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You Go Save Yourself!

In a PricewaterhouseCoopers (PwC) survey conducted in 2015 called “Align costs with business strategy”, 71% of CEOs globally plan to initiate a cost-reduction initiative in 2015.

Well, this does not come as a surprise as we have all been feeling a pinch here and there though not as hard as the last round of delayering and restructuring we have seen since the global financial crisis of 2007 to 2008. Is there any new value to be created in this day and age? Truly there seems to be a bit of room but many executives seem to taking a more conservative view.

While opening the subject matter of strategy with “cost reduction” would always have eyes rolling and have people reading for parachutes, we have to note that some of the greatest innovations in management perhaps is the philosophy that you can take both cost savings / cost mitigating measures while pursuing innovation to push or even build new value propositions.

In the same PwC study an equal amount (71%) of CEOs see the value in innovation capacity and more-so in the US at 76%. 61%-73% say that they are seeing an increase in both direct and indirect competitors and that there will be entrants both from traditional and new entrants. 47% to as much as 70% of CEOs see industry disruption coming from technologies and service provision. While “cost alignment” is often seen as Death Knells for employees, there still seems to be a lot of growth in the grey areas where the usual boundaries are blurred.

Please read on! It is not always as black and white as you may think.

There is a reason as to why strategists must align their costs with strategy. The dynamics of competition still remain to have the biggest effect on strategic development. As Michael Porter would say it: “Competitive Forces Shape Strategy”. It is a mistake however to believe that industry structure remains static with defined market segments and accurate valuations of transacting markets. Even within existing frameworks, there is a lot of room to move and the intensity of competition often determines the volatility of industry structures. The optimist would base their strategic decisions based on penetration or even an expansion of an existing market space. For the most part however, executives are too pessimistic and defensive. The latter will tend to have a myopic view of the industry and look more towards defending turf rather than exploiting existing and emergent demands. The end market is a moving target and shifts at greater rates of speed due to intensifying competition.

While some visionary corporate strategists would like to throw a curve-ball by disrupting market structures, the fact remains that we work with finite resources and that traditional structures cannot cope with the demands of an ever shifting competitive climate. The flip-side of disruptive innovation is that companies who cannot respond to these drastic shifts in industry structure would fall victim to more creative and nimble entrants. Strategy needs to be aligned with structure as well. A new captain who wants to steer a large vessel that chooses to remain in its course sometimes cannot steer fast enough to avoid collision with an iceberg especially when the rest of the crew is sailing through a fog. Strategies are only as good as the organisation’s capacity or capability to execute them. Leaders should not be in the business of selling pipe-dreams!

Companies must be “fit to cope” with change. The company functions very much like a human organism. Surely one who has too much fat around the belly would do better to lose some of the weight. The same goes with having a “cost consciousness” or more blatantly a “cost-conscience”! Perhaps a legacy of giving executives lavish allowances and car-plans could take a back seat to funding product and service experiments? Perhaps you can use your cost alignment measures to launching innovation pilots and investing in technologies that improve processes that have a positive impact on cost and ultimately result in a greater capacity to serve the customer.

The importance of aligning cost to strategy is equivalently weighed with execution. Economic considerations should always be weighed with every strategic decision. Financial decisions that you make today will affect your future and the organisation’s capacity to execute future strategies. Focusing on the numbers makes a lot of strategic sense! Proper fiscal alignment allows you the budgets to invest in your company’s capacity and invest in its people’s capabilities.

In the words of Alex Molinaroli, Chairman, President and CEO of Johnson Controls Inc.: “Companies are capability-driven today. End markets don’t mean as much as the capabilities you build.”

So the next time your CEO starts talking about cost-reduction, perhaps you could start looking at the statement as a step in the right direction instead of having to reach for the parachute or scrambling to the exit. “Cost alignment” could be taken more positively than negatively.

On a personal note, when someone tells you that you’ve gained a bit of weight around your waist, take it as an opportunity to change! Perhaps you would do better if you did! While I do agree that drastic dieting is overrated, the same could be said about companies! Smarter people would have you know that it is not as much about how much you eat but rather what you choose to eat. Budgets are the same! The company is like a living human organism. Cost-alignment is better said and received than cost-cutting! Amputation is never a pleasant operation! The negative reaction to “right-sizing” as a euphemism for “lay-offs” has caused way too much trauma that we cannot turn back. Perhaps saying “cost-alignment” is likened to “right-eating” then perhaps it all makes sense. In the end, eating right leads to better effectiveness and performance.This applies both the person and the organisation. So “Yes” be cost conscious and put the energy in the right places for performance!

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The Golden Tool

Originally published by Leaderonomics in The Star of Malaysia

Photo Courtesy of NYthroughlens
Photo Courtesy of NYthroughthelens.com

Inside an old dilapidated drawer on the top floor of an old brownstone in Clinton Hills, Brooklyn New York, you will find an old butter knife, The Proverbial “Golden Hammer” so bent and chipped out of shape that it is easy to surmise that it had a long and useful life, but we all have to move on… That was college when I cross-enrolled at Pratt which was heaven once you get in, but a nightmare when you get out of its gates. The same goes with Fordham in the Bronx. This was after all New York City in the 90s.

Pratt
Pratt Institute in Fall

The worn butter knife has been used to open cans, fix bicycles, threaten partners and open doors that had keys locked in. It was simply indispensable. I remember having to go into a roommate’s room with the butterknife in hand ready to change the channel of an old Black and White TV that had one of the dials fallen off, leaving a slot to which the butterknife fits right in and ready to twist with the slotted peg. Unfortunately, we sometimes become too attached to the “Golden Hammer” that seems to be the tool for everything.


hammer-and-nailsSo goes the adage: “If all you have was a hammer, everything looks like a nail”. It is too often said that it was quoted anywhere from Mark Twain, Baruch, Kaplan and Maslow. The behaviour is all too common with the story attached. “That if you had given a boy a hammer, then you will find that everything he encounters needs pounding”. Kaplan describes the behaviour under the “Law of the Instrument” and to which everybody calls “The Golden Hammer”.

There are a lot of Golden Hammers in the office where masses of mid-managers hold on to them for dear life. The point is that people and especially managers tend to get attached to tools that have always worked for them. It could only be described as an over-attachment to something that they always use. The common impression among most maturing managers is that they seem to have a “template approach” to everything! The same goes for consultants that tend to marry a distinct set of analytical frameworks. It becomes too inbred, thereby limiting their usefulness. They seem to think their tools offer the solution to everything. Much to the peril of the organisation, being stuck on a particular mindset could lead to strategic blindspots that spell their demise.

Similarly, managers could also suffer from “doing their jobs really well.” It is here where we need to point out that: “Knowing your job is completely different from knowing the business”. Managers need to move from the functional domain, to the strategic domain. It pays to see the bigger picture, lest you retire to be the master of your cubicle.

The line that defines the difference between what makes a great manager and an awesome leader is that one knows what needs to get done as opposed to being stuck on “how we usually do it”. The old line that says: “Don’t fix it when it ain’t broke” usually does not apply in business. Competition is always looking for better ways to do things even if they are not broken. The “new-way” could be their next breakthrough.

The same goes with your career. You do not want to give an impression that you are that old dog that cannot be taught new tricks. When you’re not scoring points during an interview because you’re seen as knowing too much that you’ve become unyielding, then you can’t get that new job. Once your bosses see you as being too comfortable or too good at what you do, then chances are you might get passed over as well. If this sounds like your situation, then I strongly suggest that you find a mentor right now.

A mentor could give you the right perspective from the vantage point of someone who’s in place where you want to be. That perspective can make you see the bigger picture which isn’t often visible from where you are. Use this vantage point to map-out and strategise your career. A mentor teaches you more about the business rather than just letting you know how to do a job.

It often takes more than what you have to execute a successful strategy. Sometimes it takes more than the tools that you have to make things work. This is where strategic partnerships come to play. These partnerships could be found within and outside an industry, and they can also be found at functional levels across divisions and departments within your organisation as Cross Functional Teams (CFT).

A strategic leader recognises a need for a larger perspective to get all the angles of a situation. It often necessitates going beyond the realms of an organisation’s internal resources when greater collaboration is needed to deliver strategic results.

An ancient Proverb goes: “For by wise guidance you can wage your war, and in abundance of counsellors there is victory.” It goes further in saying: “Plans fail for lack of counsel, but with many advisers they succeed.”

Surely, a “big picture” perspective can be used to gain an advantage over competition. The annals of warfare and business prove it over and over again. Perspective spells the difference between winning and losing. This applies to your career, your business or even the entire industry and beyond.

Just as much as I still reach for a butterknife when I can’t find the screwdriver, we must learn how to leave the dependence on the “Golden Hammer” behind. Do not succumb to the Law of The Instrument. Find the right tools for the right situations even when they are beyond your usual reach. Find a mentor, gain a perspective from others; See the bigger picture and create a strategy for yourself and your business. It’s a long way from here to Brooklyn but I wouldn’t have gone this far without asking for directions and picking up some tools for the journey.

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A Special Forces Officer Teaches You 5 Secrets to Overcoming Adversity

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Creative ignition: A recap of the fiery talks in Session 10 of TED2015

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Success…… Vision or Delusion?

A New Beginning

“When your life flashes before your eyes, make sure you’ve got plenty to watch, be it vision or delusion.”

Anonymous

                                                                                                                                                                                                                                

 Success is such an empowering word. We think of it and we think of…. Happiness….Self esteem….Superiority…..  facets which enthuse, inspire, pump the adrenalin. Success seems to be   what we live for. What our parents and teachers always exhorted us to do. Scholastically, materialistically, competitively. Success brings forth visions of wealth, power, intelligence and with these the ability to control the outcome of events. All those external trappings. What the world judges us by.

But as I think of success, I also see within it the other paradigm. Of increased self awareness and self development. Of a positive intention and an alignment with a higher purpose. Of that mysterious inner process which ensures personal integrity and a commitment to values. The aspect of success as exemplified by Mahatma…

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How to Motivate People: 4 Steps Backed by Science

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Getting Over the “Yellow Fever”

As I now seeing others scraping off their yellow ribbons from their cars, I was reminded of this old article I wrote back in 2013!

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Why you should make your executives sweat

I agree completely!

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Five Financial New Year’s Resolutions for 2015

Great simple tips for your Financial KRA in 2015

Financial Engines

Happy New Year Hanging Baubles Blue Bokeh Beautiful 3D

With a new year comes the promise of big changes, and one of the most common resolutions is to save more. But big changes start with small decisions.

Here are five ways you can create good financial habits in 2015:

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Releasing the Kraken of Cracklings and Why Bai’s Boneless Lechon Belly is Worth Writing Home About

Craving for Bai’s Lechon Belly. Well maybe this weekend?

John Walter Bay

IMG_4290Reeling in from the holidays where the obvious gain in girth remain as evidence, one has to say that some calories were worth more time than others. Christmas is the longest holiday in the Philippines starting off in September and ending with the celebration of 3-Kings in January. There’s just too much indulgence with comfort food that we could actually remain comfortable with.

In extreme cases over the holidays, I shared the table with an old friend who I noted was staying away from the usual indulgence of food and alcohol only to reveal that he had a mild stroke a few weeks prior. Our appetite for food which is amplified along the spirit of festivities could definitely lead us to our end. However this plethora of rich food also brings with it a certain amount of distaste for it. Filipino food during the holidays seem to be biased towards…

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