This one is nobody’s pleasant subject. Nobody wants to cut expenses. Primarily because most of the time, it deals with the very tough calls of separating valuable employees from the company. Yet, thru this unpleasantness, I believe I have learnt a lot and become a stronger leader. My first big downturn was the Internet bubble crash and now of course we have the whole world crashing 🙁 [As a side note, the current problem is severe and very unpredictable – still it is not the end of the world or even close to the Depression]

Back to the learnings…

What are the first things that get squeezed? Travel, Entertainment, Training and such. While there should be a very tight watch on these, it is not the best thing to go after. For starters, you can usually not squeeze much unless you had a hopeless system of approvals for travel and training. For another, they rarely deliver big numbers.

Assuming you will never go thru only one round of job cuts, I would suggest using the framework of three steps to deal with it:

1. First focus on productivity. Usually, in a growth mode, you will be surprised how we tend to add costs. If you get smart people together in a room, you will be surprised how many good ideas can come up on how to do the same thing smarter and cheaper.

2. Second, focus on stopping doing something. After a few rounds of trying to squeeze productivity, we need to show courage in the face of adversity by prioritizing. And this means making active choices of stopping some work, project etc etc. Usually, this is tougher than the first step since we live in a world where everything is considered high priority.

3. Third, look at structural changes. Break up fixed cost structures (you may need restructuring charges), flatten your organization, relook at other arbitrages (cheaper countries or outsourcing) – just go for larger structural changes.

None of these are easy – but that is the fun of running business. Sometimes you have to figure out how to respond to external changes that you have no control over.

Any learnings you have had personally?

Cheers,
Rajib

I am sure you have come across a lot of literature on leadership. If you had any doubts how difficult true leadership is, just look at the number of books written on it 🙂 Most of the literature has a couple of good ideas and then a lot of pages so that they can actually make a book out of it.

However, there is a presentation I came across about 10 years back. A colleague of mine passed it on to me. It is a 20 -odd slides presentation from Colin Powell titled “A Leadership Primer”. I love it so much that I go thru it even today – at least once a quarter. Once in a while, when I find myself getting dragged into corporate politics, I go back and read the slides again. It is a great pick-me-upper.

I guess the reason I have liked the presentation so much is because

(*) it makes some very bold statements
(*) the examples and explanations are to the point and focused (that is why it is a slide, not a chapter in a book)
(*) it gives the best definition of Leadership I have found till date.

I would strongly recommend that you go thru it at your convenience when you get some time. Here is a website that has the slides: http://www.blaisdell.com/powell

Here is a quick run thru of the titles:

1. Being responsible sometimes means pissing people off
2. The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help them or concluded that you do not care. Either case is a failure of leadership.
3. Don’t be buffaloed by experts and elites. Experts often possess more data than judgment. Elites can become so inbred that they produce hemophiliacs who bleed to death as soon as they are nicked by the real world.
4. Don’t be afraid to challenge the pros, even in their own backyard.
5. Never neglect details. When everyone’s mind is dulled or distracted the leader must be doubly vigilant.
6. You don’t know what you can get away with until you try.
7. Keep looking below surface appearances. Don’t shrink from doing so just because you might not like what you find.
8. Organization doesn’t really accomplish anything. Plans don’t accomplish anything, either. Theories of management don’t much matter. Endeavors succeed or fail because of the people involved. Only by attracting the best people will you accomplish great deeds.
9. Organization charts and fancy titles count for next to nothing.
10. Never let your ego get so close to your position that when your position goes, your ego goes with it.
11. Fit no stereotypes. Don’t chase the latest management fads. The situation dictates which approach best accomplishes the team’s mission.
12. Perpetual optimism is a force multiplier.
13. Powell’s Rules for Picking People: Look for intelligence and judgment, and most critically, a capacity to anticipate, to see around corners. Also look for loyalty, integrity, a high energy drive, a balanced ego and the drive to get things done.
14.Great leaders are almost always great simplifiers, who can cut through argument, debate and doubt, to offer a solution everybody can understand.
15. Use the formula P=40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired. Once the information is in the 40 to 70 range, go with your gut.
16. The commander in the field is always right and the rear echelon is wrong, unless proved otherwise.
17. Have fun in your command. Don’t always run at a breakneck pace. Take leave when you’ve earned it. Spend time with your families. Corollary: surround yourself with people who take their work seriously, but not themselves, those who work hard and play hard.
18. Command is lonely.

and my most favorite…

“Leadership is the art of accomplishing more than the science of management says is possible”.

Rajib

No doubt, you are called to appraise people’s performance once or twice a year and in the process, have to pitch in your commentary about talent of some of your subordinates. I have heard of certain companies truly understanding and building talent. I cannot honestly admit that I have seen a lot of them. Some are more disciplined than others – definitely some are more serious about it than others.

The process is far more nuanced than the forms that you fill up on strengths, weaknesses, development and so on and so forth. The more sophisticated ones use the 9-box from “War for talent” or some variation of the same to differentiate the past from the future (potential). And some go many more steps further.

After watching such processes in quite a few companies over the last 20 years or so, here are some observations from my side. If you are a senior manager / executive, it would be interesting to keep these points in mind:

1. At the end of the day, there is a lot of subjectivity in the process. All HR processes, rationalizations, 360 degrees are great attempts to bring some objectivity to the process but at the end of the day when you try to summarize a complex set of human behavior into a few bullet points of positives and negatives, undoubtedly, broad brush and stereotyping will get in. Just admitting that will perhaps force you to think many more times.

2. A small set of data points play an overwhelming role in the final judgment. Good or bad, a few interactions, somehow lead us to form deeply rooted convictions. The underlying O.B. theory is that, as humans, we try to simplify our views of people or events – rather than care to have a lot of nuanced views. I have seen a lot of managers give one or two data points to make their case – and then struggle like hell when asked for a few more data points. Ensure that you have enough data points to back your view. You will surprised how you have formed opinions based on what you have heard or your first interaction etc etc.

3. An ideal talent process should take into account the “end state” to decide the strengths and the gaps. Too often managers write strengths and weaknesses by focusing on the variance between some target that they have in their mind and the appraisee in question. Needless to say, this is one way subjectivity gets injected. But rarely have I seen a manager understand what the employee wants to be eventually and then work backwards from there to accentuate the strengths and develop the gaps. [This is somewhat like a football coach wanting to make a quarterback of everybody!!]

4. Finally, we as humans, far over-rate our ability to judge talent. This gets even more dangerous as managers rise up due to their business strengths and by virtue of that position is now called upon to be the “judge” of talent in their organization. HR needs to play a very strong role in this. Even in “rationalization” sessions, care should be taken to ensure that the highest ranked manager’s view is freely and frankly challenged.

I would be interested in hearing from you some of the great talent development processes or ideas that you have seen (or not seen for that purpose).

Rajib

Advisory Boards are not a very common phenomenon that I have come across. However, a well formed Advisory Board can be extremely helpful to most top level executives.

First, I am not talking about Executive Boards – that is pretty much the domain of the CEOs. And I am not talking about Customer Advisory Boards either. If you are a C-level executive (but not CEO), I am talking about forming your own external advisory board formed from luminaries in your industries that you can trust and respect.

Having had twice formed such boards for myself in the past and having been in two such boards myself, here are my observations:

1. As I observed before, this is NOT a common practice. I think that is a pity.

2. Not all executives are equally adept in leveraging such a board.

3. It is a very cheap way of getting access to a lot of talent. You can pretty much get this done by a few flight tickets, hotel bills and lunch/dinner checks. If you are on a shoestring budget, chances are you can pick executives from your local city for this.

4. Such a board gives you the following:

4a. Great access to you and your operating team to a lot of experience and talent from outside. Chances are they have face some of your challenges that you are facing.

4b. It is a great sounding board. Outside of your board meetings, you or your team can feel comfortable getting some quick feedback.

4c. Great networking opportunity. You get access to more people – perhaps some of them can become your customer some day, some may join you in your company some day.

4d. Finally, my experience is that your team will find the whole exercise innovative and highly energized. They would love the exposure.

5. What to sell potential board members on – OR – what the board members get from this:

5a. Networking opportunity. They get a chance to meet perhaps future customers, future employer or future employees.

5b. Great Resume Value – especially if you company has a reasonable brnad name in the market, this would be great to get on their resumes.

The best way to utilize these boards are to pose certain business challenges you have at a reasonable abstract level and see what the various learnings have been.

So far, my experience has been very positive on this.

Have you any history of having tried this or being part of such a board. I would love to hear about your experience.

Rajib

How often has this happened to you? A manager in your group walks in to your office and tells you that a critical resource in her organization has given notice. He is joining this other company because of a substantial jump in compensation. If only you can match that comp, your manager feels confident of arguing him out of his decision. She needs your support to approve this.

I am sure not infrequently. What do you do?

Almost without exception, I have learnt to say No. Fifteen years back I would have thrown more money, fought hard and done whatever to change that person’s mind. I do not advise to do that any more. Hit rate was very low for me. Here is what I have learnt:

Changing a job is a big decision for most human beings. Most people don’t want to look for a job for sheer reasons of inertia, zone of comfort etc. Almost surely nobody starts looking for a job because one is seeking more money. One goes thru a lot of introspection, frustration or whatever reason to convince oneself that one is going to change jobs. Somewhere along the way, he confides and explains his plans to his wife and family too. That is a very big mental jump.

Once the search process and selection process begins, the person is pretty much over the cliff in terms of deciding not to stay back. Most surely, wherever he goes there is a better compensation package – even if slightly. Not because he was getting paid less fairly but most hiring companies know they have to give a sweeter deal to move the person.

When he confronts his manager – better comp is cited as a prime reason – incorrectly – why he she wants to move. It is an easier reason – it is a hard number plus one gets an elated sense of pride by flaunting higher market valuation. It is a more difficult argument to prove which workplace is better, has better opportunities etc for the sheer subjectivity of it.

At this point, throwing more comp has a very little ability to work. Even if one did match and made a compelling point why the current job is better the probability of winning is very low. Because – and here is where the second reality comes in – usually one has already committed to the other job before notifying the manager. Most definitely, one has mentally moved to the excitement of the new place.

Trying to get the person to mentally back off from that is very difficult. It is almost insurmountable to have the person fall on the sword in front of the prospective company as well as the family and explain why it was a bad decision to begin with to leave. There are too many bridges to be burned. And now his current company knows he was on the look out. It is far – and I mean very far – easier to just go with the original decision.

My advise to my managers is usually to not commit to any comp side at all. Work with the employee to convince himself that he actually wants to stay for all the right reasons. Signal that you can work out the comp side as long as all the other things are worked out. But make sure that the employee can undo the decision mentally and in front of others at home and new company first. The comp part is the easiest part. If you increase the comp first, you almost invariably are going to get the same decision – after a couple of days of “careful thinking”.

Comments?

I had originally seen this in a presentation made by a gentleman from CNN.

You can see this and many variations of this on youtube.

While this presentation was about ramifications on our education system, I think it is great also for us in the technology sector in terms of understanding how fast this whole space is moving.

If any one of you have run software companies, you probably have faced this problem at least once in your life. You have a software product that is very successful with the large customers (higher end of the market). But taking it down market – while sounding reasonably simple (after all, it solved more complex problems – right?), was never successful.

And you probably have heard the same “reasons/excuses” – mid-market customers have the same problems as the large customers… the software is too complex / costly for smaller customers, implementation takes too much time etc etc.

And you have wondered why can we not “package” the software up and sell it at a reasonable price point for the lower end market with very quick implementations. Well, you have company, at least – in me. Not once, not twice – but quite a few times, we failed in taking a software product down market. The definition of “failure” is not being able to sell quite a few copies of the “tightly packaged” products – obviously with far shorter sales cycle and implementation cycles than the larger customers. With one exception – only once in my experience, it actually worked. And it is important to understand why.

Here are my learnings:

First, technology is the easiest part. Shrink-wrapping a software – using templates, smaller set of APIs, limit setting – whichever path you take is usually simple and given a little time and money, can be easily accomplished. I need to add here that sometimes if the total cost of ownership dictates that the software be ported to a different platform (third party components, database, OS, J2EE vs .Net), that might take quite some time and money. Still not a difficult task.

Of course, naming your new product “Your Original Product LITE” or “Your Original Product EXPRESS” is the next logical step 🙂

The real challenge comes during the sales process. Your sales organization is acutely aware of the strength of the product (having sold it before to large customers or the internal reputation of the product). And that is where the difficulty starts. Invariably, the sales process goes to a point of feature-functionality war (feedback from the sales person’s contacts that the competitor’s product demo-ed very well or the prospect asked questions about certain features). It is infinitely difficult to stay within the “boundaries” if you know the product can do more and you feel pressure (real or imaginary) that the product needs to come off as the better one. Ask any sales person if you do not believe this. The sales person’s single focus at this point of time is to close the deal.

Even if the sales happened “within the boundaries”, the next challenge comes at the implementation level – maybe not that acute though. When a customer asks for another report or implement a unique business situation/case for them, the service consultant’s first, second and third instinct is to go ahead and implement it. First he/she knows it can be done. Second he/she, as a consultant, wants to come across as “knowledgeable” and “helpful” to somebody who helps pay his paycheck. At that point of time time, most are thinking of the “boundaries”. And thus the project is no more a “quick and simple” one.

So, is this winnable at all?

The only time it worked for me was in a small country in Central Europe where we we able to sell a high-end product that we had packaged down in really short sales cycles and definitely short implementation cycles. It was not about the country or the market – their problems were exactly the problems we had seen in the smaller prospects in US. The big difference was – this was done thru a different channel. We had trained this company on the product (the dumbed down version, of course) for two weeks. After that, they were free to sell and implement the product in the market. We got a cut of the license and maintenance. And it worked great!! Till this day, I am convinced, that the only reason it worked is because the sales persons and the implementors did not know any better. They had very little idea about the true power of the product or what it had done for large customers.

So, faced with requests for more features, they figured out how to work harder to downplay the importance of those features, find alternate ways to getting the value to the customer or possibly sometimes lose deals. (I never got visibility to the deals they lost).

So, my clear learning is, taking a high end software down market is a very difficult proposition (unless you use different channels altogether). On the contrary taking a software up market is far easier (it takes time and money though). If you need to play both the markets, it is my suggestion (somewhat unintuitive to many people) that you might want to think hard about having two different products if you insist on using the same channel to sell and serve.

Comments?
Rajib

What does it take to be a courageous leader? Courageous leaders differentiate themselves by how they take on new challenges. It does not take a lot of courage to run day to day operations. No doubt, running day to day operations is pretty challenging too. But leaders exhibit their true courage on how they deal with adverse and contentious situations. Here are the top 10 traits that I have observed in the leaders that I have considered to be truly courageous:
 
1. Exhibit Optimism: Courageous leaders are calm and have a “can do and will do” attitude that permeates a steely resolve in the teams.
2. Inspire and Influence: Courageous leaders focus on inspiring and influencing people by showing them the higher goals and giving them the resources to reach them instead of falling back on the command and control model. Command and control often gives quick results but the results have a short life.
3. Avoid Saying “Both”: Courageous leaders are not afraid of prioritizing. Faced with a myriad of choices, they adroitly focus the organization on a few goals.
4. Seek to Understand: Courageous leaders cut across teams and tie them together to a greater goal. The most valuable trait in building cross-organization teams is the ability to seek to understand before seeking to be understood. They understand that opposing views are necessary to make any forward progress.
5. Guts to get into the details: Courageous leaders do not consider themselves “above” certain operational details. While they do not unempower their teams, they have no difficulty into diving in whenever they need to. This rule is possibly the one that I have seen most managers fail on as they climb up the corporate ladder.
6. Willing to admit there might be a better way: Courageous leaders are willing to take risks, fail early (and cheap) and learn from them quickly. It is this openness to the idea that they might be wrong that makes them far more capable of adopting change. This trait also tends to make better listeners out of them.
7. Avoid going for the “perfect decision”: Courageous leaders understand that the trick to making the “right” decision is to make a decision quickly and then executing on it like crazy to make that the “right” decision. Nobody runs a control experiment side by side with the alternates. Get enough data and use gut rather than wait for all the data – is their usual motto.
8. Being “Right” versus being “Successful”: Faced with contentious situations, courageous leaders focus individuals and teams on what will make all of them “successful” rather than how they can be “right”. In today’s intelligence-based industries, where individuals are valued for their personal intelligence, it is often difficult for one to give up on what one believes is “right” for the greater good of being successful as a company.
9. Personal Ego: Courageous leaders focus on not aligning personal ego with a particular viewpoint. At the end of the debate, the leader thus, does not believe that he or she fell in grace by “losing” a point. This prevents him or her from arguing beyond a logical point (where making forward progress becomes more important than going more threadbare on the arguments). Conversely, they are careful to criticize viewpoints and not people.
10. Org charts: Finally, courageous leaders have scant respect for positions, roles, business cards and org charts. They realize that the right people – regardless of their position – need to be brought in to craft solutions. They understand that most problems cannot be solved by “re-drawing” boxes. So, they focus on getting teams across organizations to come together, get aligned on a common goal and give them the support and air cover to make mistakes to achieve those goals.

What have you learnt in your career as true courage in leadership?

Rajib