Showing posts with label Books and Leadership. Show all posts
Showing posts with label Books and Leadership. Show all posts

Wednesday, December 29, 2010

Courtesy - McKinsey & Company

In this, our final Top Ten Newsletter of 2010, we've rounded up the most popular articles among readers this year. Topics they were most interested in include decision-making biases, digital marketing, and management in uncertain times.
Global forces: An introduction graphic 1. STRATEGY
Global forces: An introduction
Five crucibles of change will restructure the world economy for the foreseeable future. Companies that understand them will stand the best chance of shaping it. A related video highlights the value of tracking global forces and how to build them into corporate strategy.
Clouds, big data, and smart assets: Ten tech-enabled business trends to watch graphic 2. BUSINESS TECHNOLOGY
Clouds, big data, and smart assets: Ten tech-enabled business trends to watch
Advancing technologies and their swift adoption are upending traditional business models. Senior executives need to think strategically about how to prepare their organizations for the challenging new environment. In a set of accompanying podcasts, leading experts offer their views on how these trends will evolve and change business models.
A new way to measure word-of-mouth marketing graphic 3. MARKETING
A new way to measure word-of-mouth marketing
Assessing its impact as well as its volume will help companies take better advantage of buzz. An accompanying podcast focuses on how marketers can use word of mouth to influence consumer behavior.
4. STRATEGY
The case for behavioral strategy
Left unchecked, subconscious biases will undermine strategic decision making. Learn how to counter them and improve corporate performance, and explore an accompanying interactive showing the biases most pertinent to business and the ways they can combine to create dysfunctional patterns in corporate cultures.

Plus, take this brief survey on how you make decisions, and we'll send you feedback on how your decision-making style compares with those of other respondents and on how to avoid any biases you may be prone to.
5. GOVERNANCE
Why good bosses tune in to their people
Know how to project power, counsels Stanford management professor Bob Sutton, since those you lead need to believe you have it for it to be effective. And to lock in your team’s loyalty, boldly defend their backs.
6. ORGANIZATION
How centered leaders achieve extraordinary results
Executives can thrive at work and in life by adopting a leadership model that revolves around finding their strengths and connecting with others.
7. CORPORATE FINANCE
Creating value: An interactive tutorial
In this video presentation, McKinsey partner Tim Koller explores the four guiding principles of corporate finance that all executives can use to home in on value creation when they make strategic decisions.
8. ORGANIZATION
Retaining key employees in times of change
Many companies throw financial incentives at senior executives and star performers during times of change. There is a better and less costly solution.
9. MARKETING
Unlocking the elusive potential of social networks
To realize the marketing potential of virtual activities, you have to make them truly useful for consumers.
10. ORGANIZATION
Boosting the productivity of knowledge workers
The key is identifying and addressing the barriers workers face i

Wednesday, June 16, 2010

Movies and pork bellies

Working for Options Clearing Corp taught me many things. Among those was an introduction to the history of Chicago's top exchanges. CME or Merc, originally started with futures contracts on frozen pork bellies, will soon see its first intangible commodity trading. Movies, will soon become the first intangible commodity to be traded on exchanges that allow future contract trading. Thinking of them as high risk commodities (is it really a commodity?), our Govt. is structuring regulations for these newly recognized commodities.

Why regulation? This commodity can be "manufactured" by two bound to doom Mr. Joes and the buyers of futures would lose all their money. To ensure that does not happen, we need regulation. But, how many times have we been able to capture all exceptions under regulations? Alright, no producer/director intends to make flop movies, BUT, only until there is no indirect payoff. And who suffers at the end of the day? Consumer - with potentially more flops shows than before and futures buyer whose money is snatched by the banker selling that security.

Saturday, January 9, 2010

INFLUENCE: The Psychology of Persuasion by Robert B. Cialdini

Answer the following before moving forward.
1. If you have to present two products to a client, which product will you present first - costlier or cheaper?
2. Is it better to tell you client what they stand to gain by moving in your direction or what they will lose if they do not?
3. If you have a new piece of informaiton, when will you tell that its new, before or after delivering information.
4. If your product has strengths and weaknesses, will you present weaknesses early or late?
5. If someone praised your product/service, what do you do immediately after you have said Thankyou?
6. If you want someone to cooperate with you, what is the single most important thing you can do before you influence that person.

The principles:
1. Reciprocation - Give and take - You give so that the other person is obligated to say yes to you.
a) There is a moment of power after someone says THANKYOU: When you do a favor and someone says thankyou....you say....No problem, I know if the situation will ever reverse you will do the same for me (Gaining the credit for future basically).

· Another consequence of the rule, however, is an obligation to make a concession to someone who has made a concession to us.

b) Within the situation, provide concessions. There is a moment of power after someone says NO to you. at that time you need to provide concessions and DO NOT RETREAT.

2. Scarcity - People want to have more of what you cant have.
3. Authority - If an authority or an expert says it, it must be true.
4. Consistency / Commitment : People are likely to follow what they have said  i.e. committed to in public. Restaurant example.

5. Consensus - People follow others. So, people respond to something that everyone is doing.
6. Liking - People tend to follow others who are like them - look, actions, culture etc.
 · People simply like to have reasons for what they do

SOME EXAMPLES
· The point is that the same thing – for instance, room-temperature water – can be made to seem very different, depending on the nature of the event that precedes it.
· Sell the suit first, because when it comes time to look at sweaters, even expensive ones, their prices will not seem as high in comparison.
· “The house I’ve got them spotted for looks really great after they’ve first looked at a couple of dumps.”
· The technique is a simple one that we can call the rejection-then-retreat technique. Suppose you want me to agree to a certain request. One way to increase your chances would be first to make a larger request of me, one that I will most likely turn down. Then, after I have refused, you would make the smaller request that you were really interested in all along. Provided that you have structured your request skilfully, I should view your second request as a concession to me and should feel inclined to respond with a concession of my own, the only one I would have immediately open to me – compliance with your second request.· For a variety of reasons the percentage of successful door-to-door sales
increases impressively when the sales operator is able to mention the name
of a familiar person who “recommended” the sales visit.
· If a customer refuses a purchase ask for referrals
· Once we have made a choice or taken a stand, we will encounter personal
and interpersonal pressures to behave consistently with that commitment.
· For the salesperson, the strategy is to obtain a large purchase by starting with
a small one. Almost any small sale will do, because the purpose of that small
transaction is not profit. It is commitment.
· Look at it his way – when a person has signed an order for your merchandise,
even though the profit is so small it hardly compensates for the time and effort
of making the call, he is no longer a prospect – he is a customer.
· The tactic of starting small with a little request in order to gain eventual
compliance with related larger requests has a name: the foor-in-the-door
technique.
· Once you’ve got a man’s self-image where you want it, he should comply
naturally with a whole range of your requests that are consistent with this view
of himself.
· Apparently the mere knowledge that someone viewed them as charitable
caused these women to make their actions consistent with another’s
perception of them.
· The enormously successful Amway Corporation, for instance, has hit upon a
way to spur their sales personnel to greater and greater accomplishments.
Members of the staff are asked to set individual sales goals and commit
themselves to those goals by personally recording them on paper.
· Something special happens when people personally put their commitments on
paper: They live up to what they have written down.
· “25-, 50-, or 100 words or less” testimonial contests
· ...express their opinions with a visible show of hands rather than by secret
ballot. Once jurors had stated their initial views publicly, they were reluctant to
allow themselves to change publicly, either.
· “persons who go through a great deal of trouble or pain to attain something tend to value it more highly than persons who attain the same thing with a minimum of effort”
· During this time, the dealer knows, customers automatically develop a range of new reasons to support the choice they have now made.
· We can learn, from the way the other witnesses are reacting, whether the
event is or is not an emergency.
· We will use the actions of others to decide on proper behaviour for ourselves,
especially when we view those others as similar to ourselves.
· Thus the most influential leaders are those who know how to arrange group
conditions to allow the principle of social proof to work maximally in their
favour.
· As a result, the Indian realised, it was possible to kill tremendous numbers of
buffalo by starting a herd running toward a cliff. The animals, responding to
thundering social proof around them – and never looking up to see what lay
ahead – did the rest.
· Once again we can see that social proof is most powerful for those who feel
unfamiliar or unsure in a specific situation and who, consequently, must look
outside of themselves for evidence of how best to behave there.
· Each new prospect is visited by a salesperson armed with the name of a
friend “who suggested I call on you.” Turning the salesperson away under
those circumstances is difficult; it’s almost like rejecting the friend. The
Shaklee sales manual insists that employees use this system without fail: “It
would be impossible to overestimate its value. Phoning or calling on a
prospect and being able to say that Mr. So-and-so, a friend of his, felt he
would benefit by giving you a few moments of his time is virtually as good as a
sale 50 percent made before you enter.”
· Research has shown that we automatically assign to good-looking individuals
such favourable traits as talent, kindness, honesty, and intelligence.
· Several studies have demonstrated that we are more likely to help those who
dress like us.
· Another way requesters can manipulate similarity to increase liking and
compliance is to claim that they have backgrounds and interests similar to
ours.
· Many sales training programs now urge trainees to “mirror and match” the
customer’s body posture, mood, and verbal style, as similarities along each of
these dimensions have been shown to lead to positive results.
· Conjoint efforts toward common goals steadily bridged the rancorous rift
between the groups.
· Compliance professionals are forever attempting to establish that we and they
are working for the same goals, that we must “pull together” for mutual
benefit, that they are, in essence, our teammates.
· ...like the new-car salesman who takes our side and “does battle” with his
boss to secure us a good deal.
· “known by the company we keep”
· Research has shown that an attractive model posing with an automobile will
make the car appear more desirable. Some advertisers apparently believe
that the same holds true for all sorts of items
· It is the extreme willingness of adults to go to almost any lengths on the
command of an authority that constitutes the chief finding of the study
· It was found that with each increase in status, the same man grew in
perceived height by an average of a half inch, so that as the “professor” he
was seen as two and a half inches taller than as the “student”
· The percentage of compliance when he was in uniform – 92%
· Three and a half times as many people swept into traffic behind the suited
jaywalker.
· Finely styled and expensive clothes carry an aura of status and position, as
do trappings such as jewellery and cars
· People seem to be more motivated by the thought of losing something than by
the thought of gaining something of equal value
· The “deadline” tactic
· ...invoke the scarcity principle three separate times in just five words that
read, “Exclusive, limited engagement ends soon!”
· The advertising copy included the statement, “a book for adults only,
restricted to those 21 years and over”
· Those who learned of the age restriction (1) wanted to read the book more
and (2) believed that they would like the book more than did those who
thought their access to the book was unlimited
· The customers who received this last sales presentation learned that not only
was the availability of the product limited, so also was the news concerning it
– the scarcity double whammy
· The fact that the news carrying the scarcity of information was itself scare
made it especially persuasive
· As we have seen in the case of political freedoms and (especially pertinent to
the present discussion) chocolate-chip cookies, people see a thing as more
desirable when it has recently become less available than when it has been
scarce all along
· The results showed that those whose cookies became scare through the
process of social demand liked them significantly more than those whose
cookies became scare by mistake. In fact, the cookies made less available
through social demand were rated the most desirable of any in the study
· The feeling of being in competition for scarce resources has powerfully
motivating properties
· Scarcity plus rivalry
· The joy is not in experiencing a scare commodity but in possessing it

Wednesday, December 30, 2009

Top Ten Newsletter | McKinsey

Link at the end 

1. GOVERNANCE
Leadership lessons for hard times
A series of interviews with 14 CEOs and chairmen of major companies sheds light on the foundations of corporate leadership.

2. BUSINESS TECHNOLOGY
Five trends that will shape business technology in 2009
The year 2009 will be challenging for CIOs. Here’s how to play your hand.

3. FINANCIAL SERVICES
A better way to fix the banks
Here’s a plan that could solve the toxic-asset pricing problem voluntarily—without requiring Uncle Sam to nationalize the whole industry—and make (pretty much) everyone a winner.

4. HIGH TECH
Hal Varian on how the Web challenges managers
Google’s chief economist says executives in wired organizations need a sharper understanding of how technology empowers innovation. [includes interactive]

5. STRATEGY
Leading through uncertainty
The range of possible futures confronting business is great. Companies that nurture flexibility, awareness, and resiliency are more likely to survive the crisis, and even to prosper.

6. ECONOMIC STUDIES
The crisis—one year on: McKinsey Global Economic Conditions Survey results, September 2009
A year after the global economic system nearly collapsed, many companies are finally finding ways to increase profits under the new conditions. But almost as many expect profits to continue falling, and executives also indicate that their broader financial hopes remain fragile. Many expect more government involvement in economies and industries over the long term.

7. MARKETING
Enduring Ideas: The industry cost curve
In this interactive presentation—one in a series of multimedia frameworks—McKinsey director Rob Latoff offers insight into the industry cost curve, a business school classic for understanding pricing. By bringing discipline and a practical set of definitions to bear, this framework can be applied to real-world, competitive markets. [includes interactive]

8. BUSINESS TECHNOLOGY
How companies are benefiting from Web 2.0: McKinsey Global Survey Results
The heaviest users of Web 2.0 applications are also enjoying benefits such as increased knowledge sharing and more effective marketing. These benefits often have a measurable effect on the business.

(Premium membership required)

9. ORGANIZATION
Good boss, bad times
Management expert Robert Sutton shares lessons on handling layoffs and teams in crisis. [includes video]

10. CORPORATE FINANCE
What next? Ten questions for CFOs
As companies shift their attention from fighting the crisis to getting the most from the recovery, CFOs must keep them focused.

Read : McKinsey's best of the year

Monday, November 9, 2009

A Practical Guide To Finding Your Passion

We frequently hear the prophesy - follow what matters to you most or do what you love. However, I always wondered (like most of us) that how important it is for me to follow what I love. I grew up with a thought that stabilizing my family is the sole purpose of my life. What that meant to me was getting into top engineering school to get a well paying job. What could be better than not having them worry about their child's future? So I relentlessly and quite successfully did that and frequently experienced the pleasure of providing them the best. But, within seven years of professional career, I begin to question myself - now what? I had accomplished what I wanted and my accentuated career progression curve started to flatten. The energy inside was anxiously telling me to make the next stride. Spot check at job satisfaction clearly exposed a feeling of emptiness even though I was doing the best throughout the day. I begin to wonder "what is it that I want" and in quest for finding that "what", i came across a book - success build to last.

A very few are fortunate to know what they are passionate about and little out of those follow what they love. This small elite group of people comprise of leaders who enjoy eternal sense of satisfaction and often they  shape this world. However phony this statement sounds, this is the ground reality. I am not saying that I am following what I am passionate about, but, with the help of this book, I have started to pave the way for that. Some of the things I liked about this book and that have already helped me shape my thoughts are:

  • A Practical Way of Finding What You Love: Often, we are already following what we love, but, in a mild and suppressed form. We just have to clear the haze and shine that piece of our life. For example one can say I am passionate about basketball. I practice and watch the game every day, read news, follow it more than anything else. Well, you could very well be a basketball fan, but, think again. What is it that can energize you to get up and do something even after a tiring practice session of basketball. Is it a discussion about new venture? Is it acting in a play? Or is it playing with children? Your passion can very well be one of these. What can you do for a stranger for free? Is it researching a business idea, designing a house or clubbing with him to paint a wall? When you look for your passion ask these questions to yourself , look for signs and you will get it. One last thing, you passion could very well be left behind with your childhood. But, there is always be a thought of that thing still living in some remote room of your heart which is locked by everyday life. Dig deeper and do not deny yourself. Consider and eliminate everything before you get down to just ONE thing.
  • Urgency to Follow What You Love: The author said one statement that stick in my mind. If you don't love your job then someone who is passionate about that job will snatch it from you. Brutal example of that is the current spree of layoffs. If you do not follow what you really love, you are bound to fail and the reason is simple. A person who loves his job will put earnest efforts to chisel his skills to perform the best on this job. On the other hand, you would merely be making it through the day. Result...catastrophic!
  • Finding a Propeller: Recall the pleasure you experienced when you last time did what you love. Use a collection of such memories as the primary driver to make this transition. It could be a drastic change, but, chances of your failing in making this change are extremely rare. Remember, when you follow your passion, work becomes leisure and you do not even realize how quickly you become successful. Money, recognition, popularity -they all come with time. They do come in abundance, but, you have to be patient and persistent - irrespective what people around you think of you.
Here is the link to this book: http://www.amazon.com/Success-Built-Last-Creating-Matters/dp/013228751X

Friday, November 6, 2009

Motivating Employees

Mckenzie quarterly recently published an article about motivating employees in this economy. I think its by chance that the article was published in this economy and it became so important to understand. With all the companies in dearth of cash and depleted reserves, following were cited as three main ideas that can help manage employees anxiety and motivate them to do their jobs enthusiastically:

1. Appraisal from immediate manager - works wonder in any situation irrespective if economy. Important to get things done in the right way.
2. Interaction with senior leadership - Senior leadership has to be immensely sensitive to employees anxiety and keep in touch with them via emails, regular (weekly / bi-weekly) updates, personal meetings and appraise etc.
3. Opportunity to lead tasks if not projects - This brings the sense of worth in any employee as he gets energized to accomplish the assigned task / project.

Traditional motivation comes from (in sequence):
1. Cash Bonus
2. Basic Salary Hike
3. Stock and Stock Options

With traditions in jeopardy right now, follow the modern trends and get the most out of your organization. Here is the full story: https://www.mckinseyquarterly.com/Organization/Talent/Motivating_people_Getting_beyond_money_2460

Sunday, October 25, 2009

Sway - Irresistibly Irrational Behavior

We all get swayed by our beliefs, prejudices and the way we perceive situations around us. We form believes from our life experiences and use those believes to assess our surrounding. For example, we often leave items on sale just because the price is too low. This is driven by our inner feeling that reduced items are often defective or not liked by many.We sometimes even pick the item, like it, but then get swayed thinking that it on sale so there has to be something wrong with it. I myself value clothing based on its brand. A CK shirt has to be good but Aeropostale...I tend to wear it at home. This is an irrational behavior as there are plenty of companies who manufacture equally good products as known brands and tag them much lower. The end result is that I usually pass those items paying extra for the same quality to CK.


Other situations that sway us frequently relates to avoiding short term loss. We frequently cross road on yellow light or change lane quickly to save few seconds. This results in getting a ticket, higher insurance for few years and in some cases collision and loss of life. A similar situation is sticking to a sinking stock that you recently purchased. We all tend to wait for it to re-bounce to atleast the original purchase price. In this chase, we disregard pieces of information that are clearly indicating that this is a loser stock now. As the stock goes down further, we think that its going to come back to the value it was sitting when you made the nasty decision of keeping it for now. The desire to recover loss does not end until no value is left in the stock.


In all the examples above, the point is that we form instincts that become hindrance to our rational thinking. We take decisions in the influence of such instincts, disregarding facts and information that may be indicating otherwise. Such a behavior leads to making wrong choices. When we have to decide, we should take a long term view and see how the decision/choice that you are about to make fits into the long term view. Imagine you had sold the stock when it lost $2 to purchase something that gained $3 in next couple of weeks when your stock lost another $4.


Checkout this book: Sway: The Irresistible Pull of Irrational Behavior