably, into ‘high should-do’, the borders of the buckets were soon aligned into the appropriate clusters of initiatives.

Assigning relative importance (e.g., ‘must do’, ‘should do’, ‘nice to do’) and relative time (e.g., ‘now’, ‘soon’, ‘later’) to a set of initiatives, and then stepping back to examine the clusters of activities– isn’t precise, isn’t black-and-white, and isn’t crisp, however, because it more closely matches the way companies are actually run, it’s a far more effective tool for aligning the various priorities of the management team.

In the article Dealing with the Early Phase of the Innovation Process Characterized by High Degree of Ambiguity by Vadim Kotelnikov writes: The early stage of an innovation process is ripe with opportunity, but it is also devoid of many definitive facts. Due to its high degree of ambiguity, the development phase has become known as ‘the fuzzy front end’.

While the situations that fuzzy logic addresses are ambiguous; fuzzy logic itself is a very well-defined methodology. Business leaders use the managerial equivalent of fuzzy logic to address the ambiguity of ‘the fuzzy front end’. The core elements of the approach include:

  • No plan survives: Whatever plan you create will not be one you will ultimately implement.
  • Having a plan is better than not: Having a collective understanding of the business      and intentions enables the team to select and communicate alternate directions knowledgeably and quickly.
  • Make decisions at an early phase: You’ll never have all the data. Waiting for more      data can go indefinitely, and much of what is called data, such as market research, is more opinion than fact.
  • Be flexible: Ongoing thinking and action brings strategy to life. Scan constantly for new developments and be ready to retarget briskly when needed. Locking into any plan when the competitive context continues to change is a foolish approach.
  • Think of product families: One-off thinking yields one-off products.
  • Find a partner: Don’t do it alone. Focus internally on making a world-class contribution and then leverage others who can bring their complementary skills, resources and capabilities to the party.
  • Balance customer feedback with technology potential: Listen to your current customers, but don’t always believe them. Although customers can be overly conservative, technology by itself rarely wins.
  • Focus on opportunity, not financial returns: Money isn’t everything. Measuring return, risk, and investment solely in terms of dollars is a mistake.

Fuzzy logic is designed to deal with imperfect information, which in one or more respects is imprecise, uncertain, incomplete, unreliable, vague or partially true. In the real world, such information is the norm rather than exception.

Fuzzy logic is usually defined as an approach for decision-making based on ‘degrees of truth’ rather than the usual ‘true or false’. With today’s information overload, it has become increasingly difficult to analyze the huge amounts of data and to make appropriate management decisions.

It’s important to extend traditional decision-making processes by adding intuitive reasoning, human subjectivity and imprecision. Most publications in management and marketing do not address the problems which arise when using just traditional, non-fuzzy, or crisp methods.

According to Tomasz Korol; globalization has led to the emergence of a complex network of relationships in the business environment, which means increased complexity and uncertainty of factors affecting all businesses. For example; many phenomena in finance and economics are fuzzy, but are treated as if they were crisp… the vague and ambiguous concepts of fuzzy logic can define terms, such as; ‘high risk’ or ‘low risk’ and make them very much relevant…

According to João Paulo Carvalho and José A. B. Tomé; management of uncertainty is an intrinsically important issue in the design of decision systems, because much of the information in the knowledge base is imprecise, incomplete… In the existing systems, uncertainty is dealt through a combination of; predicate logic and probability-based methods.

A serious shortcoming of these methods is that they are not capable of coming to grips with the pervasive fuzziness of information and, as a result, are mostly ad hoc in nature. A feature of fuzzy logic, which is of particular importance to ‘management of uncertainty’ is that it provides a systematic framework for dealing with fuzzy quantifiers, for example, terms as; most, many, few, not very many, almost all, infrequently, about…

Fuzzy logic makes it possible to deal with different types of uncertainty within a single conceptual framework… Fuzzy logic is all about the relative importance of precision: How important is it to be exactly right when a rough answer will do?

As complexity rises, precise statements lose meaning and meaningful statements lose precision. ~Lotfi Zadeh