Thursday, December 24, 2009

Shanghai Central - Innovation in the East

I'm returning from a week of consulting in Shanghai. Generally I spoke to audiences and presented information on Innovation Through Customer Insights. The central thesis of my work is that organizational change should be driven from the outside. Customers should drive it. There are two major benefits: firstly, it forces managers out of their political silos, and secondly, it engages employees because they love to work for their customers.

I have been to China before but never to Shanghai. It provides an interesting clash of traditional western thinking about government, human rights, and economics.

The first thing I noticed in Shanghai is that it is alive – there is commerce everywhere. It’s the first time in years that I have been awakened by the sounds of buildings being constructed.

Our western world is still struggling itself out of the tar pit of a deep recession. Capital is sitting on the sidelines afraid to get involved. In the west we seem to be looking for reasons not to do business. In Shanghai everyone is looking to do business. There is capital, lots of it, and it’s being used. One of the big oxymorons is all of the Christmas decorations. Christmas has no cultural significance in China except that it is a celebration and it makes money.

So it seems that we have the model for western recovery. Do what the 16,000,000 people in Shanghai are doing. Build the economy on capital. But isn’t that what we do? Well yes, but we have a different political structure – we have a democracy of free people while China has a central government that controls people.

Interesting contradiction. Haven’t we always been taught that democracy and capitalism are linked to produce prosperity that gives us freedom? That may be true, but at this moment that link has provided recession and no clear and fast answers. The trade-off seems to be our freedom. How much freedom would most people give up for a job? I can only pose that question, not answer it.

At least in Shanghai capitalism is being used to push forward prosperity. Money is being made and it is being poured into infrastructure that employs many of the unskilled. So it’s clear that democracy is not the sole garden that can grow capitalism. I think we have to adjust our paradigm. Central planning in China is not Stalinist Russia.

But what about this freedom thing? All of this concern about human rights. You know, those Tibetan monks. Well, I think it’s an issue.

China is governed by a handful of people, and one of the strongest is the mayor of Shanghai. When these people decide to do something it happens. It doesn’t need to go to a center of democracy to enter the gears of gridlock. It just happens – and it happens without criticism. When the Chairman speaks everyone listens in agreement. The governors may be human, but they are never wrong.

The central government in Beijing controls big infrastructure like transportation and communication. The state television channel puts out a constant stream of the glories of China. You can even learn about the Chairman’s daily agenda. The communication channels are controlled. If the leaders don’t want you to hear, you won’t. The Internet has strict controls. YouTube is seen as disruptive – so it’s not allowed. This sounds repressive, but I wonder if some of our politicians and parents wouldn’t want to give the system a pilot test.

The sense of restriction is quite real. I gained half a dozen close friendships in Shanghai. We ate traditional Chinese dinners every night. Yes, everything you’ve heard is true: chicken and duck feet; the spine of the lamb and the stomach of the cow; sea slugs and pig ears. When food is limited and the population is huge, you eat everything. I learned to appreciate vegetables.

However, my point is that I got to know friends during their sacred and almost religious act of eating. We never talked politics. I don’t talk politics State side either, but that’s because of fear of losing friends – not fear of having them sent to jail. On the odd moment when someone did say something approaching a criticism of government the table hushed them and scanned the restaurant to ensure the state police hadn’t overheard.

So, we can’t downplay freedom and we can’t downplay the fact that people know there are limits. People know the rules, and they know the consequences; and the consequences can be harsh. We may sympathize with the Tibetan monks, but inside China the sense is that they know the rules.

Well, what about the people. My experience is that they are some of the most kind, generous and welcoming people that I have ever met. Like everyone else in the world they are just trying to get through their day, but they do it with great kindness and respect (except on the roads where they just wonder all over the place and squeeze you into places you don’t want to be.)

Oh yes, I hear the common complaint about Chinese being deceitful, acting one way but never telling you what they really think. That may be true but maybe the truth lies in their long-term view of how to win in the world; and this view conflicts with our actions to succeed in the short term.

One thing though was clear to me, the old adage is apt: we bring a business deal to the table in the hopes that we can build a relationship; whereas the Chinese bring a relationship to the table in hopes of finding a business deal. By the end of my visit to Shanghai I had new friends and believe they were being open and honest with me. We’ll see if this proves out on my next visit.

My last day in Shanghai was a treat. It started with breakfast with a friend from Paris who is now working in Shanghai. Like the Chinese I believe in maintaining relationships. After breakfast I knew I had to venture into the bustling city to do some shopping; an intimidation that I did not welcome. My client contact, David, solved this problem as he solved all other problems that came up while I was there. He assigned his mother to me for four hours. What an experience.

David’s mother is a retired schoolteacher. She taught accounting to upper class students. She is an exceptionally classy person. But with all of her accomplishments she does not speak English (I’m not implying that she should – just stating a fact about our acquaintance.) We got by with hand signals, pictures and the odd guttural grunt. What I saw, though was a professional at the top of her trade. This woman can shop!

I thought my wife could shop, but David’s mother holds the Olympic gold. I would have been eaten alive in the shopping district. I didn’t want much; just T-shirts for the grandchildren and a gift for my wife. It took her time to get into gear and actually center in on my needs but then the machine went to work.

First it was the T-shirts. We hit a few shops. I chose what I wanted and then the negotiations began – or should I say “the fury.” By the time we left the shop owner was chasing us down the walkway shaking her fist and yelling. I can only imagine the invectives. Now let’s get this straight, we’re talking T-shirts, not nuclear arms. Oh yes, I got three high quality T-shirts – made in China, for $10.

Now turn the page from the back alley T-shirt negotiator to the sophisticated gift buyer. Out she went into the street with me in tow. She darted from store to store demanding that clerks expose their merchandise. She poked, she prodded, she clinked, she gazed. Good quality, bad price; bad price, good quality. Out we flew from the high-end shops and scurried down some side streets. Out of one small shop into another – this was her plan all along. She had all the information she needed about features, quality, and price. She was in control. The only question now was finding the victim.

Finally a hit; a small shop with good merchandise at reasonable prices. Lucky for me the owner spoke good English and had a calculator that converted Chinese RMB into US dollars. Let the games begin! My T-shirt banshee morphed into a sophisticate. A different victim summoned a different persona. We started at $340 and struck the deal at $68. The owner was close to tears. She told me that my representative had driven the best deal in the famed history of shopping in Shanghai. I think I believe her.

Quickly now we dash across the street for a traditional Chinese lunch. Even though we couldn’t speak didn’t mean we couldn’t communicate. Relationships are secured at the meal table, not the sales counter. Out comes the cell phone for a hyper call to David. The phone passes to me. David’s mother wants to know if I’m satisfied with the purchases. My nod quiets her eyes; she puts me in a cab and is swallowed up into the crowd.

Shanghai central: politics, capitalism, shopping, and friends.

Saturday, November 28, 2009

Dali, Catalonia, Barcelona

One of the great things about writing a book like Customer Driven Change is that you get invited to nice places to speak. Barcelona is one of those nice places.

I think that visiting Barcelona and talking about Spain must be equivalent to visiting Montreal and talking about Canada. I'll avoid the temptation and keep my remarks within the borders of Catalonia, the province that holds Barcelona.

Although the Spanish economy is said to be slow in its pull out of the depression, I did not get the same sense for Barcelona. It's reported that Barcelona has about 3,000,000 inhabitants - I think I met everyone of them on my many walks on the mile long pedestrian mall, the Rambla. I have no idea where all of these people were going, all day and all night.

They certainly weren't going into the brand retail shops at the upper end of the Rambla. These shops were nearly vacant except for some specialty stores like Nespresso. But the people were rushing, generally well dressed, somewhere.

Barcelonians tell you that their natural harbor is the biggest port for cruise ships. I can believe it. The ships are huge as you see them docked in the modern harbor. But as I look up the shoreline I see thousands of shipping containers laying idol in the yards. Maybe the local economy is slower than I think.

But some of those people on the Rambla are from the cruise ships. They make their way up from the docks and flood into the narrow side streets for tapas and paella. The wine and sangria are excellent, but not so much so for the beer. Tourism will be good to Barcelona. The local people care about their city and is shows in the way they keep it clean.

But if you want to see a strong sub-economy, work your way to the Sagrada Familia. This was a WOW moment in my life. The Sagrada is Gaudi's glorification of Christianity. When you see the towers your reaction has to be wow!

Construction started more than 100 years ago. Completion is anticipated in 2050. I've stood in the center of many cathedrals such as Chartres in France. I am always awestruck by the architectural and engineering brilliance required to build these monuments. But they were completed - usually hundreds of years ago.

Not so for the Sagrada. It's still being built. As I stood in its vacant interior I felt the flow of history going through this point out to 2050. Just think, hundreds of years from now people will stand in Sagrada, marvel at its grandeur and wonder about the lucky people who saw it being built.

The Sagrada is a culmination of Gaudi's life long study of organic architecture. The mathematical study of a leaf, a vine, or a fern and then its translation into a building. Brilliant, but at times gaudy - oooops?

The economy slows down as you get outside the city. I took a two hour train ride to Figueres the birthplace and home of Dali. The theatre-museum that he left to the city is truly an architectural marvel; however, I never was a fan of surrealism and seeing his work in person didn't convert me.

Figueres is a quaint town but I have to wonder how long this type of culture can survive. Like many small towns in Europe it is built around its daily market. But as the train takes people to and from work you have to wonder how long the self-sustaining farming tradition will survive. It's sad, but globalization and digital wireless seem to have a stronger future than the vegetable gardener and butcher of Figueres.

One thing you won't find in Barcelona is a love of bullfighting. Yes, they have a ring but the continuance of fighting is questionable every year. Bulls are not bred in Catalonia. Fighting is an import from "Spain" and the Catalonian blood runs thin from Spain but deep from Northern Italy and Southern France. There just isn't a deep tradition for the kill as Hemingway describes in Death in the Afternoon.

It's hard to judge how well customers are valued when you're unfamiliar with the language and traditions. However, from my limited interactions I think all is well. Barcelona is high on my "must return" list.

Monday, October 26, 2009

Accountability ... barrier to recovery

Let' boot this trite use of the term "accountability." We use it whenever we don't have an answer. It's going to get in the way of the serious business of recovery - the NEW business as usual.

The starting point is to define the term. Accountability is something that I extract from someone. In a management sense it is the converse of delegation. In effect, I delegate some of my power to get something done that is my responsibility. For example: "Please complete your report by Friday afternoon and have it on my desk."

Delegation is not easy. It requires you that you break down your duties into chewable chunks so you can hand then off to others. It also means that you have a way to recognize how well these parcels of work are being done: is the report on your desk and does it have the required content.

I now have everything I need for accountability. A clear delegation downward and an equally clear specification of upward expectations - the measures. I can now hold you accountable. Did you get my work done in the way that was agreed. Accountability is purely my job. It's right brained, analytic, cause and effect management. It's me and you with the emphasis on ME.

We need accountability. Likely 80% of what goes on in organizations can be put within an accountability chain. But accountability alone isn't going to lift us to recovery. We've been in risk adverse accountability mode for more than a year. We've protected balance sheets and held onto cash. But this type of thinking won't get us moving again.

Businesses that pull away over the next year will be those that find the white space needed to grow. This will happen because people are empowered. They will not need delegated power from the organization. They will use their own power to "do what's right."

I know this concept of people acting on their own scares businesses: "...we just can't have people running around doing what they think is right - we need empowerment within established guidelines." Oh, really? Doesn't that defeat the purpose?

Well if you can't trust people to "just run around", what keeps them in check? Responsibility, that's what. Responsibility is a personal issue. It's not about the organization telling, it's about the employee doing and doing "what's right" because the organization has imbued them with a strong sense of values.

When I hear managers complain that "... there's no accountability around here anymore", usually they mean "responsibility." What they're saying is that people make commitments and then don't follow through, or they act as bureaucrats without using common sense.

When that happens, managers are really complaining about themselves. They know they have not embedded values based leadership. They know that to get anything done they have to micro-manage. They need to constantly work hard at delegating and extracting accountability.

This type of behavior isn't going to get business where it needs to go. It's time that our leaders understood "empowerment" and trusted employees to be responsible. Yes, there will be mistakes, but deal with irresponsible behavior on a one-to-one bases, not an organizational one.

Wednesday, October 21, 2009

Your Leader's Biggest Challenge - EVER!!!

Getting that plane out of Schippol airport in Amsterdam is child's play compared to what's facing captains of corporations.

Look at who our leaders have been and what they've been doing for the last decade. They tend to be right brained, cause and effect, ROI people. The numbers guys. People who stare into their computers all day looking for revenue and margin. Need I mention the likes of Ken Lay, Bernie Madoff, Ken Lewis and countless others.

This wasn't always the case. Even up to the early 90's when I had an idea on how to improve the effectiveness of an organization people would say: "... yeah, but you'll never get it past the CFO." I'd say, "get me to the CEO and I'll sell it." And usually I did. The CEO understood that business was more than profits - it was about keeping the organization healthy and relevant.

Not so today. CEO's have morphed into the Senior-CFO. Employees and customers are trumped by the bottom line when it comes to business strategy and operations.

This has probably served business well in the past year. Protecting balance sheets, conserving cash, and cutting costs have been necessary to survive. Companies have cut themselves to temporary "profitability", but they can't cut themselves to sustainability. It's time for a new trick.

Leaders are facing two very big currents that could merge into a tsunami:
  • Customers: They're willing to forgive, but not to forget. They're standing at the ready to punish companies that flaunt excess - particularly in profits, executive compensation, and bonuses. They're looking to reward companies that show moral leadership and a willingness to sustain communities and the environment.
  • Employees: Employee commitment has never been so low. A recent report in The Economist showed that over the past two years it has fallen from over 95% to 39%. Equally disconcerting is that they are willing to stagnate on the job rather than move on. USA Today reported that almost 50% of employees are willing to wait more than a year to find a new job when they are dissatisfied.
This is quite a two punch for businesses trying to "turn things around." We have angry customers and disaffected employees. Wow! That's not a job for a Senior-CFO.

As we emerge from recession leaders will need to be strategic, visionary, and inspirational. Will they remember these skills? Did they ever have them? This is going to be fun.

Wednesday, September 30, 2009

Leadership Betrayal: When Leaders Don't Deliver

Leadership Betrayal

When Leaders Promise, But Don’t Deliver


Most business people aspire to be leaders. We know this is the pinnacle of our profession.

o Most of us start out as “individual contributors” where we get results though our skill, raw talent, or determined force of will. But individuals don’t move mountains

o Next we learn the mechanics of managing people – planning and controlling. Our ability to get results augments exponentially; but there is a limit. We can only get results through people we can “touch” – resources we actually control

o Finally we come to understand that transformations, the big bangs, come through leadership – that mystical ability to inspire and excite others to do extraordinary things. “I have a dream…”; “ask not…”; “yes we can…”

Why do we follow these people? We’re told that it’s because they can communicate. They reach our souls. That may be true in some cases, but Bill Gates never inspires me, but his friend, Warren Buffet, does. No, there’s something more going on than inspirational communication.

I think that leaders reach some deep level of trust with us. We believe in their words and how those words make us believe in ourselves. In many parts of life this is a complete formula: motivational speaking and evangelical eulogizing come to mind.

Words = inspiration, = self-confidence, = pursuit of aspirational goals.

But leadership in business is more than talking and sermonizing. It’s more than infusing people with hope and sending them on their way. Inspiring people with the excitement and vision of flight is figuratively uplifting until they step off the edge of a cliff. At this point they learn the hard reality of Leadership Betrayal.


Why do we trust people when they are painting us the “…too good to be true” picture? How have they convinced us that we can do something that hasn’t even been in our dream space?

Well, we believe because we not only believe in their words, but we believe in them. We implicitly believe that their inspiration comes with their support. The Grande Armee believed in Napoleon because he was the first to charge into adversity. He painted the inspirational vision and then made the decisions to bring it into a focused picture.

When our leaders speak, we interpret this to mean that their ideas will be backed up with the management discipline and resources needed to implement the grand new idea. Management mechanics will support leadership dynamics. There will be resources, supply chains, systems and controls, legal agreements and what ever else is necessary to turn the ordinary into the extraordinary. And more than anything we expect to bask in the radiance of the leader as we work to change the world.

But what happens when vision isn’t being achieved, resources run out, and the leader is out chasing a new shinny thing? Leadership Betrayal, that’s what. All of a sudden the vision is exposed as unattainable in the absence of the elite talents of the leader.

However, the leader sees it differently. They see that the subordinate has been empowered to make things happen – “…just like I would.” They lose faith in the subordinate. They start to see the subordinate as a mere mortal – “…just another mechanic who can’t turn my ideas into reality.

The leader withdraws resources and their attention. Leadership Betrayal goes into ever decreasing concentric circles until intense acrimony destroys both parties.

Does it have to end this way?


If you answer “yes” to these questions, your organization may suffer from “leadership betrayal”

1. Do you have a leader? Someone with big ideas, resources, and the ability to inspire others?

2. Is there a pattern of betrayal? Are there several incidences where big ideas have failed and people feel they were abandoned

How do you reverse this trend? Training is often not the answer. Leaders are more born than made; they just haven’t developed the management discipline to support their leadership. However, management training for natural leaders is usually tedious and repugnant to them.

You might be able to find a trusted lieutenant – Eisenhower had Bradley and Gates had Balmer; but the operative word is “trusted.” Who can you trust when the issue is potential betrayal? When will internal politics overcome the good intentions of the lieutenant? The role of 2iC (second in command) is difficult to sustain.

The best way to guard against Leadership Betrayal is to support with leader with management systems that can be sustained. Here’s an approach:

o Review the documents on past failures and interview the central figures to understand whether mechanics supported the leaders dream

1. Vision. By definition it can’t be precise. But it should derive from some fundamental principles or values. Are these clear?

2. Migration Path. The vision gets clarified as you pass through stages and gates. Are the milestones clear and realistic?

3. Resources. Are there resources to meet each milestone?

4. Competence. Do subordinates have the competence to drive toward the dream? Are you asking a technician to be Steve Jobs?

5. Reward. Not every idea will result in short term, independent wealth. Is the reward overstated?

6. Attention. Did the leader abdicate? Did they set a dream in motion and then lose interest

Leadership is a rare quality. It should never result in betrayal.

Sunday, September 13, 2009

#1 Rule for Writing a Business Book - Don't

Did you know that:

o 500 to 1000 books are published everyday in the United States?

o 95% of books never sell 5000 copies?

o if you get your book into Barnes & Noble, you’ll make less than $2.00 for each book they sell?

o E-book publishing is increasing at 25% to 50% per year

I wish that I had understood these numbers two years ago when I struck out to write my book, Customer Driven Change: What your customers know; your employees think; your managers overlook. Reactions to my authorship tend to be: “what an accomplishment,” and “I think I'd like to do that!”

I'm appreciative of the first comment - since it took me several thousand hours of work; however, I've got to caution you about trying this on your own. Be forewarned, it will be the most excruciating experience of your life. The wonder of writing a business book falls into three sections:

  1. writing the book - this is the easy part
  2. publishing the book - this is not for the faint of heart
  3. selling the book - this makes the first two parts look like child's play

Writing the Book

You’ll need more than a good idea. You’ll need long periods of quiet time. You’ll also need an editor. Usually a family member or friend is not a good idea - but there are exceptions, particularly if you're paying them.

Oh, one other thing. Did you ever wonder why business books have a boring look and textbook feel to them? It's because every time you add a grap
h, chart, table, or call-out you add in printing complexity. There comes a point where "user friendly" is cost prohibitive.

Publishing the Book

You should decide on how you will publish before you have completed the manuscript - or even have a good draft. Basically you have three publishing choices, each with pros and cons:

  1. Traditional Publishing: The big publishers may give you a small contract and they will do limited marketing, but they’ll own the rights to your book and they get involved in its content.
  2. Self-Publishing: This is you and you better be a good project manager. You will own the rights to your book and you'll get all the net revenue, if you can find people to buy it at a reasonable price.
  3. Hybrid Publishing: This is a niche market where you can go to a recognized publisher and pay them for their services. It's not cheap, but you do have the rights to your book - and its net profit.

Marketing the Book

Don’t fool your self. You may have written the next Wealth of Nations. At this point it’s not about content. It’s about finding people to write reviews; getting media spots; selling books to distributors; mailing books to colleagues and carrying boxes of books to meetings. Sure, Amazon will post your book, but who will buy it if they haven’t heard about it? Oh, yeah – there’s that “viral marketing” thing, right. Well be prepared to invest in a website, produce videos, and write a blog (yes, like this one).

Writing a business book has a lot of intrinsic value, such as personal accomplishment and supporting another line of business like consulting. But don’t get into this venture to make money. People make money in the publishing business, but it’s rarely the first time author.