Freelance Consultant's Diary

Since I was disappointed that there were not enough bloggers on business topics, my post ( Business bloggers wanted ) drew some interesting (and many) emails to me.  I am not sure if it had any thing to do with the fact that the bloggers were in the spotlight at the Boston convention (where not only did they receive press credentials, their reports were highly appreciated for their frankness), but one consistent theme that I heard from those who wrote was that they believe blogs are for the techies and they don't know how to get started.  I agree because it took me a while to make iProceed blog happen.  I went through several frustrating days of work before I could integrate Blogger and my server. I remember that even in 1999-2000 I had colleagues who would write down their email content on a yellow pad and then an EA would type it out and email it.  When the reply came, she would print it and then my colleague (a very senior level executive) would mark his comments on the printout

I didn't realize that I would be forced to write about another depressing economic report.  After discussing yesterday, how the gross tax receipts continue to decline due to continued drop in average income of Americans , there is more data this morning to support that American consumers continue to struggle as I had argued in my article on Impact of offshoring on American economy .  Here is what the GDP chart looks like: If we take out the 3Q03 data (which saw a jump due to increase in government spending due to Operation Iraqi Freedom), we are still looking at an improvement since the dismal numbers from 2001 and 2002, but nothing like the 90s and simply not enough to generate a robust growth in economy and jobs.  Here are some additional conclusions from the Department of Commerce data: The deceleration in real GDP growth in the second quarter primarily reflected a sharp deceleration in personal consumption expenditures and a deceleration in private inventory investment that wer

According to recently released data by the IRS, after adjusting for inflation, the income of all Americans fell over 9% from 2000 to 2002, the first time that has effectively happened since the modern tax system was introduced during World War II.  Other conclusions from the IRS data are: Individual income taxes fell 19%, more than three times the decline in adjusted gross incomes. Falling incomes, rather than tax cuts, appear to account for the greatest share of the decline in income taxes paid. During the same two years the number of Americans reporting no income or that they actually lost money for tax purposes exploded, growing 48%, to 1.7 million in 2002. Those who reported negative incomes in 2002 reported being $65.6 billion in the hole for that year, 12% worse than in 2000. Below is a chart that shows how our tax receipts have been declining (mostly due to lower average incomes): These are very sobering statistics and I had argued in an article on the impact of offshoring on Am

I have been an early adopter of VOIP and have been generally satisfied with the Vonage package that I embraced a little less than a year ago.  It has turned out to be much cheaper than AT&T, particularly for international calls.  However, I have not yet said goodbye to AT&T (and I still continue to pay about $10 a month to AT&T just to be able to make long-distance phone calls), because VOIP is not 100% reliable yet.  International calls don't always go through when I want and the sound quality is not good enough to make a business call. Vonage appears to be the leader among the VOIP companies, but believe it or not, it has just 215,000 active lines after being in business since January 2001.  Other companies in this space are far behind. Why is paid VOIP telephony doomed? If you speak to any telecom company, they might not see any threat from VOIP, but that is because it is best to downplay any such threats.  In fact, during next one to two years, while adoption rates

A range of reports (from Nielsen Media and Research, Jupiter Research, Ipsos-Insight, comScore Media Matrix, Veronis Suhler Stevenson, TNS Media Intelligence/CMR, and PricewaterhouseCoopers) analyzed by Frank Rose point to some interesting (and disturbing for advertisers) trends in the 18-34 male segment: Continued shift from television to other entertainment outlets (particularly video games and the Internet) Going online and watching TV are equally popular in this segment for the first time The group is gravitating towards adult stuff, music, auctions, sports and consumer electronics retail What does it mean for businesses and their advertising programs? Good news:   As I analyzed in Developing a search engine advertising strategy , it is far cheaper to advertise on the Internet and such advertising can be more targeted.  Plus, you only pay for performance.  Television advertising, which was already quite expensive, continues to become even more expensive.  It would have been fine if

Here's the good news:  Around June 2003, there were approximately 100,000 blogs.  This morning when I checked at Technorati, they are tracking over 3.2 million blogs.  That is a remarkable growth rate. What's the bad news:  Not enough business blogs.  I looked at the list of top twenty blogs and while they are all very interesting blogs, none of them talks of business.  Many of them might touch upon some business issues as part of discussion of technology or media (or even politics), it will be great to see more blogs related to business.  I have conducted a search for blogs related to business, marketing, strategy, etc. and have essentially come up with only a handful of blogs.  I was expecting a lot more professors and business school students to have their own blogs but I am somewhat disappointed that they have been so slow in embracing blogging as a tool to engage in meaningful discussions. What can blogs do to the business world? One aspect of the business world that frus

The boom of the nineties was driven largely by IT and related industries (though there were significant achievements in many areas including life sciences, biotech, nano-technology, pharmaceuticals, etc.).  Experts are now arguing that the next driver of American economic growth is going to be biotech.  Let me discuss why it might not turn out to be so. Before we go any further, let us review why the IT boom in the US fizzled out (Recommended link:  Does IT matter? ).  In my opinion it was simply because of cost reductions in: Hardware Software Bandwidth So with these major changes, it didn't matter where your IT folks were.  As long as they are connected to the Web, they could be anywhere.  "Telecommuting from literally anywhere on the planet". This radical change in our economic and information system caught almost everyone by surprise, even countries like India, since no one expected the scale and speed.  In fact it was not something that was driven by Indian companies

Apple launched its iPod Mini  players in Japan and the excitement it created among the die-hard Apple fans in Japan was similar to what you will find for a Harry Potter book here in America.  Since the day I first went to Japan in September 1992, I have been amazed by the presence of Apple " otaku " (loosely translated as "maniacs") in Japan and their number does not seem to go down.    When it comes to latest electronics gadgets, we are centuries behind Japan.  In fact when we think that we are doing good, it is because we are ignorant.  Some of the coolest Japanese electronic products are never marketed in the US (in the words of a Japanese electronics marketing manager, "America is not a very attractive market for cutting edge electronics products.  Americans don't love technology the way we do.  They spend more time in Home Depot than in an electronics store.") simply because we do not incorporate technology in our lives as fast as the Japanese do.

It seems that investors and other stakeholders in public  companies are now realizing that companies need to do a much better job at risk management.  A major reason for change in attitude is driven by a series of scandals (which also led to the enactment of a series of reforms in corporate governance laws as part of Sarbanes-Oxley Act), but more importantly, it is becoming obvious to analysts that no matter how much a company denies the realities, irresponsible behavior and poor risk management can hurt the firm and the shareholder.  This is particularly true when it comes to the cost to society either in form of damage to the environment or other social impact. A report by Innovest Group has found that a vast majority of fund managers and analysts across Europe firmly believe that firms that manage social and environmental risk better will create higher shareholder value.  In another study by the same company, they found that a company's strategic response to environmental risk p

A question that I often get asked by entrepreneurs or those inclined towards entrepreneurship is, "How to secure venture capital for my business?"  I always tell these people that approaching venture capital firms is something that you should consider if you are trying to build a business that is significantly large.  Venture capital firms typically do not get interested in startups that do not have the potential to generate at least $100 million in revenue at some point in time.  For smaller businesses, there are other options, e.g. angel investors, friends/family, banks, Small Business Administration, etc. Finding venture capital firms If you think that when you need venture capital, all you have to do is to contact one of the partners at a venture capital firm, email a copy of your business plan, and you will be asked to come make a presentation, you are living in a dream world.  In fact partners at venture capital firms get spammed with business plans and wherever they g

"Work hard for less pay."  That seems to be the message from a series of events that unfolded today.  Let us review: DaimlerChrysler workers agreed to implement a 40-hour week for some jobs and cut paid break time to secure 6,000 jobs in Germany in a deal that will save $600 million a year. Thomas Cook workers agreed to raise their weekly working hours to 40 from 38.5 for one year.  The employees also agreed to delay a pay rise by 18 months. Workers at a Robert Bosch car parts factory (in France) voted to lengthen their working hours to save jobs, making them the first employees to vote to scrap France's 35-hour week. This reminds me of the time when Japan was trying to recover from the collapse of the bubble economy.  As labor became increasingly expensive and major Japanese corporations evaluated if they should stay in Japan or move to China to save their companies from extinction, they often tried to come up with employee-friendly solutions (e.g. pay cuts, elimination

I often run into serious technologists - folks who live, breathe, and think technology all the time. Those who either push the frontiers of technology or play with existing technologies to come up with an innovative application. What I also realize is that many of them are absolutely clueless about how the business world works. It is indeed true that many technologists have become filthy rich, but at the same time, there are countless stories of technologists who got nothing more than a pat on the back from the management (and a citation on the patent) from their remarkable achievements that created millions or billions for their employer. It is perfectly fair for a corporation to own all the technologies that its employees develop (after all the company provided all the infrastructure and intellectual capital to make it happen) but a technologist can really exploit the potential of a technology that she or he independently develops. Corporations of all sizes are constantly seeking new

I read an article on the banking sector (and how it has changed with the introduction of ATM) but what really caught my eye was the claim by Fortune write Ellen Florian, "(The ATM) never reduced the number of tellers or filled the demand for bank branches - something the machine's pioneers had promised.  According to the FDIC's count, there are close to 75,000 branches today, up from 58,000 in 1985.  Tellers number 539,000 vs. the 484,000 in 1985 - though many of them now also function as retailers, cross-selling IRAs and mortgages to customers who come in with a big deposit.  And that is something human beings still do better than any machine..." I was very impressed with the statistics because it supports my hypothesis that only business model transformation will protect American economy against technological shifts and offshoring.  So I thought of doing an article on the subject to show that what has happened in the banking sector might very well happen to other se

The school officials in Saugus, MA, due to budgetary constraints recently eliminated all non-academic programs. Jeff Jacoby, a columnist for The Boston Globe writes, "Whatever the merits of team sports or cheerleading, they are not essential to a high school education. Math and English are." I only agree with the second part. Yes, Math and language are somewhat important but not the only important things.  If we look at the performance of American students in Math, we don't do a great job teaching Math to our kids. In international competitions our students often rank lower than students from smaller/poorer countries.  But why does America continues to lead in so many other areas? Because we have traditionally provided a more wholesome education to our students. Romania, Bulgaria, Russia, India, China, and many other countries provide excellent education in Math but the lack of a wholesome education means that their students do not turn into as many business leaders or en

Nielsen/NetRatings is reporting that demand for search advertising is growing faster than search engines can meet it.  Wow.  What a great time to be a Google or Yahoo.  The reason is simple:  What those analysts predicted during the boom years is coming true, though just a few years later than they predicted.  We are surfing the Net not just to read emails or chat with friends.  We are basically searching .  Take a look at the chart below showing the growth in search sessions during last 12 months.  I think this trend has many serious implications for advertisers and I have tried to address some of these in my article:  Search engine advertising strategy:  How to respond to new challenges ?

While the cost of drug development in the United States continues to grow, sector participants face other serious regulatory, pricing, and competitive threats.  What that means is that the pharma/biotech sector is seeking opportunities for outsourcing some of the business processes (particularly the more expensive ones like analysis and testing).  But before we discuss what strategic growth opportunities are available, let us review some of the facts about the sector:   Cost of bringing a drug to market from concept stage is approximately $800 million (according to PhRMA) and can take 10-15 years.  Tufts Center for Study of Drug Development puts this number at approximately $900 million while Bain & Co. estimates it to be $1.7 billion (this number includes marketing costs as well). Out of as many as 5,000 drugs tested, only about 5 reach the clinical trial stage, and typically just one is approved by the FDA. Only three out of ten marketed drugs produce revenues that match or excee

Creative design was one area where I was convinced that computers will have a difficult time replacing human beings.  In fact, it is common knowledge that creative artists and designers can charge thousands of dollars (sometimes hundreds of thousands or more) for design of company logos.   What if design can be automated?   I was recently introduced to a company called LogoYes (Disclosure: I have no affiliation with the firm) that has automated the process of logo design.  I would strongly encourage you to check out their system (what I love even more is that you can play with the software as long as you like and no one forces you to sign up).  The choices for a logo are literally in millions and the price (as of 07/18/2004) is only $150 or so.  And mind you these are not templates.  You actually create a unique design that represents your brand.  And if you know even a little bit of photo editing, you can make some minor adjustments on your own to make it even more unique.   I agree

As part of my Ask-Jay series , this is the question I received Friday, "I am an IT consultant and I am in my office only when I am lucky.  I am on the road literally five days a week.  I realize that I work harder when I am traveling, but what is worse, I am so stressed out when I am away from home (separated from my lovely wife and a 2-year old daughter).  Do you have any tips on relaxation for a professional like me?"   I know exactly how it is for a consultant, being a management consultant myself.  Since there is no 'home' to go to after work and with laptops being with us all the time, when we do come back to our hotel rooms, we inevitably try to get some more work done even after the business day is over.  So gone are the days when an executive will go for a drink in the hotel bar or hang out in the pool or just watch television.    Here is what I would recommend:   (1) Pick a hotel that has a health club or spa on the premises.  Ask your client to recommend one

Following my commentary on how consumers are increasingly getting turned off by "too-much" advertising and your advertising strategy might need to change , my attention has now been drawn to a study conducted by BURST! Media .    Here are a few key messages from the study:   Low Tolerance for Clutter:    60% do not want more than two ad units per page.  Ouch!   Brand Favorability at Risk: 50% have a less favorable opinion of an advertiser’s product or service when their advertising appears on a web page they perceive as cluttered.  This will call for complete redesign of billions of webpages and the programs that manage them.   Perceived Clutter Causes Site Abandonment: More than one-third say they immediately leave a site if it appears cluttered.  No wonder the click-through rates for banners is close to zero and for text ads less than 5%.   Message Effectiveness Deteriorates: Fully three-quarters who remain on a site they perceive to be cluttered say they pay less attent

As you probably know, key account management using sophisticated tools is still a pretty new concept.  I recall working with a $100 MM plus company (with several accounts valued over $1 MM) where they used an Excel spreadsheet for key account management.  Prior to the Monday morning meeting of the salesforce, I would see a couple of vice presidents (and their assistants) running around trying to call everyone in the field to come up with their information so that one person could enter all the data.  Let me tell you it was a nightmare and not the way to run things.  But looks like interest in key account management is rapidly growing.  In fact, since I wrote about the value of key account management strategies for firms of all sizes, but particularly for small and mid-size firms, I have been flooded with requests for my recommendations on what technology platforms to pursue.   Here are the four that I like and my opinion of each.  It does not mean that you should not do your homework o

A discussion is underway at Fast Company by Gary Williams on Code of Conduct , particularly for employees of multi-national corporations.   Before I comment further, I think there is something else that has gone wrong with the relationship between an employer and employee.  The employer has demonstrated (through actions) that the relationship exists as long as it is in the best interest of the employer.  While I am a big proponent of shareholder value creation , but I also advocate treating your employees right and literally spoiling the best performers .  No wonder we now see all kinds of ugly behavior on part of the employees who are less concerned about their current employer but thinking more about their own self-interest.   How do you know where to draw the line?   As some are likely to respond, I don't think that rules, policies, agreements, and threats of legal action is the solution.  On the other hand, employees need to be trusted and the employer-employee bond strengthe

RFID, nano-technology, VoIP, wireless networking, robotics, and many others. These technologies belong to a group that one hears about for years before getting a chance to use them. I remember how long I had to listen to the conversations in the business world about VoIP (I am a daily user now) and wireless networking (my home is now fully networked wirelessly). I have already checked out the Aibo (that I intend to buy one of these days) and then I also plan to buy one of those robots that mow your lawn. Well, after listening about RFID for a lifetime, the technology is now here. But as a business leader, what are you doing? Have you spent some time thinking about what kinds of strategic growth opportunities might emerge for you? Or how can you incorporate RFID in your business processes to bring down the cost of logistics and eliminate "shrinkage"? Recommended link: How to develop your RFID strategy?

Apart from the $8 billion that I had highlighted in the article " Business Opportunities in Homeland Security ", Accenture is now reporting that it has been awarded the work to implement the US-VISIT program being implemented by the Department of Homeland Security. This is an additional expense by the federal government. While it is not clear what the total value of this project is, other reports indicate that as much as $15 billion will be spent on the "Virtual Borders" initiative this year. This specific project will be supervised by Accenture which leads the Smart Border Alliance that includes other companies like Raytheon, The Titan Corporation, and SRA International, Inc. While The Smart Border Alliance, whose member companies employ more than 330,000 people in the United States, should be able to do a lot of the work on its own, but I will expect that a lot of the work will be farmed out to contractors and other business partners. So if you have capabilities

Yankelovich Partners is reporting that over 60% of consumers absolutely hate advertising. As a consumer, I am also a member of that gang. There is just too much of it. And the more advertising there is, the smarter we become in tuning ourselves out. What can be done to your advertising strategy? (1) Be creative. Advertising doesn't always have to be advertising. It can be entertainment, education, and the money can be given away as gifts. Let us say that you spend $1 MM a year on advertising and as a result you get 10,000 new customers, making the acquisition cost of a customer to be $100. Pretty common for many businesses. What if you could screen your target customers and then invite just 5,000 for a gala at a hotel (music, dancing, meals, etc.). Now chances are that not only the sign up rate for this group will be significantly high, they will also become, what I call, your salespeople (working for free). If you can teach me how to use a new software (think Adobe) or

BNET tracks what business leaders are interested in, based on the activity on its website.  While this may not be the definitive indicator of business interest, I still found it fascinating because it shows that the highest level of interest was in strategy (maybe BNET simply attracts more of the strategy types or the strategy types just read more).  There are a couple of other interesting observations that I would like to make based on BNET findings and the tremendous success of iProceed's efforts to bring strategy to every business . While there is tremendous interest in strategy, it is mostly confined to analysis, strategic planning process, and management tools.  There is virtually no interest in competitive strategy , which I consider far more important. There is significantly lower interest in finance and leadership, both of which are so intimately linked to creating high value companies . Human resources was second in importance, just below strategy.  Wow, that

Google has been testing its local search for a while while Overture has recently launched its own version.  Overture actually claims half-a-mile radius vs. Google's 20-mile radius.  Good news for micro-businesses but I see tremendous new growth opportunities for small businesses if you can just find innovative ways to exploit this.  When a large portion of search will become local, you want to make sure that you are also found in those searches.  Here are some possible ideas: When Laconia, NH holds its motorcycle rally, local businesses have a difficult time fulfilling demand for all kinds of products and services.  If you are a regional car rental company with no offices in Laconia, how about creating a creative marketing campaign to attract all those renters who would be interested in car rentals while visiting Laconia? When international visitors descend in a small town in upstate New York for a conference organized by a local university, what can you market to the

Lee Smith writes in Wired about Dubai, the "Tech Mecca". He quotes O.B.Sulaiman, CEO of Internet City, one of Dubai's industrial "free zones" as saying, "The goal is to have 5 million knowledge workers by 2010." Internet City is the biggest IT complex in the Middle East and with its location provides perfect opportunity to have employees work round the clock (and probably take some pressure off Indian workers who literally work all night). But this is not what makes me write this post. What I have seen during last 10 years is that while we have gradually transitioned to where we are today, the rest of the world doesn't have to do it. I remember what a big deal it was to have a cell phone just a few years ago. Many people in Asia made their first phone call on a sleek cell phone. Or in other words, knowledge workers will now be everywhere, not just in Silicon Valley or Boston. Recommended link: End of "knowledge economy"; birth of

The book The Four Agreements by Don Miguel Ruiz is not a business book but when I first read it more than three years ago, I was simply mesmerized by the simplicity of the message. I asked myself, "Why do we make our life so complex when it really is so simple?", and I was actually thinking of our lives in the professional world. The application of Ruiz's ideas to professional life come from an excellent article by Mary Bartlett reprinted at Good Morning Thinkers . I particularly like the part about not assuming anything: so many times are we proven wrong but we still continue to let our biases color our thinking. Some of us do not want to change our thinking even when we are presented with facts. An excellent book for anyone wanting to simplify... Recommended link: Simple business models

Red Herring has crunched some more numbers and it finds that "But as the IT sector adjusts to more limited growth prospects, management will be looking, again, at savings and the prospects for squeezing more margin out of every dollar of revenue. Welcome to reality, not to the euphoria of 1999." Ouch...I found the same when I crunched slightly different indicators in June 2004.

Laura Rich of Inc Magazine is quoting the Wall Street Journal "Small Business Report" to tell us, "Small businesses are more likely to be rocked by market dynamics than their larger brethren". Absolutely. Small businesses lack: 1. Capital 2. Human resources (not just warm bodies, but employees that matter ) 3. Strategy While it is difficult to make capital as easily accessible to small businesses as large firms, we at iProceed have learned that there are at least two areas that they can do better at: 1. Hire some good people rather than just friends and family. If you have to pay a ton of money to get that one smart guy, pay it. It is well worth the money. 2. Invest some resources into thinking about your strategy. Don't just go with the flow. Think it through.

Gary Williams, the author of The 5 Paths to Persuasion: The Art of Selling Your Message asks in his post on Fast Company Now: 1. Who is your favorite Executive in today's business world? Warren Buffet, of course. 2. What decision style are they? Leave the business executives alone. They know better how to run their business. So in Williams' characterization, Buffet is a 'charismatic'. 3. Why would you want to work for them? He is great at providing high-level vision and insight. Then you are on your own to go implement it. I like that. Recommended link: Finding people that matter to your business

Business maybe war but if you make war as a part of your business, you are in deep trouble. Yes, you will have competitors, and some nasty ones that would rather see you gone, but to base your business model on fighting a never-ending war, you might not create tremendous shareholder value and will keep your employees distracted from what they should be focusing on: making customers happy . So to develop your competitive strategy as part of your business model, read more about the five iProceed Principles of Competitive Strategy .

When it comes to online marketing, affiliate marketing has become become one of the three most important channels right now; the other two being search and email marketing. I personally like the idea of people selling for you with literally zero fixed costs. My first preference is, of course, to develop a brand that either it sells itself (Harley Davidson or Disney) or existing customers recruit new customers for you(sometimes also called viral marketing; everyone I know I want them to sign up with Vonage because then I can call them for free no matter where in the world they are). So, are you a business that has not yet looked at affiliate marketing programs as a vehicle to drive growth? You might have missed some opportunities but the good news is that the programs are better developed now, there are serious affiliate partenrs available, and the third-parties are solid companies (LinkShare, ValueClick, etc.). Affiliate marketing should be thought of as a totally new channel and ma

In their book Angel Customers and Demon Customers: Discover Which is Which and Turbo-Charge Your Stock and in a Fortune article in which they blow up their own horns (authors' words), Selden and Colvin talk about the importance of treating customers well. I also agree with them when they say, "Sure, companies say they put their customers first. But only a few do." However there are several areas where I think that their conclusions may not be applicable when using their "5 Rules for Finding the Next Dell". Let us first take a look at their excellent list (which I doubt any expert will argue with): 1. Is the company looking for ways to take care of you? 2. Does the company know its customers well enough to differentiate them? 3. Is someone accountable for you as a customer? 4. Is the company managed for shareholder value? 5. Is the company testing new customer offers and learning from the results? These are great questions that I will ask whether I want

Remember those days when a multinational company was one with thousands of employees and millions of dollars in sales. In fact, there used to be folks called 'expatriates' (yours truly was one too in Japan working for a US multinational). Then came telecommuting. I could literally work on the beach as long as I could get things done. Some companies couldn't believe that we could actually get anything done without being together in one room, but now it is a part of life. Now come the micro-multinationals. I have come across dozens of entrepreneurs who work with employess/partners/contractors that they have never met before and might never do. They would not have been able to build these enterprises without being able to access knowledge in the most cost-effective manner. In fact, these employees are literally scattered all over the world. They find them on places Elance.com, there is competitive bidding and you have some serious global competition for even a $500 pro

I say so because in a business, employees are #2 in importance (customers being #1). In case, you are wondering what happened to the shareholders, they are #3. In answer to a query from a creative business leader, I am suggesting that she send all her star salespeople to a weekend at a spa . Let them bring their significant others with them. A couple of spa treatments, some healthy food, and when they come back Monday, not only will they feel appreciated, their morale will be high for a long time to come. It is not the value of the reward that matters most; it is the sense of appreciation that they feel. Happy employees are also more likely to result in happy customers , and therefore, higher shareholder value.

In a recent brief article by Patrick Di Justo published in Wired, he uses data provided by China Statistical Yearbook, National Science Foundation, and the UN. According to his findings, China ranks at the top in: 1. Exports of Telecom equipment (2002) 2. Export of Electronics (2002) 3. Export of Assembled computers (2002) 4. Number of engineering graduates (2001) Potential areas for China to grow: nano-technology, stem cell research, pharmaceuticals along with its continued dominance in manufactured goods. Wow, that means that apart from software, management services, and support services (which seem to be India's domains), China is well-positioned in some of the fastest growing business segments. If you are a business leader of a company of literally any size, China should be in your growth matrix. And finally, all the more reason to transform American economy into a " wisdom economy ".

If you are a privately held firm, depending on the ownership structure, only a handful of people need to know if there are any serious problems. Since everyone is sworn to secrcy, and it is generally in their best interest to be quiet, no one would ever know what happened. For a public company, it is different. Not only the shareholders but a whole range of institutions need to know if there are any problems, particularly with company financials. As a business leader (at whatever level) when should you go public. Many companies (Enron, Worldcom, etc.) got into trouble for not admitting the problems right away and working to fix them. In fact the leadership team engaged in coverups. Should the leadership be honest with the investor community? Should the press releases and investor presentations state the truth as they know it versus massaging the numbers to make them look better (without necessarily cooking the books). There are not many CEOs that I have seen who will stand up and

Robert Kraft, the CEO of The Kraft Group, (and a Harard Business School graduate) has three simple principles for hiring people that work for him: 1. Good moral character, loyal to the organization, and plenty of integrity 2. Great work ethic 3. Brain power (I believe that he means strong analytical skills and capacity to think outside the box) Ed Zander, CEO of Motorola, says that he always hires only the best. He prefers people who are better than him because eventually they make him look better. He also believes in having a succession plan and grooming his successor for each job that he has had. Paul Palandjian, President of International Real Estate Corp., says that he surrounds himself with extremely bright people. He says that he is never afraid of having people brighter than him working for him. He gives them the opportunities to grow and do their best and that is how he creates value for his enterprise.

Ed Zander, CEO of Motorola, and one of the people I admire, says that there are certain things that he just does not like in an organization. He promoted his philosophy at Sun and is now trying to do his best at Motorola. So what are these things that he does not like: 1. No well-defined strategy. You know what happens when you see a company being kicked around by its competitors. You just wonder what is going on in the heads of the executives. 2. Slow-moving. It always has been true and still is. If you are slow, you will be dead pretty soon. I have read that Meg Whitman of Ebay actually evaluates strategy as frequently as needed (several times a day in some cases). Now that is strategy. 3. Bureaucracy. No more comments. 4. Complexity of business models. I have always been a big advocate of simple and neat business models . 5. Silos within the organizations. I have worked with companies where two executives in the same department sitting next to each other wouldn't

As highlighted in the article Business opportunities in homeland security , it is important to note that a company need not be active today in homeland security to take part in some of the projects being funded by Department of Defense. Many of the projects being currently underway involve a myriad of technologies and solutions. So if you have a group of R&D folks, invite them for a half-day brainstorming session. Put up this list (courtesy: Department of Defense) and start to ask what can you do be involved in some of these exciting projects: Immunue buildings: This program will make military buildings (such as barracks, office buildings, and Command and Control centers) far less attractive targets for attack by airborne/aerosolized chemical or biological warfare agents (CWA, BWA), by modifying and augmenting building infrastructure to greatly reduce the effectiveness of any such attack. Spectral Sensing of Bio-Aerosols: Real-time, pre-exposure detection, discrimination, a

The Enron story once again reinforces the message that business leaders must always do the right thing. Shareholder value creation does not mean that unethical and illegal methods are acceptable even if you are never caught. Enron was a great company (despite the books being cooked) in many ways: 1. It provided some of the brightest people in the world a great place to work. 2. Enron developed several innovative products and powerful business models . 3. Enron made the world of commodities exciting by leveraging the tools of knowledge economy . What destroyed Enron was the lack of ethics on part of a just a handful of business leaders.

I am starting to question the leadership of America in the “knowledge economy”. We have now reached a point in time that the “knowledge economy” is global. While we should have welcomed it as good news (we were the ones to drive globalization in the first place), but I guess not many anticipated that the scale will be so grand and the speed so fast that it will catch us totally unprepared. While we continue to enjoy lower prices (a key goal of globalization), we are also faced with the prospect of American workers having to compete with better-educated (but less expensive) workers from many Third World countries. That is not only a political issue but also a social and economic issue that needs to be dealt with. So is it time for America to transform its economy into something else. I am proposing that we call it the “wisdom economy”. Let us not slow down the globalization of the knowledge economy but at the same time let us continue to transition to the “wisdom economy”. If not

Robert Kraft, the Chairman and CEO of The Kraft Group (more popularly known as the owners of the New England Patriots), recently said, “Winning can be addictive….Losing is a hangover.” I like the story that he told. When the Patriots win a game, Kraft always grabs a cup of coffee by lining up at a nearby coffee shop. When they lose, he buys his coffee in the drive-through. And when they lose really bad, he laughingly said, he makes it at home. As a business leader, you have to be passionate about winning. If you only think of your leadership role as a job and as a platform for preparation for your retirement, you are doing justice neither to yourself nor to the enterprise that you lead. (Related link: How to create high-value companies? ) There are several things that we all can learn from Kraft: the impact of treating right each employee of the company, regardless of the level in the organization (he cited the example of the guy who cuts the grass: one could look at him only as

I am often asked what a business can do to leverage the Internet for additional revenue. As we all know, e-commerce is for real. Both businesses and consumers are increasingly shopping online. The question is how do you motivate potential customers to shop online rather than researching online and then go buy it at the local store: 1. While companies have been able to sell a wide range of products online, a rule of thumb is that if they can find at a brick-and-mortar store, it is hard to sell it online even if the shipping is free. I would never buy lawn fertilizer online. I don’t mind an occasional trip to Home Depot. 2. Focus on those products that people cannot find in the brick-and-mortar world. For example rare products (books, movies, antiques, etc.), stuff not available in certain geographic areas (certain stores are just not there or malls are too far), things that are difficult to buy in a store (adult products, men buying personal gifts for their sweethearts, etc.), and

A lot of us have grown up reading text, whether as books, magazines, or newspapers, and now the web pages on the Internet (which for folks like us isn’t about downloading music/movies or playing games). That is why despite being so digital otherwise, I still prefer to look at my newspaper in the morning with a cup of coffee. However, young people are less into reading and more into listening and viewing (several metrics point to teenagers spending more time in front of a screen). I, therefore, believe that gradually most of the text will be replaced by video and audio. And therefore, a magazine on a CDROM/DVD is an alternative to many trade journals and business magazines that I read. Again this is a short-term opportunity till watching high-quality video on the Internet becomes as painless as reading text in a blog. In fact some Japanese magazines already insert CDROM/DVD into their magazines. This format allows them to make it more interactive, insert video clips and high-resolutio

Keystone Management Services in a straightforward study has established a correlation between how a company treats its employees and how they treat their customers. I have been saying this for the longest time: If you have even a not-so-exciting product but treat your employees right (who are eventually the ones that will implement your vision of treating your customers right), there wouldn't be much else for you to worry about. The employees will listen to the customers , and that will lead to better products ( the kind the customers want ; not the kind the R&D folks like to develop), higher sales, premium pricing, higher margins, and tremendous shareholder value . Sounds simple? It actually is and it works. And a lot of things that make it happen actually are either free or cost literally nothing . One of my clients, in trying to implement one of those creative ideas to cut costs, eliminated free coffee for the employees. For a billion dollar company, the total monthly

An owner of a single digit million dollar business asks, "What are some strategies to compete with large corporations? What can we do so that a customer would buy from a small business instead of large corporations?" For a whole range of products and services, I tell my clients, that it is not a bad idea to explore the option of buying from a small business. In nine out of ten cases, small businesses appreciate business from their customers and do their very best to retain them as customers (Related link: How to provide service that delights your customers every time ?). If the owner is a member of a minority community, they not only help the owner and employees of the company, it also helps them generate a lot of goodwill in the community. It is important to note, however, that apart from such reasons as access to capital, infrastructure, market share, etc., large corporations also have access to enormous amount of intellectual capital either through their own employees