Tag Archives: culture

How to use "process" to destroy goodwill and lose revenue (1)

Posted on by
3

Recent experiences with some well-known businesses have made me wonder if managers know how their organisations suffer from their employees’ interpretation of their “process”. And if they care. Here is a series of 3 short stories.

After attending a trade fair in Bangalore recently, I returned to London on a British Airways flight, leaving at 650am on a Monday morning. The flight was quite empty. A senior colleague was returning as well, but in a different class. So I thought, let’s ask for a possible upgrade for him. This is how the conversation went.

Me: Hi. My colleague and I were both here on a British trade delegation. So we fly BA naturally. Is there a way for you to upgrade him so we can travel back together?

BA CSA: Madam, the flight is quite empty. So we have no need to offer any upgrades.

At 5am, it took me a couple of seconds to figure the logic of this explanation. The airline would bump up some travellers if the lower cabins are over-booked and customers need to be accommodated. Of course, one could also be amongst those who get bumped off the flight altogether from an over-booked flight because it may serve the airline’s need. But we shall leave that aside for the moment. So in an empty flight, there is no need to upgrade anyone.

Business logic also tells us that once the plane is committed to a route, the operating cost is more or less fixed. So this was clearly a chance to be nice to a regular customer. Besides, we had not ruled out paying, but the CSA presumed we would not pay. So I persisted.

A recession is the time to work harder to keep the few customers you still have.

Me: I understand that logic but to someone who does not know how your industry works, it can sound odd. Of course as a trade delegation, we fly BA as much for the symbolism as for anything else.

BA CSA: Madam, we have no need to offer upgrades because the flight is quite empty. But if you can get me a signed authority from someone, I can do an upgrade. That is the process.

By now we had heard twice about the “airline’s need” to offer or not offer upgrades. We were then offered “hierarchy” as possible mitigation by way of “process”. At 5am. I gave up. This was a negotiation I was not going to succeed at.

I must however admit I admire the tenacity of the BA CSA. Her business logic and stick-to-it-iveness were impeccable. But on the other hand, the CSA also missed an easy chance to make a neat profit by selling an upgrade to a customer, who had woken at 330am to make the flight and would have relished a chance to stretch out and sleep.

And what about goodwill?

Especially at a time when BA is making losses? Of course BA is cutting costs. But is it naive to expect that they would focus as much on try to retain the paying custom they still have? Never mind the chance to make revenue that was lost. Ironically, I had travelled on a promotional ticket while the colleague had paid for his.

Related reading:

It’s when you deliver that counts

Is your business missing a trick?

The client-consultant relationship

Posted on by
5

Over the years of being an independent consultant, I have enjoyed good relationships, characterised by camaraderie and mutual respect, with most of my clients. But there have been a few less than ideal relationships too.

As we all know, success is a bad teacher. So here is what I have learnt from my sub-par experiences and outright failures. When any or more of the following were found lacking, the interaction was not as productive as it could have been.

Sharing the blue-print

A consultant is an outsider to the client’s business. The main upside of this is that the consultant is not hamstrung by the knowledge of the client company’s past failures. The downside is that without the client sharing information, the consultant may not have clarity on the organisational goals.

A bricklayer, who understands the blue-print of the cathedral he is helping build, is more likely to identify with the higher purpose than one who is simply told to lay the walls. Likewise, sharing the strategic aims motivates and focuses the minds of both the consultant and the client. The consultant can then contribute meaningfully to the cathedral rather than to the particular wall! The client also finds it easy to measure the consultant’s contribution to the company’s strategic aims. This works. Especially with a mutual NDA in place.

Balancing gut-feel and intellectual honesty

It would be naive to suggest that consultants are never hired purely to validate an executive’s gut feel. It is more common than is accepted or discussed openly.

But sometimes, in the course of investigations, things emerge that invalidate that gut feel. Times like these call for intellectual honesty on the part of both the client and the consultant. Because although differences may emerge, it is also a chance to make better informed decisions. How the differences are handled can determine whether the relationship is working or not.

Striving for manageable, open communication

When I was young, I was an impatient child. The kind that would pull out the roots of a plant every 15 minutes to see if they were taking hold. Such impatience is a problem when working on a large strategic project, pulling data and information from a variety of sources including interviews with people in different time-zones. It is better instead to focus on the milestones and boundary conditions.

My clients and I agree on reasonable milestones up front, with the caveat that both parties will  flag any egregious developments right away. This helps both parties save time and energy otherwise wasted on micromanaging the other side’s expectations or deliverables.

Understanding the process of creation

A popular management cliché goes: “we cannot manage what we cannot measure”. Analogously, “we cannot outsource/ purchase what we do not understand”. If the client understands the process of creation, it helps in assessing the consultant’s contribution to the organisation’s goals. Equally it is the consultant’s job to make things less obscure for the client to understand.

An interesting point in projects is scope discussion. The consultant does not want scope-creep and the client does not want to leave anything meaningful out. Both parties may use different assumptions about the relationship between scope and pricing. These assumptions need to be articulated and discussed openly. This sets the right expectations, helps set milestones and helps the assessment of the output.

Passing the “chemistry” check

This is actually the very first step. The right chemistry between the client and the consultant is nearly as important as the right value/ price package. Without it, projects may happen but a relationship certainly won’t develop.

In my case, I usually meet the CEO/ board director/ a senior decision-maker or a few of them. The first meeting is usually an informal chat or a lunch, and there may (or may not be) signs of a good chemistry, commonality of values or similarities in our respective weltanschauung. Projects that help the client almost always lead to professional growth for me too. But only if the chemistry was right in the first place.

So in my experience, successful clients help consultants help them and consultants can also help clients better by avoiding obfuscation and random posturing.

These factors apply to a consulting or advisory situation of any kind, from strategy advice to software development. I return to this checklist often but I am certain there are other lessons in the readership too. Please use the comments link to contribute.

Unanswered questions: The manager in the firing line

Posted on by
3

Pink slip or P-45. Redundancy. Job loss. Head-count reduction. Downsizing. Right-sizing. Many words, the same meaning. 

While much attention is paid to the laid-off, not much sympathy or attention is reserved for the manager, the person, who hands out these pink slips or P-45 to his or her team-members, subordinates, employees. This person’s experience is different from survivor guilt. Yet it remains deeply upsetting and painful, and it is hard not to feel emotionally drained. Sooner than later, work is bound to suffer.

I was 24, when I first made several people redundant. The business logic was quite simple. There was a central business plan, in which no regional input had been taken. So regions hired according to the central projections.  However market realities required that plans be reconsidered and we had to let people go. Not all were undeserving, mind you. We were selling a new product category and brand, in a new retail format. So there was rather a lot of selling to do. Some weren’t really doing that well. Some were doing well and resented having to carry any deadweight with them. So the business case was clear and several had to go. However there was an interesting side-show. Whilst handing out the redundancies, I lost so much weight that at one point, I weighed a mere 32 kilos. I found it hard to eat and I worked longer and longer hours. Since my business unit was intrapreneurial and a new venture, I worked quite independently and with little direct supervision. 

Back to the present time in London. Several friends in senior corporate roles, mainly in the City, are firing people at work. During the week, they spend long hours at work. Then on weekends, they spend inordinate amounts of time playing golf or cycling – basically doing anything to stay away from more emotional engagement at home. For some, this is affecting their relationships, their family, where “head-count reduction”, “redundancy” , “right-sizing” etc are not available options.

Remembering what happened to me then and seeing the emotional trauma these friends are experiencing now makes me ask this question.

Who is looking after the welfare of the manager, who makes his/ her team-members redundant for a business case, but is retained to keep the business going, even to lead the business on its growth trajectory in the future? 

Satyam, corporate governance and emerging markets

Posted on by
9

Perhaps the most tragic thing about the Satyam saga is the name of the company.

Satyam means ‘the truth’ and the company’s fortunes have fallen on the sword of anything-but-the-truth. India’s first IT company to list on the NASDAQ and also trading on several Indian stock exchanges is being described as India’s Enron.

The Satyam saga is a complex case that raises many questions. On the one hand, these questions are about the role of board directors, the possible complicity of auditors, and the efficacy of regulator oversight. On the other hand, the case raises profound doubts about the basis of growth in emerging markets. On yet another level, one has to wonder if companies from countries with less advanced corporate governance frameworks should really engage in the masochistic exercise of going public and raising money in markets which hold them to tougher standards of growth and profitability, and then watch them like hawks to ensure those expectations are delivered upon.

There is inevitable collateral damage within India. Institutional investors are hardly likely to be happy about the lead-balloon like drop in the share price although some, like Sundaram BNP Paribas, offloaded their stake, ‘before the event’ as they naively point out. I say ‘naively’ because the timing appears highly suspicious to onlookers and the offloading will hardly spare them possible enquiries about alleged charges of insider dealing, for instance. The auditors, PwC, may also find themselves in some hot water.

But there is a silver lining in all this.

Corruption and infrastructure are often cited as India’s twin Achilles’ heels. But the Satyam case is not about systemic corruption and bribery which concern institutional investors aiming to invest in India. It is a more contained crisis, a failure of governance within a company.

That is where the silver lining ends.

Because one wonders if there are other such ‘contained crises’ brewing elsewhere. Because this failure of corporate governance raises a red flag for businesses seeking partnerships and joint ventures in India. There is a systemic angle to it, of course, in terms of regulatory oversight or the role of auditors as I mention earlier. But that can happen in the best regulated, stable, ‘developed’ economies as evidenced by the CDO crisis, the Madoff crisis and of course, Enron. The solutions will have to take into account all the various possible weak links.

Meanwhile, what do you do, if you are a business seeking to enter India or another emerging market, with a strategic partnership or alliance?

Of course, you persist with robust due diligence on companies, which are potential partners. Then there are the wrongly-described ‘soft’ aspects of a deal.

An outstanding strategy consultant will not just deliver the numbers, the hard due diligence, but also guide you on the major issue of executive reputation and articulate the tacit knowledge essential to your success in your target emerging market. Choosing the right person to be on your side in your global growth plans therefore is your first step in partnership, and in your quest for success in emerging markets.

Related readings:

Corruption is the greatest stumbling block to infrastructure development in India, says Nita Kulkarni

Technology news from India?

Posted on by
8

Nikhil Pahwa, formerly editor of ContentSutra (or more like the one-man-army who ran CS in India) and a good friend of mine, has launched MediaNama today. He writes about the digital media business in India including new businesses, M&A, VC activity and other business related news.

His launch story deserves more than just a mention here. It is an interview with S Sivakumar, the CEO designate of Times Private Treaties and is titled “There Are Two Currencies For Advertising – Cash And Treaties; We’re Not Buying To Sell”.

Read on to make up your own mind about the core issue. But here is why I am interested in Nikhil’s launch story.

It may be old hat to those living in India and following the launch of Times Private Treaties. But to those who seek reliable sources of news from outside India, it confirms their impressions.

A few days ago, at a seminar in London, the MD of a glossy, newly launched in India, spoke of how difficult it was to find good quality journalism in India. The reasons, he said, were two-fold: a lack of classically trained journalists and an unsated appetite for gossip over analysis, which leads to any research or confirmation only post facto, if that.

The former, in my view, is an inevitability of a booming economy. There never can be enough of good resources to go around; and recalling the dot-com boom, this is how I really put it: “in boom times, even morons have jobs.*” The latter is plainly evident in any print or digital medium one accesses as I experienced in my most recent visit.

That is not to say that all journalism in India is of poor quality. I did find some good articles, admittedly heavier on data than on analysis, which I duly cut and brought back. But integrity in the press is less than universal what with open plagiarism, stories without attributions or bylines, and blatant cut-and-paste of editorials a common practice. All this also bugs some journalists.

The Times Private Treaties business is just another step along the downward slope where journalism is indistinguishable from advertising.

Good for a booming consumer market? Yes. Good for keeping a nation engaged in the job of nation-building? Not sure.

Which is why journalists like Nikhil Pahwa should be applauded and supported. For being fearless, keeping their integrity (you have to see his disclosures) and doing an honest job of reportage.

* Please keep your PC batons at home. I am aware of what the word ‘moron’ means. I happen to think it is more insulting when applied to people with mental difficulties, and more apt as a sarcasm when applied to those who seem to believe they have all faculties intact, when their actions cast a shadow of doubt over that belief every moment.