Active and Proactive Thinking

Proactive and Reactive Thinking: Learn the difference between proactive and reactive thinking and increase your creative capability
There are some people who always seem to be starting new projects. These projects are not always very sound and not even particularly creative. The point is that such people seem motivated to be proactive, whereas most people seem to be reactive.
Maintenance is the general management idiom. Things are to be kept running very much as they are now running. In any case, activities should be following the strategy and plans. There is the notion that the 'course' has been set, and it is now a matter of following the course.
This is all good sense. How can you get somewhere if you do not know where you are going? Obviously there are tight plans and looser plans. In the Six Action Shoes framework the navy shoe stands for strict routine. At every moment you do exactly what you are supposed to do. The brown shoe is more entrepreneurial. You have a given objective and must work within guidelines of budget and legality, but the rest is up to you.
Because of the notion of following a set course there is as much emphasis on deviations as there would be with maritime navigation. From this arises the concern with 'problem-solving'. A problem is a deviation from what should be. A problem is something that prevents you from doing what you are supposed to do.
In the teaching of creativity it quickly becomes obvious that most people want to use creativity to 'solve problems'. This is excellent and a very important use of creativity. As with a headache or a stone in your shoe, you know that a problem is there. You do not have to look for it. What is even more important is that the 'benefits' that will arise from solving the problems are obvious from the start.
That is the real attraction of problem-solving. If you can cut the cost of distribution, then you know the benefits you will have. This is much more satisfying than proactive thinking. In proactive thinking you set out to do something, but cannot foresee the benefits until you have the idea. 'We want a new way of closing a tube of toothpaste.' You may think of lots of ideas, but you are not guaranteed benefits from any of them. You might just have wasted your time.
IMPROVEMENTIn almost all cases improvement can be phrased as a problem: 'we need to speed up this process'. But in attitude an improvement belongs to proactive rather than reactive thinking. If you very clearly define the direction of improvement (reducing time, cost, steps, pollution, etc.) then you do seem to be tackling a problem: 'this is too slow'.
There does have to be the 'belief', however, that an improvement is possible. It is not as if something has gone wrong. You are not reacting to this problem. You are dealing with a wish of your own or a perception ('this is too slow'). If you do not solve a problem, you may be held up or otherwise in difficulty. If you do not set out to make an improvement, nothing much happens.
The need to make an improvement can easily become a problem. If a competitor has reduced the price of making cardboard cartons, you are in trouble if you cannot improve your own processes so as to match the reduced price.
It is also possible, though much rarer, to have in mind open-ended improvement: 'we want to improve this process in some way'. Obviously, quality efforts and suggestion schemes permit individuals to conceive of different ways in which a process can be improved. Quite often fashion provides the direction for improvement (for example, downsizing, cost-cutting, re-engineering, etc.).
OPPORTUNITIESAn opportunity may be reactive to changes in legislation or regulation. An opportunity may be reactive to new technology. An opportunity may be reactive to changes in the market place. In any particular case, it is always difficult to determine whether an opportunity is reactive or proactive.
A proactive opportunity means looking around to see how an opportunity can be created. When AeroVironment (largely owned by a friend of mine) developed a way of charging lead acid batteries in ten minutes, a lot of opportunities were potentially created: both for AeroVironment, but also for others. For example, Ford has announced a joint venture to charge up electric cars.
In the end it does not matter whether an opportunity is reactive or proactive. It still has to be assessed and developed as an opportunity. What does matter is how much thinking effort goes into proactive opportunities. If there is no proactive thinking at all then assets are being under-used.
AREA FOCUSIn my seminars and workshops I point out that there are two very broad types of focus. The first is Purpose Focus. The second is Area Focus.
There is no difficulty at all with Purpose Focus. What do we want to do? What is the purpose of our thinking? What do we want to achieve? Purpose Focus is almost exactly the same as normal management thinking. What is the problem? What is the objective? We want to know where we are going in order to find the way there.
To my surprise there has always been a big problem with Area Focus. This is surprising because nothing could be more simple than Area Focus. With Area Focus we simply state 'where' we want ideas. I want ideas ' in this area'. You simply define the area. The area can be broad: I want ideas in the area of tourism. The area can be very tight: I want ideas in the area of breakfast times in a two-star hotel.
Of course, there is a purpose even in Area Focus. The purpose is simply to get any ideas 'in that area'. But there is no attempt to achieve a defined objective. The ideas can be of varying types and can offer very different benefits. When I ask seminar participants to put down both Purpose Focuses and Area Focuses, more than half of the Area Focuses are really Purpose Focuses. Why is there such difficulty in doing something so very simple?
The answer lies in the difference between reactive and proactive thinking. With Purpose Focus a problem or objective is presented. We then 'react' to this. We may seek to recognise the situation. We may analyse it down into recognisable elements. We define needs. All this is reacting to the desired end-point. Then we look through our repertoire of standard responses. Morale is low. So we determine we need 'incentives'. What are the standard incentives? These could be money, time off, recognition, titles, etc.
So standard thinking seeks to recognise standard needs and to apply standard remedies. There is nothing wrong with this. The system is highly effective. That is what a doctor does in diagnosing and treating a patient. Medicine could not function otherwise. The bulk of our thinking needs to be like this.
The standard thinking has to be 'reactive'. We have to react to a problem or need. This standard thinking does not work with proactive thinking. There is nothing to react to with an Area Focus. That may be why so many people have difficulty with Area Focuses. An Area Focus provides only a starting point. We cannot work backwards from the end-point, because there is no end-point.
Our traditional thinking methods are based on analysis and judgment (including recognition). So they work well with Purpose Focuses, but not at all with Area Focuses. Some of the lateral thinking techniques make it possible to think in an Area Focus. For example, the 'Random Entry' technique can be used with any Area Focus and can open up new ideas. The 'Challenge' technique can also work on what is there and seek to develop new ideas.
INVESTMENTIt is not my purpose here to suggest that there is anything the matter with reactive thinking. That would be absurd. Nor do I wish to suggest that there is a sharp philosophical distinction between reactive and proactive thinking. There is a huge amount of overlap. The danger is that some people will argue that there is no real distinction and then proceed to spend all their thinking time on thinking that is clearly reactive. Opportunities will be missed. Creativity will be under-used.
There is a spectrum. At one end are those matters which are purely reactive. At the other end are matters which are purely proactive. In between there are matters which have elements of both reactive and proactive. What is needed is an investment of creative effort in proactive thinking. The simplest way to do this would be to include some Area Focuses on the Creative Hit List. It is practice in proactive thinking that is important. We get plenty enough practice in reactive thinking.
JOURNEYS AND EXPLORATIONSCan you start a journey without knowing where you want to go? The answer is 'yes'. You can set out to explore an area. You may impose a framework such as grid or simple compass directions. You may set sub-targets. But in the end your objective is not a particular destination but exploration of an area. In the matter of thinking the purpose of the exploration is to find new ideas, new possibilities and new opportunities.
How will you know that you have got somewhere useful? This is where the 'value sensitivity' encouraged under the yellow hat comes in. There is the habit of sensing and detecting potential value at an early stage. Without this, proactive thinking is going to be much less effective.

New postings

The Thinking Manager Postings resume this week

13 Easy Ways to Simplify Your Life

13 Easy Ways to Simplify Your Life
You’ve probably heard it a hundred times or more – if you want to reduce the stress in your life you need to simplify. This is much easier said than done, of course, and there is no shortage of experts who are happy to tell you exactly how to do it.
All of that advice and guidance can quickly become confusing and even overwhelming – so much for simplifying your life! We’ve sifted through this huge onslaught of information and picked out the thirteen best tips we could find to help you simplify your life.
How to Simplify Life
Our life is frittered away by detail ... Simplify, simplify.- Henry David Thoreau
#1 – Keep your perspective
It is so easy to be caught up in the every day hustle and bustle of life that things quickly get out of balance. What seems vitally important in the moment – sending one last email, putting the perfect finishing touches on your annual Christmas letter, and finding the ideal outfit for next week’s meeting – is often not that important.
When you find yourself under pressure and feeling overwhelmed, pause for a moment and ask yourself a very simple question:
Will this matter a day, a week, a month, or a year from now?
If the answer is no then chances are you need to regain some perspective on the situation.
#2 – Let go of an activity or commitment
Step back and take an honest look at all of the activities and commitments in your life. If you’re like most people, you will find at least one thing that has become a negative drain on your energy and time.
What was a good idea a few months ago has changed over time and is no longer such a good idea. Simplify your life by letting go of that activity or commitment, freeing yourself up, and reducing your overall stress level.
Each month, repeat the process and think about letting go of one activity or commitment that is no longer serving you.
#3 – Get rid of what you don’t need
This is similar to #2, but instead of freeing up your time, it is all about freeing up some space. We all collect “stuff” along the way - it is inevitable. Eventually space runs out, though, and our stuff turns into clutter that has an impact on our lives – consciously or unconsciously.
Simplify your space by getting rid of one or two things each month that no longer make sense to keep. You’ll be surprised at just how refreshing it is to reclaim even a little bit of space.
#4 – Learn to say “No”
One of the most common traps we fall into is saying “Yes” to every request that comes our way. Before long, our list of commitments includes an extra report at work, organizing the school bake sale, leading a reading group, making costumes for the community theater, building a neighborhood playhouse, etc.
There will always be many more worthy causes and important jobs to do than you have time to do them, so be more selective about the things you agree to do. Remember that when you stretch yourself too thin and take on too many commitments you end up unable to do your very best on each one.
#5 – There’s no such thing as perfect
We all strive to do our very best, but when we are carried away and try to achieve perfection we only succeed in driving ourselves crazy. The next time you feel yourself getting tense and worried about something or someone being imperfect, pause for a moment and remind yourself that nothing is ever perfect.
Instead, make a conscious choice about what is “good enough” in that particular situation and consider it a success when you achieve that level.
#6 – Get rid of emotional attachments to outcomes
This happens a lot, especially when it comes to our children. We want them to succeed and flourish, often in areas where we struggled when we were growing up.
Let go of your emotional attachment to a specific outcome – a child excelling in a sport, a report receiving particular recognition, your spouse surprising you with a romantic adventure on Valentine’s Day, etc. – and focus instead on supporting and valuing the outcome that actually does occur.
#7 – Take time for yourself
Everyone needs time on their own, especially parents and busy professionals. It is critical, though, that you take time for yourself on a regular basis. You might set aside an hour or two to read a book, take a walk after dinner, or just spend some time resting and relaxing.
Regardless of what you choose, taking time for yourself is one of the best ways to energize yourself and simplify your life.
#8 – Turn off your technology
It is nearly impossible to be out of touch or unable to communicate in our modern world. Your cell phone, pager, email, fax, instant message, internet browser, etc. are all right at your fingertips. There is such a thing as being too connected, though, so set some boundaries on the technology in your life.
Turn off your cell phone in the evening, answer email once a day instead of constantly throughout the day, or put down your laptop computer for an afternoon. Let yourself be unconnected to the rest of the world for a little while and relish in the freedom that creates.
#9 – Watch less TV
The television is one of those devices that can suck our energy and time away with hardly any effort at all. How many times have you spent an evening sitting on the couch flipping channels because there was nothing good on TV?
Schedule your TV watching for those programs that you really like and then turn the TV off. Focus instead on something that is more important to you – a book, a nap, a walk, etc.
#10 – Reduce debt
This one can have amazing benefits in all parts of your life. Carrying a heavy debt load weighs you down, creates stress, and increases the overall pressure in your life. Focus on getting rid of debt and get out from under that huge weight. Once your debt is under control, focus on staying out of debt so you don’t lose control again.
#11 – Use your vacation time
Some people are proud to declare that they haven’t used any vacation time in two, three, or even four years but that really shouldn’t be a source of pride. There is no glory and benefit in working constantly, never taking a break from the daily routine.
Don’t let your vacation time sit there waiting for “someday” when you’ll have time to use it – schedule your vacation right now and plan your responsibilities around it. You’ve earned that time off, so let yourself take advantage of what you legitimately deserve.
#12 – Be spontaneous
Routine is good to a certain extent, but sometimes you just need to break free and do something different. Let yourself be spontaneous, choosing what to do and how to do it based on your own wishes rather than someone else’s wishes. You’ll feel more in control, have more energy, and lift your spirits immediately.
#13 – Go to bed early
The vast majority of adults (and children, for that matter) do not get enough sleep each night. This chronic lack of rest affects every aspect of life, from the amount of energy you have to your performance at work or in school. Simplify your life by setting a bedtime and sticking to it. If your favorite TV show airs after your bedtime then use your VCR to record it and watch it the next day. Get in the habit of going to bed early and you will transform your life.

Goose Strategy

Geese Strategy: Synergy in Action
In the fall when you see geese heading south for the winter flying along in the "V" formation, you might be interested in knowing what science has discovered about why they fly that way.
As each bird flaps its wings, it creates uplift for the bird immediately following. By flying in a "V" formation, the whole flock adds at least 71% greater flying range than if each bird flew on its own.
Quite similar to people who are part of a team and share a common direction get where they are going quicker and easier, because they are traveling on the trust of one another and lift each other up along the way. Whenever a Goose falls out of formation, it suddenly feels the drag and resistance of trying to go through it alone and quickly gets back into formation to take advantage of the power of the flock.
If we have as much sense as a Goose, we will stay in formation and share information with those who are headed in the same way that we are going. When the lead Goose gets tired, he rotates back in the wings and another Goose takes over. It pays to share leadership and take turns doing hard jobs.
The Geese honk from behind to encourage those up front to keep their speed. Words of support and inspiration help energize those on the front line, helping them to keep pace in spite of the day-to-day pressures and fatigue. It is important that our honking be encouraging. Otherwise it's just - well... Honking!
Finally, when a Goose gets sick or is wounded and falls out, two Geese fall out of the formation and follow the injured one down to help and protect him. They stay with him until he is either able to fly or until he is dead, then they launch out with another formation to catch up with their group. When one of us is down, it's up to the others to stand by us in our time of trouble.
If we have the sense of a Goose, we will stand by each other when things get rough we will stay in formation with those headed where we want to go. The next time you see a formation of Geese, remember their message that: "IT IS INDEED A REWARD, A CHALLENGE AND A PRIVILEGE TO BE A CONTRIBUTING MEMBER OF A TEAM"
Lessons from Geese
Editor's Note: "Lessons from Geese" was transcribed from a speech given by Angeles Arrien at the 1991 Organizational Development Network and was based on the work of Milton Olson. It circulated to Outward Bound staff throughout the United States. We share it here with the alumni community hoping that we can all learn these lessons.
· FACT 1:
As each goose flaps its wings, it creates “uplift" for the birds that follow. By flying in a "V" formation, the whole flock adds 71% greater flying range than if each bird flew alone.
LESSON:
People who share a common direction and sense of community can get where they are going quicker and easier because they are traveling on the thrust of one another.
· FACT 2:
When a goose falls out of formation, it suddenly feels the drag and resistance of flying alone. It quickly moves back into formation to take advantage of the lifting power of the bird immediately in front of it.
LESSON:
If we have as much sense as a goose we stay in formation with those headed where we want to go. We are willing to accept their help and give our help to others.
o FACT 3:
When the lead gooses tires, it rotates back into formation and another goose flies to the point position.
LESSON:
It pays to take turns doing the hard tasks and sharing leadership. As with geese, people are interdependent on each other's skills, capabilities and unique arrangements of gifts, talents or resources.
· FACT 4:
The geese flying in formation honk to encourage those up front to keep up their speed.
LESSON:
We need to make sure our honking is encouraging. In groups where there is encouragement, the production is much greater. The power of encouragement (to stand by one's heart or core values and encourage the heart and core of others) is the quality of honking we seek.
· FACT 5:
When a goose gets sick, wounded or shot down, two geese drop out of formation and follow it to help and protect it. They stay with it until it dies or is able to fly again. Then, they launch out with another formation or catch up with the flock.
LESSON:
If we have as much sense as geese, we will stand by each other in difficult times as well as when we are strong.

Time Management Worst Practice 2

Time Management Worst Practice: Always Saying Yes
Saying ‘yes’ to requests for your time is not always a bad practice. In fact, the better you are at managing your time and your projects, the more likely it is that you will be chosen to handle important tasks that need to be completed quickly with quality and care.
Taking on and completing important projects can be very rewarding and can lead to promotions and bonuses. The problem occurs when you say ‘yes’ to almost any request no matter what it is, who is asking, or how much work you already have on your plate.
Always saying ‘yes’ is a major source of overload and stress, and it can lead you away from your priorities into less important tasks. If you want to avoid the work and stress associated with attempting too much, you need to decide carefully whether to accept new tasks.
People that say ‘yes’ when they should be saying ‘no’ usually do it for one of two reasons. The first is that many say ‘yes’ automatically without thoroughly thinking about the request.
This could be a reaction you save for certain people like your boss, or a family member, or the president of your volunteer group, or it could just be your normal way of dealing with requests.
Perhaps you feel good about serving and feel that by accepting the extra responsibility you are making a difference. Maybe you feel that taking on the extra work is the best way to get that promotion you’ve been waiting for.
Both of these are perfectly valid reasons for accepting a new project; but when you accept every task thrown at you, you will quickly reach the point of attempting too much for your own good. When you do, your overload will produce stress, lower your physical and mental wellbeing, and reduce your productivity and effectiveness.
People that say ‘yes’ automatically usually don’t realize how much each new commitment is costing them. Remember that you can do almost anything, but you cannot do everything.
Whenever you accept a new task or responsibility, you are always giving up something else. You could be giving up your free time, or an extra twenty minutes of sleep, or time that you would have spent with your family, or exercising.
Without realizing it, you could be choosing to spend your valuable time doing trivial things instead of what is most important to you. Let me repeat this: Every time you choose to do something, you always give up something else you could do with that time.
There is a saying that if you throw a frog into a boiling pot of water, the frog will immediately jump out; if however, you put a frog into a pot of cool water and slowly raise the temperature, the frog will get boiled.
If someone came to you and gave you twenty projects to work on over the next couple of weeks all at the same time, you would certainly take notice and have to at least consider what you would have to give up to complete the extra work. However, when the new tasks come in slowly, trickling in one at a time, it is more difficult to realize what you are giving up until you’ve already overcommitted.
If you want to escape from the worst practice of always saying ‘yes,’ your first step has to be to promise yourself to consider each request carefully before accepting it, instead of doing it automatically.
Make it your new habit to always stop and think before accepting a request no matter what it is or who is asking. Then at least you will be making an informed conscious decision fully aware of what you are giving up in order to accept the extra responsibility.
The second reason people say ‘yes’ when they should be saying ‘no’ has to do with their internal motives. If you have taken the first important step and are now considering each request before accepting, but you still find yourself overloaded because of saying ‘yes’ too much, you may be facing a psychological barrier that is holding you back.
The most common ones are a desire to please, fear of rejection, and guilt. You may be saying 'yes' because of a payoff you are receiving (feeling useful), or because it is the path of least resistance (don't want to confront the asker.)
Mahatma Gandhi said, "A 'No' uttered from deepest conviction is better and greater than a 'Yes' merely uttered to please, or what is worse, to avoid trouble."

Time Management

Time Management

Time discovers truthAnnaeus Lucius Seneca
Developing time management skills is a journeythat may begin with this Guide, but needs practice and other guidance along the way.
One goal is to help yourself become aware of how you use your timeas one resource in organizing, prioritizing, and succeeding in your studiesin the context of competing activities of friends, work, family, etc.
First: try our exercise in time management
Strategies on using time:
Develop blocks of study timeAbout 50 minutes? How long does it take for you to become restless?Some learners need more frequent breaks for a variety of reasonsMore difficult material may also require more frequent breaks
Schedule weekly reviews and updates
Prioritize assignmentsWhen studying, get in the habit of beginning with the most difficult subject or task
Develop alternative study places free from distractionsto maximize concentration
Got "dead time"?Think of using time walking, riding, etc. for studying “bits”
Review studies and readings just before class
Review lecture material immediately after class(Forgetting is greatest within 24 hours without review)
Schedule time for critical course eventsPapers, presentations, tests, etc.
Try the University of Minnesota's Assignment Calculator
Develop criteria for adjusting your scheduleto meet both your academic and non-academic needs
Effective aids:
"To Do" listWrite down things you have to do, then decide what to do at the moment, what to schedule for later, what to get someone else to do, and what to put off for a later time period
Daily/weekly plannerWrite down appointments, classes, and meetings on a chronological log book or chart. If you are more visual, sketch out your scheduleFirst thing in the morning, check what's ahead for the dayalways go to sleep knowing you're prepared for tomorrow
Long term plannerUse a monthly chart so that you can plan ahead.Long term planners will also serve as a reminder to constructively plan time for yourself

Time Management Worst Practice

Time Management Worst Practice: Over scheduling and Over organization

Over scheduling is the practice of trying to plan your days, weeks, or projects with too much detail.
Over scheduling is usually overcompensation to doing little or no planning by going to the other extreme. The problem with this practice is that the extra details being added to your plans don’t add any real value—they don’t make the plan any better—and in fact make it confusing and overly complicated.
Complicated plans and schedules tend to be inaccurate and difficult to follow leading to frustration. Here is an example of an overscheduled day:
- Wake up at 7:30am
- 7:30am Shower (10 minutes)
- 7:40am Breakfast (10 minutes)
- 7:50am Commute to work (20 minutes)
- 8:10am Read email (20 minutes)
- 8:30am Voicemail (20 minutes)
- 8:50am Faxes (10 minutes)
- 9:00am – Call Steve regarding memo (5 minutes)
- 9:05am Prepare memo for John (15 minutes)
- 9:20am Coffee break (5 minutes)
- 9:25am Research for presentation (20 minutes)
- 9:45am Call Mike about presentation (5 minutes)
- 9:50am Prepare presentation (1 hour)
- 10:50am Bathroom break (5 minutes)
- 10:55am Prepare for team meeting
...
You get the idea. People not familiar with daily planning can easily fall into the trap of attempting to plan their time this way.
There are several problems with this schedule:
· It contains irrelevant tasks (shower, breakfast, commute, bathroom break, coffee break) that don’t add any value to the plan. These tasks don’t have to be included in your schedule since they are either part of your normal routine (shower/breakfast) or not relevant (bathroom break).
· Many entries in the schedule are for small tasks that would be better of scheduled as part of larger projects. For example, the tasks ‘Research for presentation’, ‘Call Mike about presentation’, and ‘Prepare presentation’ are all part of the ‘Marketing Presentation’ project. The extra level of detail in the schedule does not add significant value as long as these tasks are recorded as part of the project plan (see Using a More Effective To-Do List.)
· The entries are scheduled in a way that makes it very difficult to adapt the plan to changing circumstances. The tiniest interruption at the wrong time could throw off the entire schedule. Try to leave some extra buffer time around scheduled activities to account for unexpected interruptions. Using project blocks as part of Weekly Planning is a good way to do this.
· The estimates leave no room for error. If a task takes just a bit longer than the specified amount, the whole schedule is thrown off. This is another problem of scheduling specific tasks rather than projects.
No wonder some people claim they have no time to plan, or that planning doesn’t work for them, or that it’s too restrictive.
If this is what their plans look like, all of these things are true. The best practices of Effective To-Do List, Weekly Planning and Daily Planning help you plan your time without over scheduling.
As we’ve seen with over scheduling, when you take a good practice to the extreme sometimes you get a worst practice.
Over organization turns practices like planning, writing things down, and thinking things through into liabilities that hinder, rather than enhance, your productivity.
Over organization is a good example of gold‑plating, trashing and drifting into trivia applied to organization and time management.
When you spend all your time planning and organizing rather than doing, you are gold‑plating your time away just like when you play with fonts instead of writing the report.
An example of over organization while planning is breaking even a simple task down into smaller and smaller steps. In theory, you could continue breaking up tasks into smaller steps almost indefinitely. At some point, you just have to stop planning and start doing.
For example, you could break down the task of sending an email into: researching the contents, creating an outline, first draft, editing, proofreading, and sending. The question you need to ask yourself is this: does breaking this task up into smaller steps add any value? In this case, it does not.
Over organization is one of those activities that may seem important—you are planning and getting better organized after all—but on closer inspection is really a waste of time because the extra effort is not helping you achieve what you want.
The main causes of over organization are the same ones as gold‑plating. Over organizers may enjoy the practice of planning and organizing so much that they continue doing it even when it starts distracting them from other more important activities they should be doing instead.
They are more interested in feeling organized than getting things done.
Over organizers may also use the excuse of planning and organizing as a way of avoiding an unpleasant task, or as a way to avoid confronting an uncomfortable issue.
Finally, over organization may be a sign of perfectionist tendencies where a person feels that they need to plan every single detail and prepare for all possible contingencies in order to avoid making mistakes.
Over organization can easily lead to the condition known as analysis paralysis, where you get stuck planning, organizing, and preparing and never get around to doing anything. Winston Churchill is quoted as saying “The maxim ‘nothing avails but perfection’ can be spelled PARALYSIS.”
To stop over organizing, you first need to be aware that you are doing it. If you feel you are susceptible to over organization, use questions to catch yourself during your planning periods. "Is my planning adding any value?" If the answer is no, then it is time to stop planning and start doing.
For many people, over organization is just a bad habit. The good news is that, like any other bad habit, you can replace it with a much more effective habit once you are aware of it.

Next week

Starting next week Tugen Resources will be focusing on Time managent. This is in line with the weekly topics that we will be highlighting every week.

We will discuss the worst and best practices in time managent. At the end, members will have the opportunity to down load the content in real time.

Regards

Tugen Resources

Drifting Into Trivia

Time Management Worst Practice: Drifting into Trivia
Drifting into trivia is a phrase coined by Peter Drucker and describes the practice of drifting from important and valuable tasks into less important tasks.
There are many opportunities during each day for us to drift into trivia: remembering a phone call we need to make, coming across a piece of paper reminding us of some other project, getting an email asking us a question, a call from a colleague, a drop‑in visitor, etc. Before you know it, the important task that you were working on has been hijacked by a much less important errand.
If you find yourself routinely working on unimportant things, you may be drifting into trivia more often than you think. The hardest part about this worst practice is realizing that you are doing it. Drifting into trivia is an easy way to escape doing an important but unpleasant task by jumping at the first chance to do something else, even when that something else is not at all important.
Drifting into trivia is not always easy to spot. Sometimes the work that you drift into seems important, but if you take a step back and reflect on what you are really trying to accomplish, you realize that the work doesn’t really serve your objectives and is merely distracting you from what you really need to do.
Spending more time playing with the fonts and graphs of a marketing report than working on the actual content, or working on a report that no one needs, are both examples of drifting into trivia in the guise of doing productive work.
The key to escaping from this worst practice is to resist the temptation offered by the less important distraction and continue working on your important tasks. The best way to resist is to have clear priorities and objectives. When your priorities are clear, you will be able to tell when that tempting distraction is less important. You will realize immediately that by doing it you would be drifting into trivia.
Another useful tool is to use the Weekly Planning best practice to schedule project blocks, which are thirty to ninety minutes of uninterrupted time that you allocate to your top-priority projects ahead of time. If something trivial comes up during one of your project blocks, you can postpone it until after your block is done.

Kenya Re IPO

Kenya Reinsurance Corporation has been insuring insurance companies for close to 30 years. It has done so profitably though as a Government corporation, State appointees who have had no insurance or reinsurance experience have at times been at the helm. In a few cases, they had little or no business experience.
GA_googleFillSlot("AllAfrica_Story_Inset");
Kenya Re started as a compulsory reinsurer. Those were easy days when 25 per cent of all direct insurance and 25 per cent of all reinsurance premiums ended up at its bank. Without an office of Commissioner of Insurance, Kenya Re acted as a regulatory authority.
But compulsory share of business was reduced and Kenya Re had to look within and internationally for reinsurance agreements. In its 2006 annual accounts, Kenya Re boasts presence in 33 countries in Africa, Asia and the Middle East. It has business relations with 116 companies outside Kenya.
Kenya Re's profitability depends on the quality and performance of the insurance companies it reinsures. Recent statements of accounts show growing profitability of core business. In the 1980s and 1990s, instability due to low rates and high third-party liability awards characterised insurance business.
Public perception largely determines the success of initial public offers. Most are oversubscribed, and allocation of shares is limited. A corporate investor is, therefore, restricted in how much it can purchase initially. Corporate influence is, however, felt once shares start trading at the stock exchange, with the initial buyers cashing in on higher prices.
Speculation drives many initial buyers in the hope of making short-term gains. Buyers from the stock exchange include speculative buyers and more sophisticated corporate or long-term investors. The latter are more analytical and motivated by medium and long-term profitability.
Whereas initial buyers rely on the prospectus and opinion of the Capital Markets Authority, later buyers rely on the analysis of the company's performance. In recent months, Kenya Re has gone through rough waters, with top executives taken to court over corruption. This has resulted in negative publicity.
The new executives are good for the IPO. Longer-term price movements will depend on whether the enthusiasm flows to the boardroom and the management team. The team will be judged by its ability to tap the local, regional and international markets. As a potential Kenya Re shareholder, I would pay close attention to the words of the chairperson and managing director and wait to see whether the business figures match the words.
If Kenya Re is to grow into a major continental and global reinsurance company, it must boost business in size and profitability. Last year, business premium income grew to Sh3.1 billion from Sh2.4 billion the previous year, a commendable growth of 28 per cent.
Relevant Links
East Africa Banking and Insurance Economy, Business and Finance Company News Kenya Stock Markets
Similar growth will have to be realised consistently. Shareholders must accept to increase capital, forego dividends in the short-run and streamline management expenses, which rose from Sh290 million in 2005 to Sh453 million last year.
Finally, the company must focus on its core business rather than distractive investment in property. Will the new team inject the dynamism, integrity and cutting edge business practices required of a modern reinsurance corporation? The will and professional capacity are certainly there. A more vigilant and critical shareholder will be watching.
The writer is an insurance consultant

Challenges to the freenium model

Startups and the Challenges of the Freemium Pricing Model
Challenges of the Freemium Model

1. Deciding what to include in the free version and what to offer in the premium version is non-trivial. The trick is to put enough in the free version to get traffic and usage -- but not so much that there's not enough incentive for a certain percentage of people to upgrade.

2. Though hardware, bandwidth and infrastructure are cheap (and getting cheaper), they're still not free. Supporting thousands of free customers costs money and unless there's enough money coming in from paying customers, there might not be enough cash coming in to subsidize the free folks.

3. Support is a problem. Though in theory you can take the position not to offer any support to the free users, in practice, it's hard to have the discipline and processes in place to actually do this.

4. Pricing for the premium version is likely impacted by the fact that there's a free version. For example, I don't think one could successfully offer a premium product for $250/month if there's a free version out there. The premium version would have to be really good and an order of magnitude better than the free version. This is probably why most freemium products are less than $50/month.

5. It can get a bit tricky to use scaling pricing models for a freemium product. For example, let's say you charge $20/month "per user" (per seat or per whatever). For many customers, this creates an added barrier to upgrading. If they have 10 users, there's even more incentive to just have all 10 users uses the free version. Or, they could just buy one paid license (for the key features they need) and keep the other 9 on the free version.

6. Attrition rates can be unpredictable and potentially higher than traditionally priced products. For example, if there's not enough "value" in the premium version, it's possible that even customers that upgraded will eventually revert back to the free version.

Of course, there are lots of benefits to the freemium model too -the most important of which is efficient marketing. It's a greaty way to get early users to use the product and have a pool of potential people to upgrade.

What are your thoughts? Have you tried the freemium model? If so, what has your experience been? Are there other challenges that I missed? Would love to hear your ideas in the comments?


Thinking CEO

A proven checklist for business success

• IMPROVE basic, measured efficiencies continuously?
  
• THINK simply and directly about what you are doing and why?
  
• BEHAVE towards others as you wish them to behave towards you?
  
• EVALUATE each business and business opportunity with total, fact-based objectivity?
  
• CONCENTRATE on what you do well?
  
• ASK questions ceaselessly about performance, markets and objectives?
  
• MAKE MONEY- knowing that, if you don't, you can't make anything else?
  
• ECONOMISE always seeking Limo (Least Input for Most Output)?
  
• FLATTEN the organisation to spread authority and responsibility?
  
• ADMIT to your own failings and shortcomings and correct them?
  
• SHARE the benefits of success with all those who helped to achieve it?
  
• TIGHTEN up the organisation wherever and whenever you can because familiarity breeds slackness?
  
• ENABLE everybody to optimise their individual and group contribution?
  
• SERVE your customers with all their requirements to standards of perceived excellence in quality?
  
• TRANSFORM performance by innovating creatively in products and processes including the processes of management?

Setting SMART Goals

• Creating S.M.A.R.T. Goals
  
• Specific - A specific goal has a much greater chance of being accomplished than a general goal. To set a specific goal you must answer the six "W" questions:
  *Who: Who is involved? *What: What do I want to accomplish? *Where: Identify a location. *When: Establish a time frame. *Which: Identify requirements and constraints. *Why: Specific reasons, purpose or benefits of accomplishing the goal.
  EXAMPLE: A general goal would be, "Get in shape." But a specific goal would say, "Join a health club and workout 3 days a week."
  Measurable - Establish concrete criteria for measuring progress toward the attainment of each goal you set. When you measure your progress, you stay on track, reach your target dates, and experience the exhilaration of achievement that spurs you on to continued effort required to reach your goal.
  To determine if your goal is measurable, ask questions such as......How much? How many? How will I know when it is accomplished?
• 
  Attainable - When you identify goals that are most important to you, you begin to figure out ways you can make them come true. You develop the attitudes, abilities, skills, and financial capacity to reach them. You begin seeing previously overlooked opportunities to bring yourself closer to the achievement of your goals.
  You can attain most any goal you set when you plan your steps wisely and establish a time frame that allows you to carry out those steps. Goals that may have seemed far away and out of reach eventually move closer and become attainable, not because your goals shrink, but because you grow and expand to match them. When you list your goals you build your self-image. You see yourself as worthy of these goals, and develop the traits and personality that allow you to possess them.
  
• - To be realistic, a goal must represent an objective toward which you are both willing and able to work. A goal can be both high and realistic; you are the only one who can decide just how high your goal should be. But be sure that every goal represents substantial progress. A high goal is frequently easier to reach than a low one because a low goal exerts low motivational force. Some of the hardest jobs you ever accomplished actually seem easy simply because they were a labor of love.
  Your goal is probably realistic if you truly believe that it can be accomplished. Additional ways to know if your goal is realistic is to determine if you have accomplished anything similar in the past or ask yourself what conditions would have to exist to accomplish this goal.
  
• Timely - A goal should be grounded within a time frame. With no time frame tied to it there's no sense of urgency. If you want to lose 10 lbs, when do you want to lose it by? "Someday" won't work. But if you anchor it within a timeframe, "by May 1st", then you've set your unconscious mind into motion to begin working on the goal.
  T can also stand for Tangible - A goal is tangible when you can experience it with one of the senses, that is, taste, touch, smell, sight or hearing. When your goal is tangible you have a better chance of making it specific and measurable and thus attainable.
  

The art of follow up

==========================================The Art of Follow-Up========================================== What's the most important marketing skill? You might be surprised at the answer. It's not having a great marketing message, powerful marketing materials and a bullet-proof marketing plan. All of those are certainly important but not as important as... ***Follow-up*** I joke how people are looking for a "Killer marketing message" that will make people jump up and Down with excitement when they hear it. Sorry, but that's as much of a myth as unicorns or a balanced national budget. But people want to believe that myth, so they spend forever trying to perfect their message. Look, all your message can get you is some initial attention. That's all. And virtually every single marketing action after that is follow-up. When someone shows some interest in your services (when you deliver a decent, but not mythical, marketing message), you need to follow-up with some more information. Once they've read that information, you need to follow-up to determine if there's a deeper interest. And if there's a deeper interest, then you need to follow-up to set up an appointment. But it doesn't end there. Once you have an appointment, you need to follow-up to confirm that appointment (yes, people flake out). And once you've had the appointment you need to follow-up with a proposal or to close the sale. Follow-up never ends. Follow-Up Secrets Here are some follow-up secrets I've learned over the years that are important to understand and master if you're going to attract more clients. 1. Know where you are in the game When you follow-up with someone, the purpose is to move the prospect from one base in the marketing game to the next base. If you try to jump bases (or move too fast), you tend to get rejected by the prospect. If you move too slow with your follow-up, you loose the interest you've generated up to that point. 2. Don't move too fast When you get someone's interest (say at a networking meeting) and then say you'd like to call back to talk with them, that's fine. But when you make that call and immediately try to set up an appointment, you'll likely get some resistance. Remember, people want more familiarity and some information before they meet with you. So your follow-up system needs to build that in. One way to do this is with pre-written emails and links to articles or to your web sites. 3. Don't move too slowly If you give a talk and get cards from people who are interested in knowing more about your services, how soon should you follow-up?The very next day. For each day you don't follow-up, interest wanes. If you have only a few follow-ups, use the phone. If you have many, send an email to set up a time to talk in the upcoming week. Stale follow-ups are just that. They've forgotten what interested them in the first place, so when you call back after several weeks it's like starting all over again. 4. Balance fast and slow The key to effective follow-up is balancing the fast and the slow. Fast to get back to someone when they show interest; slow to get to know them. Fast to provide information requested; slow to discuss what this information means to their business. Fast to get a proposal in the mail; slow to discuss the details of that proposal. 5. Watch your assumptions What if someone doesn't get back to you? You've followed up promptly and you don't hear back right away. What does this mean? Only one answer: Who knows? It could be anything. But we are quick to jump to the conclusion that it's bad news. Not always. They might be very busy with a big priority or could even be out on vacation. So don't jump to conclusions. Just keep following up. Just watch that you don't sound desperate! 6. When to stop following-up Let's say you have a prospect you've either met with or done a proposal for. You thought everything was going well, but they aren't returning your calls. Do you keep leaving messages or do you give up? What I recommend is leaving one last message that goes like this: "Hi John, I've been trying to get back to you about the project but haven't heard from you for a couple weeks. I don't want to keep pestering you, so if I don't hear back from you, I'll assume you don't want to move ahead. I'll leave the ball in your court. Please call if you want to take the next steps, but this is the last message I'll be leaving. Hope to hear from you. My number is ..." This approach works. If they actually are interested, they'll call you back. If they don't, well there's your answer. It's time to move on. 7. Create follow-up systems To streamline your follow-up, create systems you can use over and over again. A follow-up system consists of specific steps you take each step of the way. It might work something like this: a) Prospect learns about your service and visits web site b) Prospect fills out form on the web requesting more information c) Prospect receives an automated email from you with web link d) You send out personalized email requesting an appointment e) You follow-up by email until appointment is set f) You meet with prospect by phone g) After phone appointment you send agreement h) After a few days you send another email i) After a few more days you leave a phone message j) Prospect ultimately gets back to you with a yes or no Once your follow-up system is designed and fine-tuned, you can use it reliably to turn many prospects into clients. This is exactly how I built my business. It didn't happen by chance. I invite you to use it to build yours. * The More Clients bottom line: The skill of follow-up is the glue that holds all of your marketing together. It's what bridges the gaps between initial connections, information, meetings and proposals. Make it a priority to master this skill as soon as possible. *******************************The Thinking CEO www.thinkingmanagers.com *******************************

Retaining Customers

Retaining the Customers
The reasons why companies lose customers ('customer attrition' is the marketing jargon for this) are easy to identify in theory, particularly when you take the customer journey approach – examining all the stages in the recruitment process from first contact through to the time when the contract expires and the customer is free to move. The reasons range from poor customer service in the contact centre or other channel, financial issues – such as affordability or whether the customer was sold the right proposition in the first place, technical issues (e.g. system or equipment failure) and the like.
Attrition is rarely an instant process. It often takes place after several events. For example, a customer may call to query the price being charged, enter a dialogue with the contact centre agent about alternatives, commit to a lower cost contract, and then call again still unhappy with the contract. A customer regarded as being at risk of attrition (either because they have been identified as such through application of churn prediction model, or because of the severity of a problem raised in a call) may be escalated to an attrition prevention team, where new processes start.
Attrition can occur at all stages of the customer management cycle – even before acquisition e.g. the customer who joins with the intention of leaving. Attrition is caused by various factors. These include things we can't control, such as customer exit from the category (perhaps because their life-cycle moves on) – although even here we might be able to extend their use of the category.
Poor communication, service or customer experience is one of the main causes, as is poor management of the customer across different channels or media. We may also lose customers because of a weak retention proposition. Staff play a key role in retention, particularly in contact centres, so staff retention is correlated with customer retention – both ways.
Giving staff a tough retention job often creates staff attrition, while high staff attrition reduces the quality of contact centre work, increasing customer attrition. The Internet has affected customers' propensities to search for competitive propositions and to switch. Aggregator and switching sites are the latest wave of change in an Internet increasingly run by customers (the idea of Web 2.0).
Managing retention is just one aspect of managing the customer's journey, and part of this is managing the customer's experience. Customer experience management is now the focus of many marketing, sales and service projects, particular in companies with large contact centres or those using several different customer management channels.
Customer experience management focuses – or should focus - on how to manage everything that contributes to the customer's experience of your products, their associated services, the promotional campaigns through which they are offered, the brand within which they are provided, and things you control less directly – how the product or service is offered through or with third parties, expectations generated by you, by media coverage (by PR), by other customers (through word of mouth) and even by competitors.
It is an integrating perspective, crossing boundaries of marketing, sales and service, and of different channels of communication and distribution. It has a broader scope than contact management. But its integrating perspective is too easily abandoned. I often hear companies discussing how they manage customers' contact centre experience. When I hear that, I look out for disconnects between the contact centre and other channels, such as direct mail, branch service operations and so on.
However, focusing on customer experience - even just in a contact centre – is beneficial. It forces a strong focus on the customer. It reminds us that, particularly in service industries, most experience is not of marketing or sales efforts, but of operations.
Customer experience is part of the customer journey, which is a time slice through customer experience. Experiences are a sequence of events. There are many sequences or journeys, usually inter-related. The shortest include web visits, telephone enquiries, even opening direct mail. These may be part of a longer sequence – product or service acquisition, themselves part of a product use journey.
In the middle are contract-length journeys e.g. experience of a mobile phone company or car insurer for the contract period. At the other extreme are life-stage and lifetime journeys, such as the journeys many people have with life insurers, banks and retailers and other companies to which customers tend to be loyal for long periods (e.g. automotive, airline, holiday). One of the longest journeys of all is the category journey. The longer the journey, the closer the customer's feelings about it tend to be to their feelings about the brand.
Improving retention demands improved retention capability (data, systems, processes, measures etc.) and better deployed capability (e.g. consistent objectives, strategy, incentives). A balanced, steady programme of change seems to work better than dramatic progress in one or a few areas. Strong change management disciplines help – and these are less widespread than they should be – although in customer service departments they tend to be stronger than in marketing and sales.
Perhaps most important of all is self-awareness about the company's current position – not just how well it manages retention, but how well it manages change with retention as the objective, how well it develops and deploys its retention capability. Understanding is the key to good retention work – defining what retention is, understanding why it occurs and what can be done with it, particularly in a multi-channel, multi-product situation. Financial aspects are important – this means understanding the relationship between acquisition, retention and profit.
Prediction is important too, and for this good customer insight is required, using not only the classic data sets of database marketers, but also research, customer satisfaction analysis and customer-given data. This latter is particularly tricky, as you need to learn what data can reasonably be requested from different kinds of customers, and how much truth is told, rather than fiction.
Good retention practice depends on having a retention strategy which has been shown to be critically important to the business, owned by someone with the authority and budget to do something about it. This strategy identifies which customers or types of customers are worth retaining and which can be retained cost-effectively. The strategy must be properly implemented, which means that it is defined in a shared way, understood by all involved in its implementation, and is targeted in a way that is consistent with other policies (e.g. product sales volumes, profit), actionable, and measurable, with agreed governance in relation to other objectives (e.g. acquisition, customer development).
Retention is normally managed better in companies with a history of stability in marketing (product and customer) and service planning and delivery, across all channels. This is because it takes time to learn what works, and to test the lessons.
Customer attrition

SWOT Analysis

SWOT: Assess the strengths and weaknesses of your business, as well as the opportunities and threats, with SWOT analysis
How far is my company away from failure? The question itself sounds like an admission of inadequacy. The confident manager surely doesn't walk around waiting for nemesis to strike. Rather, confident people strut the stage like a colossus, with all the certainty, say, of Bill Gates. The question, though, was inspired by Gates, who observed that 'Microsoft is always just two years away from failure.' This wasn't self-deprecation, but sober analysis.
One of management's trustiest tools is the SWOT analysis. You take a calm, cool look at the organisation's Strengths, Weaknesses, Opportunities and Threats. Then you seek to capitalise on the Strengths, Eliminate the Weaknesses, seize the best Opportunities and counter the Threats. Could the magnificent success of Microsoft, with its 90% gross margin and $9 billion of cash, really be threatened? In a brilliant study in Worldlink magazine, Howard Anderson has shown that the answer is Yes - a dozen times over. Although the threats are specific to the software industry, they are also generic. Try them on your own firm:
1. Could newcomers (including breakaways from your own company) create damaging competition? 2. Is there an equally powerful force in the market which could muscle into your territory?3. Is there a rival technology or other differentiator which could come out on top?4. Are you weak compared to the competition in a key market segment? 5. Is the market developing in ways that favour competitors more than you? 6. Could your customers takes major sources of revenue away? 7. Is there a major area in the market where you lag rather than lead? 8. Does a competitor have a stronger hold on your biggest customers? 9. Is there a growing market where you are being left behind? 10. Are there environmental/regulatory threats? 11. Could unsuspected challenge arrive from outside the existing industry? 12. Is your market too broad for all threats to be safely covered?
AN INTIMIDATING LISTThe thirteenth question, of course, is whether, if any of the dozen apply to your business, you are doing anything effective to counter the Threat or, better still, to convert Threat into true Opportunity. It's an intimidating list, even for mighty Microsoft, especially when you see the names of its leading enemies: Sun Microsystems, the big banks, Cisco, Compaq, Netscape, Oracle, SAP and IBM. The latter giant provides Anderson with his starting point. Could what happened to IBM afflict Microsoft? His company, The Yankee Group, had been deeply impressed by the Strengths deployed by IBM in 1982 - and not surprisingly.
IBM led in every important market of the time: mainframes, communications, mainframe storage, mincomputers, and personal computers. It earned more profit than the next nine computer firms generated in total sales, spending more on R&D than they made in earnings. The Yankee Group concluded that IBM was therefore invulnerable - yet the giant was about to embark on a prolonged slide that, amazingly, leaves its market value lagging behind both Microsoft and Intel, and by no small margin, either. IBM's $86 billion of mid-1997 market capitalisation compares to $149 billion for Microsoft and $124 billion for Intel: IBM should plainly have held on to its old strategic investment in the latter. How could the Yankee Group's assessment be so spectacularly wrong?
In the first place, never concentrate just on your own or anybody else's Strengths. That's highly dangerous, partly because they can so easily turn into Weaknesses. Thus IBM's domination of mainframes, and dependence on them for the bulk of its profits, became an incubus as the market moved away to the PCs from which Intel and Microsoft drew their super-growth. The latter's similar domination and dependence in PC operating systems almost moved from Strength to Weakness as the Internet took off - and Gates was much nearer than his 'two years away from failure' when, with a mighty effort, he reversed engines and poured billions into Net, software probably just in time.
Second, market share and leadership by size are not strongpoints in themselves. In PCs, Compaq was able to exploit a world share of around 3% far more effectively than IBM, which had three times the market. The issue is how the market share, whether leading or not, has been achieved and sustained. Is the product or service perceived as superior? Is it cheaper? Is the distribution more effective? Is the cost level lower? Is speed-to-market faster? Are customer requirements met more accurately?
REACTION IN CRISISIn the case of Compaq v IBM, curiously enough, the answers were all negative. Compaq had no significant advantage in product, distribution, costs, price, speed-to-market or customer satisfaction. But in the money-losing crisis into which Compaq suddenly plunged, it reacted radically on every point to create a stronger platform than its rival. The cost ratio, for instance, came down from 31% to 12.5% - an astonishing performance - as new products were launched at high speed, and the premium price policy was abandoned in favour of leading price levels downwards.
The key Strengths at Compaq were therefore intangibles, as were the Weaknesses at IBM. The smaller company was able to react and reform at speed; the larger could only react slowly and reluctantly. So the Yankee Group's second error was to concentrate on static Strengths, which are the results of past performance, rather than analysing the factors which will govern performance in the future. Even IBM's massively higher R&D spending was irrelevant in this context - the quantum of expenditure was less important than the uses to which its results were being put. The Yankee research consequently missed the low rate of conversion of R&D into saleable products - clearly shown, for example, by the strange RISC saga.
IBM's discovery of Reduced Instruction Set Computing, primarily the work of a technologist named John Cooke, was potentially a big winner, since it much enhances the performance of smaller computers. IBM, though, didn't use its own discovery in a work-station until 1990 - three years after Sun Microsystems and twice as long after RISC's availability. How could such absurdity be allowed? The explanation is that RISC was resisted by people who were dedicated to extending the 360-370 mainframe architecture. That's a perfect (or imperfect) example of how Strength turns into Weakness. Exactly the same mindset also allowed Compaq to seize the advantage, and a market share of nearly one third. in client-servers, powerful PCs which serve networks.
The resilience which IBM's rivals have shown, compared to their opponent's fateful conservatism, rests on people. In any industry today, the brighest and best employees are aware that their own SWOT analysis could lead to breakaway. They could stay with the company and develop their ideas within its embrace. But fragmented markets and booming stock prices, coupled with increasingly plentiful venture capital, offer a constant temptation.
Keeping people one by one, buying them off, so to speak, is no solution. The company has to create a culture that's so attractive, so hard to leave, that the retention rate will remain very high. In other words, Putting People First has to be the base strategy. An unhappy workforce is both a Weakness and a Threat - as British Airways has recently found. Its resurgence was founded on a programme actually called Putting People First - but, after a pilots' strike threat last year, in late June cabin crew and ground staff were equally alienated.
Look at what Fortune magazine calls the 'four-pronged approach' adopted by chief executive Bob Ayling, and the missing element is immediately obvious:
1. Develop a marketing plan with universal appeal 2. Help employees understand the company's global vision 3. Benchmark off mistakes that others have made in the past4. Select the right partners for joint ventures overseas.
MISSION STATEMENTThe wording of the only reference to people is curious. So long as they 'understand' that BA wants to be seen as a global airline, not a national carrier, that's fine. But consider this quotation: 'At a recent employee gathering in New York, none of the 75 people in the audience could remember the company's... mission statement' - which was only a single sentence. To put it mildly, there's not much point in a mission that everybody has forgotten.
The massive facelift on which BA is engaged went down well with the same audience ('there were audible oohs and ahs when images of the new planes and tocket jackets flashed up on a big screen.') The author's conclusion was that; 'If you give somebody a product they can be proud of and tell them why it's changing, you stand a good chance of helping them sell it better.' That is far from the truth. There are some key questions that need to be answered:
1. Have the people helped to create the new product? 2. Did they contribute to the thought processes that led to change?3. Are they constructively involved in deciding how to sell the product better?
The answers at BA appear to be negative. One report accuses Ayling of being someone who 'may not have grasped the finer points of dealing with real people, as opposed to numbers on a page.' The curious issue here, though, is that BA has confronted similar problems before. Some of its managers have learned the powerful lesson that change accomplished through people is far more effective than change forced upon them. In the last 1980s, the troubles with its engineering division became so acute that management was forced to take a strike, keeping the airline going with white-collar labour, until the unions capitulated.
Alastair Cumming, the manager in charge, concluded that 'very determined management' could only go so far. Unless the employees could be positively involved and their willing support obtained, further progress would be impossible. The results of changing the management culture - from order and obey to cooperation - were spectacular. Cumming sold off its engineering overhaul business to GE, cut staff numbers by 500, and took £38 million out of costs in the first year - without any dispute. Once improvement had become the shared objective, and the necessary tools had been provided, examples soon abounded of employees taking the initiative in raising quality and reducing cost.
The BA engineering exercise rubs in the point that the SWOT exercise needs to be in two parts: internal and external. The first category includes matters like R&D strengths, engineering know-how, the cash in the bank, and so on. But these are passive. The second category is what actively turns the physical assets into achievements in the external world. This was brought home to me forcefully by reading Ryuzaburo Kaku's account of how he devised the two plans - in 1972 and 1982 - which converted Canon into, first, a premier Japanese company and, second, the world technology leader that it is today.
INTERNAL DEFECTSThe process, according to Kaku's article in the July-August Harvard Business Review, began with a meeting at which the young Kaku argued that Canon's obvious weakness of the time (a cash shortage so severe that it couldn't pay dividends) resulted from internal defects: 'poor decision-making and bureaucratic organisation'. Given his chance, Kaku 'radically decentralised decision-making, redesigned the organisation' and 'poured resources into R&D'. As the fruits poured forth, Kaku developed his ideas on 'kyosei' or 'a spirit of cooperation'.
He describes kyosei as a five-stage journey, starting with economic survival. That's where the vast majority of companies stop - making reliable profits from strong market positions: just like IBM or BA, in other words. But Kaku argues that this stage is not enough - the company must move on to cooperation between management and labour. Salaries, bonuses and training are all involved in this process: 'The two sides are in the same boat...sharing the same fate'. Plainly, this is the stage where BA has fallen short. Instead of emulating his own engineering side's later enlightenment, Ayling is adopting the strong-arm methods of its former, unhappier days.
Even cooperation is still not enough - 'this stage of kyosei can become so inwardly focused that it does little to solve problems outside the company'. Kaku goes on to call for cooperation with both suppliers and customers and with communities. Suppliers, for instance, are 'provided with technical support and in turn deliver high-quality materials on time'. But even that's not enough. In this third stage, 'companies often focus so much on local and national problems that they neglect global problems' - which leads on to Kaku's next two stages, globalism and partnership with governments.
Now, for most businesses these two stages seem infinitely remote - though globalism, thanks partly to the Internet, is a rising force in many markets today, and may well become decisive. But Kaku's five stages raise a crucial point: nothing is ever enough. No matter how great your Strengths, how limited your Weaknesses, how minimal the Threats and well-taken the Opportunities, there is always a next stage. The organisation must continually challenge itself and move onwards and upwards. An encouraging internal and external SWOT analysis is simply a foundation - an encouragement to do better still, and then more.
Nevertheless, the foundations laid by Kaku, together with the principles of employee cooperation which he used, make an instructive guide and form a penetrating two-part questionnaire:
1. Have you formed a large overall ambition? (Canon's was to join the top ranks of global companies and move from cameras to all-round high-technology manufacturer). 2. Have you set aggressive, long-term performance targets for every part of the organisation? 3. Have you got the right set-up? (Canon formed a matrix with three main product lines as vertical pillars, linked by three horizontal activities - manufacturing, marketing and R&D). 4. Are you investing heavily in all the horizontal activities?
Turn from Canon to BA, and the four questions would reveal similar foundation strengths, starting with the fact that it carries more passengers than any other airline. Its planned alliance with American Airlines should create a dominant force in an industry where BA already boasts the highest profitability. Its plans to cut costs and employment by radical reorganization, including the outsourcing or disposal of services, will add to the Strengths and ward off any Threats. But the whole edifice (including those plans) rests on the next four questions based on the Canon experience:
5. Have you eliminated all distinctions between different types of employee?6. Have you based excellent employee relations on investing in high salaries, extensive training programmes, generous vacations., etc? 7. Do you dislike and seek to avoid lay-offs, early retirements,etc.?8. Do you make it a prime objective never to engage in confrontation with your employees?
Here BA's answers are far less satisfactory. Yet the two parts, the strategic exploitation of commercial assets and the creation of a one-company, cooperative culture go hand-in-hand. You can see the fruits of Canon's two-part octet in a decade of growth in net profits by 20% annually, with sales rising at 9%, and the return on both sales and equity more than doubling. In copiers and desktop printers, its main products, too, Canon is world leader. To take today's abundant Opportunities in like style, against multiplying Threats, never forget that Strengths can become Weaknesses - but, equally important, Weakness can be turned into Strength.

Creative Skills

Everyone knows that instant judgment is the enemy of creative thinking. That is the whole basis of traditional brainstorming - which does work but is a very weak method. You suspend judgment. You withhold judgment. You delay judgment. This is useful but it is not good enough. We need to develop a whole range of other modes of judgment. A key aspect of creative thinking is the ability to identify and extract concepts. Once you can extract concepts, then you can challenge and change the concepts. You can also find new ways of delivering the same concept. Creative skill includes the ability to notice changes. What is different here? There may be a shift of values or operations. It is not only the obvious changes that need to be noticed but also the smaller ones, which might be just as significant in the long run. There might be changes in what is proposed but also in the reaction of people to the proposed changes. One small change at one point can lead to many changes, some bigger, at other points. Looking for changes is more than just looking at consequences. What does this lead to? This refers not just to time and events, but also to thinking and the development of ideas. If we make this change, what might follow in our thinking? These are just some of the basic creative thinking skills. There are many others which might be variations of the above or totally different. Random Input is a serious creative tool. It is one of the basic tools of 'lateral thinking'. 1. You define clearly your focus. Where and why do you want new creative ideas? 2. You obtain a Random Word. 3. You use the chosen Random Word to stimulate new ideas for the defined focus. If you start from the periphery, you can open up paths you would never open up from the centre. The Random Word drops you at the periphery. As you think your way back to the focus, you open up new ideas. You should not just seek some sort of connection between the Random Word and the focus. This does not have any stimulating effect at all. The task is not to connect the two, but to use the Random Word for stimulation. Never, never say: 'I do not like that Random Word, I am going to get another one'. You need to force yourself to use the original Random Word. Otherwise you will simply be waiting for an easy connection and you will not stimulate any ideas at all.

Thinking CEO

FINCA International call for papers

FINCA International Call for Microfinance Papers
FINCA International Call for Microfinance Papers
To be presented at FINCA’s Research SymposiumFrom Field to Function: Harnessing Social Data to Empower Change
With programs in 21 countries throughout Latin America, Eurasia and Africa, FINCA’s geographic reach is among the widest of the leading microfinance networks. FINCA has a 22-year institutional history of serving the poor and has become a leader in microfinance services for post-conflict societies.
FINCA is also working to engage students and academics in the cause of microfinance. Through research and outreach activities FINCA hopes to cultivate the next generation of leaders dedicated to poverty alleviation, international development and microfinance.
As a component of this initiative, generously supported by the Templeton Foundation, students and young professionals are invited to submit research papers based on data sets gathered from FINCA’s client assessment field research.
To Apply: Please submit a one-page abstract no later than December 1, 2006, via email to Katie Torrington, Research Coordinator, at ktorrington@villagebanking.org. Participants should request data sets to be sent as needed via email. All documents must use 12 point, Times New Roman font with standard margins.
The one-page abstract must include:
the title of the research paper,
research questions,
hypothesis,
key issues to be addressed, and
the country and/or countries to be analyzed.
Research papers must be between 15-20 pages, double-spaced and include:
an executive summary,
10 or more outside citations,
an explanation of research methods,
findings,
conclusions, and
recommendations.
Students and young professionals are encouraged to take advantage of the unique opportunity to thoroughly analyze data gleaned from the field along with current microfinance literature to provide cutting-edge insights and present them directly to leading practitioners and fellow students.
Final papers should be submitted no later than January 15, 2007 , via the email address included in this text. Participants must be available to present their paper in person at the symposium in March. Upon submission, papers will be evaluated by an industry panel. Winners will be notified in early February 2007.
Monetary awards will be granted as follows for outstanding submissions: first place $1,000, second place $500 and third place $250. The winning papers will be featured at FINCA’s From Field to Function research symposium scheduled for late March.
Upon accepting his or her award, each winner will present their findings at the symposium. Presenters will also sit on a topical panel to be moderated by a recognized microfinance industry practitioner. Winning research papers may be published.
About FINCA International: The mission of FINCA International is to provide financial services to the world's lowest-income entrepreneurs so they can create jobs, build assets, and improve their standard of living. FINCA village banking programs provide small loans and technical support for the self-employed poor, helping them to work their own way out of poverty.
FINCA International1101 14 th Street, NWWashington , DC 20005202.682.1510www.villagebanking.org