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World stocks mostly lower on dour economic outlook

2008-12-23T03:39:00.000-08:00

World stock markets were mostly lower Monday as a U.S. pledge to rescue its troubled carmakers failed to ease deep concerns that the global slump was hurting company profits.

The plan announced Friday to extend General Motors Corp. and Chrysler LLC $17.4 billion in loans brought a measure of relief to some investors, staving off bankruptcies that would have surely deepened the recession in the world's largest economy.

But early gains in Asia soon faded amid trenchant worries about the U.S. and global outlook, as well as shrinking demand for Asian-made products like cars and electronics that keep the region's economies growing, analysts said. In Japan, new figures showed a record 26.7 percent plunge in exports last month compared to a year ago.

With demand drying up, Toyota Motor Corp. slashed its profit forecast Monday for the fiscal year to the barely break-even point. Meanwhile, tech companies saw heavy selling after Taiwan's Hon Hai Precision Industry Co., world's largest contract electronics maker, announced plans to cut jobs and its chairman suggested the worst of the downturn was yet to come.

"The big question about what's going to happen with the big U.S. automakers has been settled for now," said D. Gorton, research analyst at Louis Capital Markets in Hong Kong. "But investors are still wondering what's going to happen with the U.S. and ... when the U.S. economy is going to recover."

Trading was light and investors pocketed some profits ahead of the year-end holidays.

In Europe, key stock measures in Britain, Germany and France fell more than 1.5 percent in early trade.

Hong Kong's Hang Seng Index dropped 3.3 percent to 14,874.61. Taiwan's key stock index sank 3.4 percent, dragged lower by a 6.6 percent decline in Hon Hai shares.

In South Korea, the Kospi dipped 0.1 percent after opening higher. Singapore, Australia and mainland China benchmarks were each down over 1. 5 percent.

Tokyo bucked the downward trend, with its Nikkei 225 stock average rising 135.26 points, or 1.6 percent, to 8,723.78 despite the latest bad news about the country's exports.

Japanese investors seemed focused instead on the U.S. auto industry bailout, helping buoy Honda 5.4 percent and Nissan 2.7 percent, and the country's recent efforts - including an interest rate cut Friday - to counter the recession.

Deutsche Securities banking analyst Shin Tamura said the central bank's recent moves, while unlikely to have a major direct impact on earnings or financial markets, might help improve sentiment.

"That the government and the Bank of Japan continue to take steps to stabilize the markets and economy is likely to allay market concerns somewhat," Tamura said in a report.

In Hong Kong, heavyweight HSBC lost 2.5 percent, pressuring the broader market, after the bank's credit outlook was revised to negative by ratings agency Standard & Poor's on Friday. China Mobile, meanwhile, tumbled over 5 percent on concerns about growth in subscribers.

Last week in New York, Wall Street finished a choppy session mixed. The Dow fell 25.88, or 0.30 percent, to 8,579.11 while the Standard & Poor's 500 index rose 2.60, or 0.29 percent, to 887.88.

U.S. futures were down, suggesting Wall Street would open lower. S&P futures were down 1.7 points, or 0.2 percent, to 879.60.

Oil prices were flat. The January contract dipped 7 cents to $42.29 in Asian trade on the New York Mercantile Exchange.

In currencies, the dollar strengthened to 89.67 yen, up from 89.24 yen, and the euro rose to $1.4075 from $1.3913 late Friday.

source: http://www.thejakartapost.com/news/2008/12/22/world-stocks-mostly-lower-dour-economic-outlook.html

HDX, a notebook computer or a portable TV?

2008-12-23T03:20:00.000-08:00

Back in the mid 1980s, IBM, Toshiba, NEC and a few other makers of IBM-compatible PCs began selling portable computers with a hinged display that people could carry with them from place to place in their bags.

That was when we became familiar with the term “laptop”.

A laptop computer was much larger than an A4-size writing pad. It was quite heavy, too.

The term notebook was coined later around the time a U.S. brand called Zeos started being advertised in computer magazines. Notebooks were supposed to be portable computers that had been reduced in size to fit into a briefcase.

At that time, despite their large size, laptops had quite teeny-weeny screens. In addition, they were all monochrome LCDs. (Remember that those were the days when the user interface was text-based).

We were all quite happy we could use a laptop as a glorified typewriter replacement — all that was required was MS or PC DOS and WordPerfect and a box of 5.25-inch or 3.5-inch floppy diskettes.

In those days, few could envision watching live TV for many hours at a stretch on one of those laptop computers. But, today, it is no longer a dream; you can watch TV broadcasts the whole day in your office cubicle as if you were relaxing in your own living room.

Courtesy of Hewlett-Packard (HP) Indonesia, I had three weeks to enjoy a brand new HP HDX16, a premium notebook that could keep you captivated for months.

I reported in this column a couple of weeks ago that HP now pays really serious attention to the style element of its notebooks in an effort to make them stand out in the crowd. The HDX16 is as impressive in the list of its technical specs as in its beauty. It has many of the upper-caste components, making its US$2,199 price tag fairly reasonable.

Here is a list of the critical components: Intel Centrino 2 platform with a Core 2 Duo T9400 processor running at 2.53 GHz; 4 GB of DDR2 memory; 320 GHz hard disk spinning at 5400 revolutions per minute (RPM); a 16-inch BrightView Infinity widescreen LCD; a Blu-Ray ROM; Wi-Fi a/g/n and Bluetooth; lots of lighted touch buttons; and a pair of Altec Lansing speakers with HP Triple Bass subwoofer.

The processor has 6 MB of L2 cache memory. Of course, to match the hardware, HP, not surprisingly, has chosen Microsoft Windows Vista Home Premium.

With such top-notch components under the hood, it is not surprising that this notebook performs with flying colors. Although, given its focus on digital entertainment, it may not be the best machine for games or heavy-duty movie editing, but it is certainly close enough.

The specs on the box also list that the notebook has an integrated DVB-T/analog TV tuner. I could not test the DVB-T, but the analog tuner using the included antenna produced reasonable display quality.

There is a cable connector for TV cable reception, too, which raises display sharpness and color quality significantly. HP also throws in two remote controls — one for the notebook and the other for the Media control.

The keyboard is extremely close to my ideal: Each of the caps is covered with a chrome-like layer. HP has chosen the right material to ice the keycaps so that they do not get smudged as quickly as the “piano-like” keycaps. The separate numeric keypad on the right has keys that are narrower than the main keyboard, but they are still as usable.

Of course there is an integrated Webcam, too.

HP uses NVIDIA GeForce 9600M GT with a 512 MB dedicated memory for the graphics subsystem. By default, the characters on the screen are comfortably large (even for me).
If HP had wanted to equip it with the latest technologies, it would have to include a 7200 RPM hard disk and DDR3 memory instead of the 5400 RPM and DDR2. However, as it is now, this notebook is already among the top-end units.

HP has also added a very thoughtful feature to the standard touchpad: Right above the panel there is a button to deactivate the pointing device. You must know how frustrating it is to have the pointer jumping all over the place as you inadvertently touch the pad. I think this toggle button should be made standard on every touchpad.

Strangely, despite its size and long list of features, the HDX16 is not as heavy as you might have guessed. HP managed to pack everything in a notebook weighing only 3.2 kilograms.
The HDX16 has a bigger sibling, the HDX18, which has an 18-inch display, and a whopping $2,999 price tag. Unfortunately, I did not have the detailed specs, and I do not know whether it will be available here, either.

A rather serious complaint that I have is that the chromed touchpad panel itself is not slippery enough to let the fingertips glide smoothly over it.

A glossy finish is very smudge-friendly, as you already know. The good thing is that the graphic artwork printed on the notebook’s body and cover, as well as its gray color, tones down the marks left by oily hands.

It’s too bad though that HP put the audio port on the front side; an area where the plugs are vulnerable to accidental elbow action.

Still, this is one of the notebooks that managed to make me feel sad as I said goodbye to it and put it back in its box for the courier to pick up.

source: http://www.thejakartapost.com/news/2008/12/01/hdx-a-notebook-computer-or-a-portable-tv.html

Dream Recorder

2008-12-23T02:40:00.000-08:00

Dream is a flower bed "and said people usually get up after, sometimes we forget what we have dreamed before.

But perhaps momentarily, we can play back what we have dreamed because of a previous research company in Japan, ATR Computational Neuroscience Laboratories has successfully developed a technology that can record all the dreams that experienced human and converted to a form / digital images.

By recording the dream, later we can see what is / happening in our dreams. :-)

Technology itself is actually a development of the technology they have developed where previously they have successfully created a computer through a rule based on the mind.

Examples of success are with them do a test where a researcher showed a word "neurons" to the computers of visitors and successfully translate the mind / word to the computer screen without the researchers pressing any button on the computer.

Sigbritt, 75, has world's fastest broadband

2008-12-19T14:13:00.000-08:00

A 75 year old woman from Karlstad in central Sweden has been thrust into the IT history books - with the world's fastest internet connection.

Sigbritt Löthberg's home has been supplied with a blistering 40 Gigabits per second connection, many thousands of times faster than the average residential link and the first time ever that a home user has experienced such a high speed.

But Sigbritt, who had never had a computer until now, is no ordinary 75 year old. She is the mother of Swedish internet legend Peter Löthberg who, along with Karlstad Stadsnät, the local council's network arm, has arranged the connection.

"This is more than just a demonstration," said network boss Hafsteinn Jonsson.

"As a network owner we're trying to persuade internet operators to invest in faster connections. And Peter Löthberg wanted to show how you can build a low price, high capacity line over long distances," he told The Local.

Sigbritt will now be able to enjoy 1,500 high definition HDTV channels simultaneously. Or, if there is nothing worth watching there, she will be able to download a full high definition DVD in just two seconds.

The secret behind Sigbritt's ultra-fast connection is a new modulation technique which allows data to be transferred directly between two routers up to 2,000 kilometres apart, with no intermediary transponders.

According to Karlstad Stadsnät the distance is, in theory, unlimited - there is no data loss as long as the fibre is in place.

"I want to show that there are other methods than the old fashioned ways such as copper wires and radio, which lack the possibilities that fibre has," said Peter Löthberg, who now works at Cisco.

Cisco contributed to the project but the point, said Hafsteinn Jonsson, is that fibre technology makes such high speed connections technically and commercially viable.

"The most difficult part of the whole project was installing Windows on Sigbritt's PC," said Jonsson.

Toddlers 8 Year Marriage Day Before Improving

2008-12-15T10:13:00.000-08:00

Married, it is the last request Reece, a toddler males aged 8 years old, died before the world. Feel strange to hear? Read the first story ...

Reece sentenced suffering leukimia since 4 years ago and set in May 2008, doctors estimate he only lived a few weeks.

Before the meet death, Reece last raised the demand to the mothers, Lorraine. Marriage is the main application other than Ferrari and Porsche up, spend one day in the office of fire and make the party with the pirate theme.

All except the main demand is met, but on the last day the boys bloody English said in Lorraine, "I am not ready to go ma'am."

Reece wants to marry a friend since the small, Elleanor the same age of eight years. Good-hearted girl who wants to approve Hobbes last friend.

"Wedding" was held with Ellanor mother, Hannah, as the parson. Both "bride" and then sending a promise to exchange rings.

After the procession of quasi-it, lie and Reece said, "Mother, I think now I can go." the next day, 5 July 2008, full of courage toddlers age is close.

Electricity generated by a pedestrian at Shibuya Station, Tokyo

2008-12-15T07:19:00.000-08:00

Electricity generated by the human case is not something new but still only for the development of the development continues to get the best results.

One technology that is made by Soundpower Corp.. which has created a floor that can generate electric energy.

This floor has started to try tested at Shibuya Station, Tokyo, Japan, which is certainly a lot of people there and thatch.

By using human as the producer of energy, the floor of this energy can generate electricity that can run the LED boards used as a train schedule information there. Plus a number of decorative lights.

This floor consists of several panels the size of 90 cm2, with a thickness of 2.5 cm.

It is estimated, people who have a weight of around 60 kg of energy can generate electricity by 0.5 watts running above 2 times.

It was not much but a person who through the station in Japan was only 1-2.

New Sharia Products In Asia Sought

2008-12-15T07:15:00.000-08:00

The booming Islamic finance industry has yet to rub off on wealthy Asians who say there are far too few Sharia products to invest in, the private banking arm of Malaysia's second largest lender said yesterday.
Sharia investing is a key pillar in the Middle East and has caught the interest of non-traditional centres such as London and Singapore, but rich Asians are still cool on it.
Asia is a big potential market for the $1 trillion Islamic finance sector, with the Asia-Pacific home to 28 per cent of the world's high-net-worth-individuals, who are defined as those with investible assets of more than $1 million.
Even in Malaysia, which has the world's largest Sharia bond market, wealthy individuals have limited interest in Islamic assets.
"The appetite is still quite small because they continue to nibble," said CIMB Private Banking co-head Carolyn Leng.
The bank says it is Malaysia's top private banking firm with assets of 4.4 billion ringgit ($1.23bn). The bank expects to increase this to about 7bn ringgit by 2010, Leng said.
"Offering of Islamic products are not that great here, what you have is probably what the market (outside) has as well. Product innovation is key, we need to be a lot more creative."
Structured products and Islamic bonds are the main sharia products that wealthy Malaysians put their money into, Leng said.
In contrast to Asia, Middle East investors have a wider choice of Islamic offerings as banks tap their global resources to structure innovative products, Leng said.
"There are a lot of derivatives-based kind of products. The way they structure some options into their products is interesting because it's done in such a way that it's a profit-sharing method," she said.
Islamic banking products can be bought and sold by all investors, regardless of individual religious belief, and is premised on the notion of ethical investing.
Islamic banks have been barely bruised by the global financial crisis, although falling property and commodity prices and slowing economies are starting to affect the sector.
Source : Gulf Daily News

HSBC Amanah, Best International Islamic Bank

2008-12-15T07:10:00.000-08:00

HSBC Amanah is the global Islamic banking division of the HSBC Group, and was established in 1998 with the aim of making HSBC the leading provider of Islamic banking worldwide. With more than a hundred professionals serving the Middle East, Asia Pacific, Europe and the Americas, HSBC Amanah represents the largest Islamic banking team of any international bank.
HSBC has a rich tradition of community banking, and HSBC Amanah was established to serve the particular financial needs of Muslim communities. Our mission statement and corporate values reflect this vision.
The HSBC Amanah mission statement:
HSBC Amanah is committed to improving the lives of our customers worldwide by providing them with the highest quality Islamic banking solutions.

HSBC Amanah´s corporate values:
In developing our products and services, we are committed to the highest Shariah standards in the Islamic banking industry. We constantly strive to address the needs and concerns of our customers. Our teamwork with HSBC colleagues around the world harnesses the knowledge and resources of HSBC Group for the benefit of our customers. We are an organisation that demands and rewards excellence. We maintain high ethical standards in our business relationships and invest in the future of our communities.
HSBC Amanah considers Shariah compliance of its business operations as its most important & strategic priority. This is reflected in its Corporate Values, "In developing our products and services, we are committed to the highest Shariah standards in the Islamic banking industry." In addition to Global Shariah Advisory Board and Regional Shariah Committees, HSBC Amanah employs a team of qualified professionals to ensure that the guidance and advice received from the Shariah Committees is implemented in letter and spirit.
HSBC Amanah Global Shariah Advisory Board
The Global Shariah Advisory Board (GSAB) advises HSBC Amanah on research activities intended for further development of the Islamic finance industry. GSAB comprises of representative scholars from all Regional Shariah Committees (RSC) of HSBC Amanah in addition to other Shariah scholars of international standing. The presence of renowned scholars from various geographies at GSAB will provide an opportunity to achieve further harmonization of Shariah standards and practices of Islamic Finance Industry. The following independent Shariah scholars are currently members of GSAB.
Sheikh Justice (Retd.) Muhammad Taqi Usmani (Pakistan, Sheikh Hussain Hamid Hassan (Egypt), Dr. Muhammad Achmad Sahal Mahfudh (Indonesia), Dr. Mohammed Daud Bakar (Malaysia), Sheikh Dr. Mohamed Ali Elgari (Saudi Arabia), Sheikh Nizam Yaquby (Bahrain),and Dr. Mohammad Akram Laldin (Malaysia)
HSBC Amanah operations are closely supervised by four Regional Shariah Committees (RSCs) in addition to a Central Shariah Committee (CSC). The CSC supervises HSBC Amanah businesses as well as operations in UAE, Qatar, UK, USA and Bangladesh. The CSC comprises of following well-known scholars: Sheikh Nizam Yaquby, Sheikh Dr. Mohamed Ali Elgari and Sheikh Dr. Muhammad Imran Ashraf Usmani.

HSBC Amanah operations in Saudi Arabia, Malaysia, Indonesia and Singapore are supervised by following independent RSCs.
HSBC Amanah has won the Euromoney 2005 awards for Best Islamic Wholesale Bank and Best for Private Banking Services.
HSBC Amanah has won the following awards:
Euromoney awards : Best International Provider of Islamic Financial Services (2004), Best International Sukuk House (2004), Best Islamic Wholesale Bank (2005), Best for Private Banking Services (2005).
Award-winning transactions : Emirates ECA-backed financing 2001, (Euromoney, Jane´s Transport Finance, Institutional Investor, Airfinance Journal), Government of Malaysia Global Sukuk - 2002,(Euromoney, Institutional Investor, Asiamoney, FinanceAsia), Emirates IV, with Islamic Development Bank - 2003 and (Jane´s Transport Finance)

Chrome Google: A New Web Browser for Windows

2008-12-13T02:34:00.000-08:00

Chrome is a Google browser design that combines advanced technology with a minimum so that the Web can be accessed more quickly, safely and easily.

download: http://www.google.com/chrome

World's first personal supercomputer unveiled

2008-12-12T07:46:00.000-08:00

Super computer for personal first in the world, which has 250 times the speed of the average speed of the PC will now be launched.

With the price tag of £ 4000 (exchange rate of 1 GBP = IDR 17588.81, meaning Rp. 70 million), Tesla supercomputer will be able to be purchased by consumers, but is expected to update the way scientists and medical professionals to be able to run their tasks better.

Advantages of these gadgets allow doctors to process the results of the scan brain and the body more quickly. This can help inform their patients in time than spend several hours a day if the tumor is found.

Scientists also believe that a supercomputer can help them find effective drugs for diseases such as cancer and malaria, more quickly than using traditional methods.

This is because they can perform simulations hundreds of thousands of times to create a list of drugs that have the potential to become effective medicines.

Until now, the system is a supercomputer that are made of thousands of machines that meet a room, which requires millions of pounds to create and maintain.

By contrast, Tesla personal supercomputers will be worth around £ 4,000 - £ 8,000, and will be seen as a normal PC.

David Kirk, chief scientist at NVIDIA, said: "How many do you process in the PC, including the stick will be more accelerated time with this supercomputer."

"Supercomputer this can improve the time needed to process information 1000 times faster!"

"If you can imagine to get the results that require times a week, you can only do it 52 times during the year. But the results only if the process requires several minutes, you can do it consistently and quickly, and can learn more in one day only. "

Supercomputer a new unit to process graphic ( 'graphics processing units) - the latest technology, which is claimed by some companies can provide a very fast speed for the home PC.

They were rushing to the UK consumer market yesterday, and will start to sell to the community and university science and research.

However, the PC manufacturer DELL, said will be too quick to sell supercomputer in bulk to consumers.

Eric Greffier, a DELL executive, said: "Previously, mobile phone sold very few, now we can not live without. It will apply to supercomputer same. They build the world's computer for a better future."

Colfax CXT3000

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By Murray Wardrop

Write Letters On The Water

2008-12-12T07:37:00.000-08:00

AMOEBA, Advanced Multiple Organized Experimental Basin

Recently, scientists have successfully created a device that can expose the surface of the water in alphabetical order, and for the first time we can write freely on the surface of the water. Researchers from the University of Osaka and research center Akishima Japan have found the instrument with the name ameba, Advanced Multiple Organized Experimental Basin.

Tools of this circular shape 1.6 meters in berdiameter, with a depth of 30 cm, consisting of 50 water wave system. The system produces waves of water waves through a circular motion above and below, if the waves this will become attached and form a line. This tool can write all the Roman alphabet letters and some Japanese or Chinese starch.

Each of the alphabet input into the letter to take more than 15 seconds. Researchers want the instrument is equipped with the technology acoustics, lighting and water fountain and will be marketed in the entertainment and hotel.

Why Syariah Bank Different?

2008-12-12T04:08:00.000-08:00

The first difference lies in the akadnya. In the Sharia bank, all transactions must be based on the contract that allowed by the sharia. Thus, all transactions must follow the rules and regulations that apply to the contract-contract muamalah sharia. In a conventional bank, the opening of the account transactions, both giro, savings and time deposits, based on the agreement points, but the principle points are not in accordance with the rules of sharia, for example wadi'ah, because the gyro products, savings and time deposits, promising benefits to the level of fixed interest the money paid.
Second, there are differences in the benefits provided. The Bank uses the concept of conventional costs (the cost concept) to calculate benefits. This means that the interest promised in advance to the depositor is a customer fee or fees must be paid by the bank. Therefore, the bank must "sell" to other customers (borrowers) with the cost of higher interest rates. The differences between them called the indicative spreads whether the company is fortunately or loss. If it spreads positive, in which the burden of interest charged to borrowers from higher interest rates given to depositors, it can be said that the bank's benefit. Conversely also true.
Meanwhile, the bank sharia use the profit-sharing approach, meaning that the funds received will be distributed to bank financing. The benefits of financing is split into two, to the bank and to customers, based on profit sharing agreement in advance.
The third difference is the target credit / financing. The depositors in the bank is not a conventional aware that saved money loaned to various businesses, regardless of halal-illicit business.
Meanwhile, the sharia banks, savings and the distribution of the community are limited by basic principles, namely the principles of sharia means that the loan can not be to such illicit business, gambling, drink underway, pornography and other businesses that are not in accordance with sharia.

Importance of Keyword Research in Link Building

2008-12-10T13:47:00.000-08:00

Keyword Research is the building block for search engine optimization. Search engines utilize keywords or key phrases to identify web pages which are relevant to these terms. Finding keywords / phrases which are relevant to your website and implementing them in your pages and links will help a search engine identify your webpage when a search is conducted for that particular keyword / phrase. Keywords have to be implemented on-page as well as off-page for higher ranking.

Building links is essential to gain more traffic and obtain a high ranking on search engines. But building links which are effectively optimized can score you extra points. Search engines analyze a link based on several factors, one being the text of the link itself. If your linking text, commonly referred to as anchor text, contains relevant keywords it indicates clearly what the link is connecting to. Likewise, your title text for each page should be clearly defined with relevant keywords.

Keyword research is not as simple as putting down a bunch of words which users may search for. Today people commonly use advanced tools to find appropriate keywords. Wordtracker, Overture Search Suggestion Tool and Keyword Discovery are some of the more commonly used tools. These tools will not only help you find keywords but will also help you determine the competition these keywords attract.

Using generic terms to optimize your website and links is not a smart idea. Keywords which are most commonly searched for will be used by several thousands websites; competing with these already established websites may not improve your ranking at all. It is important that you select keywords which are not overused. Include keywords which receive a fair number of searches but have minimal competition. Optimize your website with these keywords and once you have established yourself, you will have the liberty to include more general keywords.

These tools will help you determine synonyms or other similar words which fall into your category. When selecting less searched terms, one may always run the risk of less traffic. But this may be better than no traffic at all if the keywords used are highly competed for. One way to solve this problem is to go as specific as possible with your keywords. Instead of general terms such as ‘baby clothing’, you narrow it down by specifying location or age range or any other factor which clearly demarcates what you cater to. Today’s web searchers are a lot smarter and are capable of conducting searches with specific terms.

Any successful business runs by targeting a niche segment today. Catering to the general market may not reveal the same results. If one can identify their niche segment, then there is the opportunity of increasing the quality of your marketing efforts. Likewise when finding relevant keywords, select terms or phrases that target a niche segment. Use the advanced tools available to create a list of relevant keywords which do not attract too much competition in your niche segment.

Finding the right keywords is not as easy as it may seem. The success of your website may depend on traffic directed from search engines; and to figure on a search engine you will have to optimize your site with relevant keywords. It also does not end with optimizing your site once; one has to continually analyze the popularity of keywords and make appropriate changes to your website.

Keyword research plays a major role when building links. Instead of a ‘click here’, relevant keywords can be used to make the link more user-friendly as well as help the search engine detect what the link is connecting to. This can help you get a higher ranking for those specific keywords included in your link. It carries extra weight as another site is recommending your page for a particular keyword. Including relevant keywords in your title text and anchor text can improve your search engine placement tremendously.

Directory Maximiser allows you to vary your anchor text when submitting to directories to extract maximum benefit from keyword-targeted links.

7 Quick SEO Tips

2008-12-10T13:32:00.000-08:00

Search Engine Optimization (SEO) can seem like a daunting task to some. Especially when you are starting out. Search Engine Optimization requires a lot of time and work.

These seven quick tips are meant to help get you started on the endless road of SEO. Yes, it is endless. You must ALWAYS be optimizing your site if you want it to be and REMAIN successful.

Search Engine Optimization Quick Tips

1. Fresh Content. You must have more original content than non original.
2. Directory Listing. Submit submit submit.
3. Write. Write original content for your site and then submit to article sites.
4. Socialize. Blogs, message boards and social network memberships can help you get the word out about your site and products. NO spamming though!
5. Site Map. This will help visitors and crawlers find you and what you have to offer.
6. Stay updated. Keep yourself informed of what is going on in the world of SEO.
7. Consistency. A website is like a baby. It needs regular attention to flourish and grow.

Like I said, this is endless. If you want a website and you want it to be successful Search Engine Optimization is vital. Without a good SEO strategy you will fail. Websites do not magically become successful and gain high traffic. If they did then we would all be rich!

Successful websites require commitment, consistency, active involvement, originality, trial and error, continual Search Engine Optimization education and hard work. I believe that if you give it your all, you can't go wrong!

Turn to ECommerce Solutions For Greater Online Exposure

2008-12-08T00:01:00.000-08:00

The uses of e commerce have increased by leaps and bounds, shunning age old methods and tactics for developing online store solutions. Just by a click of the mouse, it has become possible to manage your online shopping carts and commercial transactions.

ECommerce solutions provide conveniences and time-saving methods for making business transactions and shopping online. They have made processes easier both for the buyer as well as the seller. Apart from product based eCommerce websites, service oriented eCommerce websites are also creating a rage worldwide. For example, banking, insurance, educational, web development services, and other services oriented business sites have emerged.

Several website design companies offer highly competitive and practical eCommerce solutions with powerful tools like shopping cart software. Today's time and money conscious customers want the best products/services, fair price, and a less time consuming medium to purchase them. Customer eCommerce solutions are a great source for getting these features. In creating a full-fledged and well-equipped eCommerce website, a number of web services are to be incorporated to get the desired results. For example, website designers, Hire a Programmer, SEO experts, advertising professionals, and graphic designers all need to work together to develop an effective and dynamic eCommerce site.

ECommerce addresses various issues like online queries, problems related to products, payments or shipping, managing inventory of online stock, and installing secure modes of payment.

ECommerce solutions are basically commercial transactions for different types of online businesses, such as business to business (B2B), customer to customer (C2C), and business to customer (B2C). More and more people are gaining awareness of the profits of eCommerce shopping cart solutions.

Hundreds of similar types of websites compete with each other online for an increased market share. A well reputed eCommerce solutions provider can give you access to a number of features including data transfer facilities, better data storage, security certificates, and more.

The advantage of a higher capacity of data storage gives a website the opportunity to display and exchange more information. As far as security certificates are concerned, it addresses issues related to secure and safe money transactions, purchases, wire transfers, etc. ECommerce shopping cart solutions make it easier to buy any item at virtual check out, and pay through mediums like PayPal or credit cards.

Lots of options for eCommerce shopping cart software are available online to select from. The choice should be made keeping in consideration your eCommerce needs and its functionality for your business.

Whole Life or Term Life - What’s the Difference?

2008-12-07T23:47:00.000-08:00

If you’re like most people, you don’t spend too much time thinking about death, or life insurance, but it is something that everyone should pause and consider once in awhile, especially if you are part of a family or group of people who rely on you either financially or for your other contributions on a daily basis. That is the purpose of life insurance - to enable those that you care about to continue on after you pass on to…other things.

Term Life

Term life policies are the simplest most straightforward type. Usually set for a certain period of time (5 years, 10 years, 20 years, etc.), this type of life insurance has the lowest premiums and pays a specified amount to your beneficiaries when you die. This type of policy simply allows your family to replace your contribution to the family (whether financial or otherwise) as well as take care of your final arrangements. Your premiums are set by the term you choose when signing up for the benefit and will not increase for the duration - though they may go up when the time comes to renew your policy for a new term.

Whole Life

Whole life insurance policies basically serve a dual purpose: They pay your beneficiary a set amount after your death as with term life insurance, however, whole life has the added benefit of building up a ‘cash value’ account at the same time. For this reason, premiums for whole life insurance are generally higher than just term life policies. This account is managed by the bank and with whole life policies you are usually free to cancel your policy at any time and receive the amount you paid into the tax deferred account back to you. Also with most whole life policies, sooner or later you will reach a point where you are completely “paid up” and no longer need to pay premiums (but are still covered for a death benefit).

So What’s the Bottom Line?

The Term life policy has its advantages in that you know your premiums will never increase, the premiums are generally very low, and the entire process is simple to understand. Whole life policies have an ‘added benefit’ of the cash account which is essentially tax-free savings up to a point. Also you know that after you’ve paid the increased premiums for a set time, they will go away. Whole life generally tends to be a “whole life” commitment to get the best benefit and value from it, while term life policies are for saving on your premiums and just being prepared for those sudden situations that may come up in anyone’s life. Whichever you choose, make sure you shop around for the best rate and policy that suits your needs.

Taken from : http://www.lifeinsurancerates.com/whole-life-or-term-life.html

Team Leadership

2008-12-04T19:45:00.000-08:00

‘A set of persons working together’. That’s a bald definition of ‘team’ from the dictionary, and it tells you all too little about the term in a business management context. You don’t know how big or small the ‘set’ has to be before it ceases to be a team. More important, you don’t know what ‘together’ means. Working in the same department on separate matters isn’t teamwork: that over-used word implies exchange of information, views, ideas, contributions, etc. That exchange should result in synergy, that magical process by which two and two makes five (if not more).

If true teamwork is achieved, the magic is real enough. The joy of working together is supposed to cement the collective power of a group of people - a power which, so psychologists aver, is greater than that of a single brain, however brilliant. The gains from that power, moreover, are by no means small. The American Society of Training and Development learned from 230 personnel executives that they had seen the following team-driven gains in performance in their companies: productivity, up 78%; production quality, 72% higher; job satisfaction, 65% up; time wastage, down 54%.

To cap all these solid internal achievements, the key index of external performance - customer satisfaction - had improved by over half. However sceptical you are about such surveys, and however amply justified that scepticism may be in general, few managers will want to challenge these findings. After all, they endorse the received wisdom. The more closely any set of persons works together, surely, the better that work must be. Irrespective of the results, moreover, ‘team’ has good, powerful, emotional correlations.

ORGANISATIONAL DEMERIT

No manager would boast of being a bad teamworker; that’s a demerit in any organisation. A good team, on the other hand, virtually defines good management. It is well-led towards precise objectives, decision and action alike are effective, communication is top-class, and every member works towards meeting those clear targets - for the group and for themselves. Nor would any manager deny that forming and nurturing teams of itself contributes to this high-level management.

All that being so, why is good teamwork so difficult to achieve? One answer is that sometime demon, human nature. Writing in the Harvard Business Review, two authors, Vijay Govindajarajan and Chris Trimble, study the case of CoreCo and NewCo - an established business and a start-up launched by top management in the pursuit of new growth. Everybody in both divisions shares an important interest in NewCo’s success. Yet the latter encounters obstruction rather than genuine cooperation from CoreCo’s people, who perceive that NewCo will.....

• cannibalise their revenues
• damage existing CoreCo products
• damage CoreCo business relationships
• damage bonus payments by its losses
• compete for scarce resources

In a word, then, it’s a matter of trust. CoreCo’s managers are deeply suspicious of anything the newcomer’s leaders may do; the presumed danger to the veterans’ established interests far outweighs the benefits, in their minds, that a new and vital business would confer on the group. As the authors remark, establishing trust between two very different outfits is the problem, compounded by jealousy:

‘CoreCo managers are jealous of NewCo… They have worked for years or decades to advance within CoreCo, and now CoreCo may appear inferior to a much younger…sexier division’.

The analogy with teams is obvious. In theory, the existing members should welcome new talent with open arms. The better the new recruit performs, the better the team will do - and, again in theory, team success is everyone’s primary concern. In practice, however, that demonic human nature will rear its ugly head.

Just like the CoreCo veterans, established team managers will feel threatened. In a bizarre twist, the new person’s failure may be more welcome to the envious colleagues than his and the team’s success.

DISRUPTIVE RIVALRY

This is by no means theoretical. The HBR authors cite the troubles which beset New York Times when it was tempted, like most media owners, by the promise of the Internet. ‘Tensions rooted in rivalry’ proved disruptive and interactions took on an ‘us versus them’ undertone. The net people aimed to be ‘fast moving, anti-bureaucratic, risk-taking and experimental’. The Times newspaper staff resented the implication here that they were sluggish, bureaucratic, risk-averse and tied to ‘the way we do things round here’.

Which they probably were. Companies are most commonly formed on divisive lines which entrench the status quo. Bureaucracies serve hierarchies of power. Where the matrix rules, product, geography and function have hardened into strong and separate baronies. The company may be decentralised into ‘strategic management units’: under that or any other name, these profit centres are walled off from what should be corporate partners.

Very few businesses are truly entrepreneurial, with flat structures and a pro-risk culture, and even fewer are truly people-based, giving the employees ownership of their jobs and full responsibility for execution. Yet this is the wave of the future, and the reason why the role of teams in management is clearly and strongly rising in importance. The significance of the NewCos is waxing while that of the CoreCo is waning. And NewCos are the natural ground for team working, which expresses the positive aspects of human nature in groups.

Benign human nature, economic trends, key management principles and technological change all point in the direction of more and better teams. Man is a gregarious animal to whom group loyalties are very powerful - witness the devotion in all social and economic classes to football clubs with which the fan may have no link other than his loyalty and whose teams are largely composed of multinational mercenaries who have no loyalties themselves.

LOYALTY DRIVE

Harness the loyalty drive of its members to any company team, and you maximise the benefit from their collective power. You need that power to exploit the new opportunities which must be taken at a time when core activities are being commoditised, outsourced, pooled, etc.

Even if they remain cash cows, the milk is less rich; and bovine businesses are no match for rising stars. The latter’s rise, however, will be slowed and even frustrated unless entrusted to truly independent teams.

The difficulties reported in the HBR article explored above frequently hinge on misplaced efforts to restrain the NewCo’s freedom of decision and action. At Corning a new venture in micro arrays for handling DNA samples had a rough passage for two years: ‘All of CMT’s troubles’, the authors comment, ‘were probably inevitable from the moment CMT adopted Corning’s organisational design.’ At New York Times, success on the net only followed when ‘company leaders carefully monitored interactions with the newspaper’ - basically to stop the latter from strangling the infant in its crib.

It makes no difference whether a team is building a lasting new entity (as in the above cases); tackling a major issue that is intended to cease (like putting two companies together after a merger); combining back offices of separate businesses in an outsourcing move; or running a drive to improve production quality.

In any operation, the likely best approach is to build units around a discrete activity and then divide the overall project into the most efficiently manageable sub-units, teams in their own rights and themselves managed on the same principles of delegation and autonomy. Stand-alone project management is the prime example of teamwork, and has of necessity spread fast throughout the corporate world. While there are many other possible areas of teamwork, from the boardroom to the finance department, the more they share the stand-alone virtues the better.

The starting point naturally comes first - a purpose. Why has the team been created? In the justly famous case of IBM’s Personal Computer, the object was not just to develop a rival to Apple in this new computing market, but to do so at unprecedented speed, while offering significant improvements in the technology.

The fact that it was a crash programme proved to be a major asset. That always gives the project a driving urgency and enables a team to sweep potential constraints out of its way - here, independence even embraced freedom to break IBM’s insistence on making and buying all components in-house.

PHENOMENAL WORK

The world-changing rise of personal computing, however, drew heavily on the phenomenal work of an even greater team, the Palo Alto Research Center established by Xerox. Although its aims were grand and relevant - to combine the many Xerox technologies for a great leap forward into a new age - PARC lacked the focus of IBM. Nobody knew exactly what the lab was supposed to achieve. When the prototype PC emerged from the combined brilliance of the team, nobody knew what to do with the wonder. It didn’t fit mentalities developed to make and sell copiers.

Team purpose should be very precise and germane to the business: and the bigger the objective the better. Think small, and you’re liable to end small. Think big, and you may well be most agreeably surprised: self-fulfilling prophecies are the best forecasts of all. To its own amazement, IBM was swamped by the totally unexpected flood of orders for the new PC. In many other companies and cases teams given unreasonable aims have greatly exceeded the expectations of their sponsors. Thus NCR’s engineers in Dundee, asked to double the reliability of ATMs, trebled it and set the company on the way to world leadership.

One vital asset of team purpose is that it can be shared. It’s the keystone of participation, which in turn breeds total commitment, both to the overall plan and to the agreed sub-plans needed for the whole. It tells all the team members where they are going and why – from the bottom to the leadership at the top. The leader, of course, is the chief custodian of the purpose and is responsible for seeing that the team members, and the team as a whole, achieve the desired performance. Do not forget: teams exist to produce superior outcomes.

In obtaining their good results team leaders turn into conductor rather than driver, enabling others to play the right music, not by hands-on domination of all decisions and execution, but by providing inspiration, invigilation and stimulus. Dominance obviously fits ill with what should be the collective ethos of the team. Its leader is, or should be, primus inter pares, a first among equals; not the typical CEO, who is primus - and never mind about the equality.

Another article in the HBR identifies seven types of leadership, only one of which mentions teams. That’s the Achiever, who ‘meets strategic goals’: he/she ‘effectively achieves goals through teams’. You would suppose this character to be the hero of authors David Rooke and William R. Torbett. Not so - even though, when it comes to implementing the strategies, the Achiever significantly outdoes the Opportunist (‘wins any way possible’), the Diplomat (‘avoids overt conflict’) and the Expert (‘rules by logic and expertise’).

But the Achiever in turn is beaten to the performance punch by three others: the Alchemist (‘generates social transformations’), the Strategist (this type ‘generates organisational and personal transformations’), and the Individualist (‘interweaves competing personal and company action logics’).

OBVIOUS PARADOX

The paradox in this classification is obvious. How can any of the other six types perform well without the Achiever’s ability to effectively achieve goals through teams? For that matter, how can the Achiever succeed without deploying the powers of the Diplomat, etc? And why does the Achiever account for 30% of the research sample, three times as many as those described as Alchemists and Strategists, if the latter are ‘most effective for organisational leadership’?

The questions recall Meredith Belbin’s first, famous account of the seven roles needed for team success: coordinator, ideas person, critic, implementer, external contact, inspector, team-builder. Somebody has to fill each role, and the team leader (a role not identified with any of the seven) has a part to play under each heading. The same truth applies to the Rooke-Torbert types. The Achiever-leader plays many parts, but only in part. The rest is delegation. That’s what gives teams their special strength and their pole position in today’s races for success. That demon, human nature, has many facets, good and bad. The well-led team of well-chosen, well-deployed people negates the bad and accentuates the good - and everybody wins.

Management Advice

2008-12-04T19:43:00.000-08:00

Advice is plainly a highly desirable commodity - if it’s good advice. Everybody will at several points in their careers ask for, or receive gratis, advice, whether professional management consulting or friendly words of wisdom - real, supposed or plain dubious. So it was a great idea of Fortune magazine to ask 29 career stars, mostly business people, to identify the best advice they had ever received; the words that had most influenced them on their several ways to the top.

In fact, advice, like so much else in management, has become institutionalised in recent years. Mentors, coaches and councillors have always operated at the lower levels of business, but paid providers are now to be found advising at much higher levels. The analogy is obvious. If a tournament-winning golf pro, or any other athletic star, employs a full-time coach to improve his brilliant game, why shouldn’t a CEO have the same assistance, as he or she goes about their difficult (but highly paid) task?

There’s nothing new about top hands requiring helping hands. Business history contains several examples of executive suite partnerships in which one of the partners (usually a super-boss) was far more equal than the advisor. One such tycoon (so I recall) called his right-hand man ‘my day wife’, which described the relationship rather neatly. In politics too the concept of the ‘eminence grise’ advisor is well-known - the wise and devious grey eminence who lurks in the king’s shadow and under his protection.

PERSONAL SUPPORT

Many executives have used top management consultants, who are very eminent and often grey, as personal support systems. It’s by no means a bad choice. The people who get to the highest posts in consultancy are highly intelligent, enormously well informed about the practices and pranks of other chief executives, skilled at recognising situations which are repetitive, and quick at getting on to the client’s wavelength. The relationships can last for years – as demonstrated by Peter Drucker, the greatest of mentors.

Two of the Gang of 29 swear by Drucker, including author Jim Collins (who learnt from a day with the grand guru that ‘The real discipline comes in saying no to the wrong opportunities’). And church founder Rick Warren still likes to ‘go sit at the feet of Peter Drucker on a regular basis’. Many business leaders have found those feet (now 95-years old) equally inspiring. Some of Drucker’s great store of wise anecdotes stems from these encounters.

Thus, he used to advise a New York banker once a year at meetings where, no doubt, they exchanged views and ideas about the financial system in general, and the bank’s management in particular, to great effect. But Drucker noticed two odd, extraneous things - that the meetings always lasted exactly an hour and a half, and that they were never interrupted.

When Drucker asked for an explanation the banker replied that experience had taught him that meetings were never useful after an hour and a quarter, because people began to repeat themselves. So at exactly that time he would ask the other party to sum up, which took quarter of an hour.

And the lack of interruptions? ‘While we meet my secretary is under orders only to put through a call if the President of the United States or my wife should ring. The President seldom rings - and my wife knows better’.

Note that here the highly disciplined banker was turning the tables, advising his advisor. Much advice is of this kind - the offer of one person’s experience as a guide to the better performance of other people. There is a very human tendency to believe that if someone else’s success has involved a particular method, that method must have some direct connection with the success, and by repeating the method, you increase your chances of being equally successful, at least within your own terms.

ASLEEP AT THE WHEEL

That argument is appealing, but flawed. Super-tycoon John D. Rockefeller I's habitual pose in meetings was prone - he would lie on a sofa with his eyes shut, saying nary a word, apparently asleep, but listening intently behind his closed eyes.

I don’t suppose for a moment that Rockefeller’s billionaire fortune would have been one cent smaller had he kept his eyes open or sat at the table like the others. But his eccentricity served three purposes: it set the boss apart as an unusual individual whose eccentric ways had to be respected, it reminded everybody there of the sovereign importance of listening, and it kept the great man from dominating the discussion - as great men are wont to do.

So the Rockefeller story is really a parable. What he did was less important than what it conveyed. There are some good examples of parable in the Fortune article. The best advice ever received by Vivek Paul, the brilliant Indian businessman who turned Wipro Technologies into a global force, came from an elephant trainer in the jungle. The elephants were large, but tethered to small stakes. How come?

The unlikely guru explained; ‘When the elephants are small, they try to pull out the stakes and they fail. When they grow large, they never try to pull out the stake again’. Paul drew from this strategy a powerful lesson; that ‘we have to go for what we think we’re fully capable of, not limit ourselves by what we’ve been in the past’.

POWER OF THE PARABLE

Note that the power of the parable doesn’t lie in the story itself, which isn’t especially arresting, but in Paul’s interpretation - and still more in the ambitions he proceeded to form and turn into remarkable deeds. To receive really good advice, in other words, you must be a really good advisee. That requires LLL, PPP, AAA:

1. LLL: Listen, Look and Learn

2. PPP: Priority of Powerful Purpose

3. AAA: Act , Advance and Achieve.

Paul’s story is an especially convincing demonstration of the threefold advisee kit. How many bicycle tourists in that Bangalore jungle would have noticed the size of the stake or questioned the trainer? Every day everybody, metaphorically speaking, walks past an elephant, notices nothing, and asks no questions.

You can’t, of course, follow up every elephant and cross-examine every trainer. In my latest book, Seven Summits of Success, co-written with the famous mountaineer Rebecca Stephens, she tells a parable about filling a bowl with stones of various sizes. An Eastern guru uses this humble operation to put across a high lesson: Put the important things first. They have to be important to you, well worth doing, and purposive; that is, they convert into the third stage, the AAA of Act, Advance, Achieve.

People like Paul, of course, have the Triple A built into their genes. Jack Welch, the 20-year hero CEO of GE, must have told many others about his habit, on landing in New York, of imagining that this was his first day in the chair, succeeding ‘a real dud’. Like all the others who heard this, Paul listened to the Welch questions; ‘What would I do that was different from the guy before? What big changes would I make?’ But how many others, having heard Welch, promptly decided, as Paul did, ‘to zero-base myself’ every Christmas?

Welch’s own best advisor, a business acquaintance, told him to ‘Be yourself’; that is, remember how you got where you are, and don’t pretend to be someone else, especially when you get all the way to the top. The background of your best adviser, to judge by the Gang of 29, is most likely, like Welch’s, to be business. That may be coincidental; fathers or bosses are obvious and frequently excellent sources of advice; the former are often in business, the latter, of course, always. Both types are likely to be father-figures, even when there is no parental connection.

LOVE THAT JOB

However, the authentic father-figures are no use if they act the domineering, prescriptive parent of fact and fiction. Rather, the good ones encourage offspring to do what they really want. Anything else would contradict an attractive theme that runs through the 29, epitomised by TV anchor man Ted Koppel (‘Do what you love’) and ad-man Donny Deutsch (‘If you love something, the money will come’). The burden of Drucker’s invaluable advice to author Collins was to give up any idea of starting his own organisation and concentrate on what he would enjoy most.

There are other wise and pragmatic counsels among the 29 - one of them in reverse. Warren Buffett stepped on the road to the world’s greatest investment fortune by disobeying, not one mentor, but two: his guru and teacher, Ben Graham, and his own father. In 1951 both men advised young Warren that the stock market was too high, and that he should stay clear. He disobeyed - but in doing so followed their most important advice, which most people find exceptionally hard.

‘You’re right not because others agree with you, but because your facts are right’. The words are Graham’s, but the thinking is fundamental. In management, as in all life, there is at any given moment an accurate, factual description of events which can be discerned and described by logical analysis. The nearer you can get to that truth, and the closer your actions to what the truth demands, the better you will do - in anything.

Andy Grove, Intel’s genius CEO, followed this faith when his life was threatened by prostate cancer. Experience as a trainee engineer had taught him, in his professor’s words, that ‘When “everyone knows” something to be true, it means that nobody knows nothin’. That was the case with Grove’s cancer; he did all his own research - and survived.

Reduced to one-liners, some of the other advice received by the 29, while sound as a bell, hardly ranks among the World’s Great Thoughts. ‘Balance your work with your family’: ‘Let others take the credit’: ‘Have the courage to stick with a tough job’: ‘Don’t listen to nay sayers’: ‘You can learn from anyone’. You might find these in a cracker, but you couldn’t build a career on them - not even ‘Recognise the skill and traits you don’t possess, and hire people who have them’.

That sounds like a statement of the obvious, even when you know that, uttered by the leadership guru Warren Bennis, it had a great influence on Howard Schultz of Starbucks - who has used Bennis as a (presumably paid) adviser for many years. Enough of the 29 have such relationships to confirm, as noted earlier, that having a professional mentor is no fad. As your career matures, the frank advice of someone you trust is an antidote to arrogance, prejudice, inability to face uncomfortable truths and perplexity.

SPECIFIC ADVICE

Professional advisors can also be superb mentors. Sumner Redstone, the omnipotent boss of Viacom, has known and used Ace Greenberg of bankers Bear Stearns for over 15 years. But I’m sure that Greenberg’s specific advice on Redstone’s deals was more valuable than this; ‘Follow your own instincts, not those of people who see the world differently’. Redstone is an exemplar of common traits of the 29. They know who and what they are, trust their instincts, and rarely need any second bidding to follow them. Nor should you.

Two thoughts stick out, though. Klaus Kleinfeld, the new head of Siemens, always envisions the outcome of his proposed actions two years on. He’s right to do so.

And what advice does Peter Drucker, mentor of mentors, value most? That of his first editor, who told him, in effect, ‘Get good - or get out!’ Advice learnt in youth thus stays a long, long time - but it’s the value of how you use it, not the advice, that truly counts.

Management Teams

2008-12-04T19:41:00.000-08:00

Suppose that every organisation had within it four teams, each of which had a specific task. People on these teams would have other roles as well, but would work together as a team for the specific role of that team. The focus of each team would be distinct, and it is important that this distinctiveness is preserved. The rigidity of this team structure might surprise those who believe that creativity should be free and unstructured.

Team one is the values team. The role of this team is to find and figure out values that matter. Values might be permanent or temporary. Values might change. There might be trends. There is a certain amount of sense in asking focus groups, etc. to indicate their values. Such a process is usually not very productive, because people are good at pointing out what is wrong, but they are not so good at designing new needs and possibilities.

It may be useful to try out values designed by the design team on focus groups to see if such values are acceptable or desirable. This is different, however, from asking the group to come up with values.

My book Six Value Medals would provide a broad framework, but within this framework there would be a need to design specific values. Another book of mine called Supertition could also be useful in the design of values.

Values might arise from social observation. Values might be triggered by changes in technology. For example, the development of mobile phones creates a whole range of new values and possibilities.

Technology might even create negative values, and then there will be a need to get rid of the negative values.

For example, there might be a growing need to look at ‘privacy’ and ‘tranquillity’.

• How can you be undisturbed but not detached from the world and those who need to contact you?

• How can the value of dieting be combined with the value of enjoying your food?

• How can the value of comfort in travel be combined with the value of excitement?

• What are the values inherent in the investment process?

Team two is the idea team. The idea team takes the defined values from the value team and seeks to design an idea that would allow defined values to be delivered in a practical way. It isn’t just a matter of delivering the values, but of delivering them with sound business management skills and in a way that is good business sense. There has to be profitability and there has to be cost control.

It is possible to define values in a very broad and general way. It is also necessary to define values very precisely. It is not enough to say that you would solve a problem by finding ‘a suitable solution’. There is a need for ‘valufacture’ (a word I created to describe the creation of value).

The idea team takes the defined values from the value team and seeks to design an idea that would allow the values to be delivered in a practical way.

It is not just a matter of delivering the values, but of delivering them in a way that makes business sense. There has to be profitability and there has to be cost control.

This team has a real need for formal creative processes such as lateral thinking. The goal is clearly defined: how can we deliver the specified value?

At first this separation of ‘value design’ from ‘idea design’ might seem artificial, but it has the practical merit of defining targets more precisely. In too many cases a creative person has an idea and then looks around to see what value it might deliver. Here the process is reversed.

If the value is ‘instant viewing of photographs’, then the idea team might think in terms of Polaroid photography or stand-alone digital printers, which can print the photographs from your digital camera cards immediately.

Team three is the implementation team. At first it may seem that this function duplicates the ‘idea team’ function. At times there may be an overlap.

If the idea team comes up with stand-alone digital printers, then the implementation team looks into the availability or possibility of these. The implementation team would also do the decision making on who would own and service these machines.

• Would they be in stores or on their own in shopping malls?

• What existing organisations might be interested inco-operating in the matter? - and so on. Implementation has to go into detail in a very specific way. It is not enough to say: ‘there would be a way of doing this’. The specific way would have to be spelled out.

• How is it going to be done?

• Who is going to pay for it?

• What might the problems be?

The implementation team needs to be able to answer all such questions in a detailed and specific way. There may be a need for new creative ideas in the way that an idea is implemented. There may even be a need to modify the original idea to allow it to be implemented in a particular way.

Team four is the assessment team. There has been a defined value. There has been an idea for delivering that value. There has been a specific suggestion as to how the idea might be implemented. The assessment team can now look at the whole picture.

• Will the idea work?

• Will the idea be acceptable?

• Are the costs acceptable?

• Will the idea be profitable?

• Will the idea be durable?

• How strong a competitive advantage does the idea provide?

Many of these questions will already have been considered by the preceding teams, who may be asked to give their answers to the questions.

The assessment team is not just a critical team. It is the team which can look at the total idea. The team should function in a positive and constructive sense. Where necessary, modifications might be suggested. The assessment team should contain creative people as well as number-crunchers.

FUNCTION

The proposed teams - Value, Idea, Implementation, Assessment - work separately, but together: like the four legs of a horse or the four wheels of a car.

Another analogy might be the human digestive tract. Each part does its prescribed job and then passes matters on to the next section.

The clearly defined function of each team clarifies the thinking and ensures that every aspect of an innovation is fully considered.

Creative Thinking Techniques

2008-12-04T19:39:00.000-08:00

Some months ago a Nobel prize economist told me that at the top level economics meeting in the US they had been using my Six Hats method. This is now in wide use around the world because it is so much better a way of exploring a subject than argument wandering discussion. Meeting times are reduced to one quarter or even one tenth of the normal time. Most important, every person present has to contribute fully - not just in the usual critical mode.

The purpose of thinking is to enjoy and to deliver our values. But what are those values? Everyone is aware of the importance of values. If pressed, almost everyone can spell out the values that matter. There is a lot of ‘lip-service’. There is almost as much lip-service about values as about creativity and innovation. These things are important but talking about them is much less trouble than acting on them. To be seen to consider all values is what matters most.

Values are vague, general and poorly defined. We know what they are and we can recognise them, but looking for them is not easy because they are far from concrete. Why do we give names to vegetables? You would recognise a tomato even if it had no name. It would not be so easy to go into a greengrocer and ask for ‘those round red shiny vegetables that we use in salads’. It is very much easier to ask for ‘tomatoes’.

PERCEPTION

Perception is a key part of thinking. Research at Harvard has shown that 90% of the errors in thinking are errors of perception. Improving perception through my thinking programmes in schools has a dramatic effect. In one case, teaching this thinking to youngsters in a special school, which took youngsters too violent to be taught in normal schools, reduced the actual rate of criminal convictions over a 20-yearperiod to one tenth of the rate for those not taught thinking. This is powerful stuff.

With perception we can only see what we are prepared to see. The untutored eye looking a painting sees only that the painting is agreeable. The art critic can focus on the composition, the space, the brushwork, etc. etc.
In watching a game of soccer you actually see much more if you know some of the possible plays and can then see them in action.

If a person who is born blind is suddenly enabled to see then it takes quite a while for that person to see things. The brain has to get used to recognising shapes and forms. It is very much the same with values. Unless we have a clear picture of the different values it is not easy to see them.

Furthermore, it is not enough just to see values. We also need to talk about them and to discuss them. We
need to compare the different values in alternative courses of action. The Six Hats provides a language for talking about thinking and the new framework provides a means for focussing on values and talking about them. The new framework is THE SIX VALUE MEDALS. The metaphor of the ‘medal’ has been chosen because a medal is a reward. In the same way, if you deliver value you deserve a reward.

GOLD MEDAL

The Gold Medal represents ‘human values’. These are the values that matter to people. There can be positive values and also negative values. Being ignored or humiliated are obvious negative values. Being appreciated and having your contribution recognised are positive human values. When GE asked its creative people what reward they wanted for creative effort, the simple answer was ‘recognition’. They wanted someone to recognise they had contributed an idea.

SILVER MEDAL

Silver Medal values represent ‘organisation values’. Most often it would be a business corporation but organisations can include families, governments, clubs, teams, etc. The most obvious Silver Medal value is survival. If the organisation does not survive then not much else matters to that organisation. There maybe a clash of values if the ‘shareholder’ group wants the organisation wound up. There are obvious Silver Medal values like profits, market share and brand equity. Having happy and hard-working employees may need to combine Gold Medal values with Silver Medal values.

STEEL MEDAL

Steel with poor quality is poor steel. The Steel Medal values are directly quality values. Quality means that whatever is being done is done with quality, whether it is a service or a product. Quality means fulfilling the desired or offered function. A camera which takes poor quality pictures is a poor quality camera. A cafe with very slow service is a poor quality cafe. There are many programmes directed at quality management and improvement and most of them do a good job. The Steel Medal Values area way of recognising such values, not an attempt to teach how to get them.

Again there may be a clash of values. Improvement in Steel Medal values might mean an increase in production costs (like employing more people in the cafe) and this may impact Silver Medal values by reducing profitability. In the long run, however, poor quality will affect Silver Medal values through loss of business or losing out to better quality competition. If we believe that quality is essential then there is no clash of values at this point.

OTHER MEDALS

There are three other medals. The Glass Medal is for innovation, creativity and change. The Wood Medal is for ecological values in the broadest sense - not just nature. The Brass Medal is for perceptual values because brass looks like gold but is not. These other medals are described in more detail in the book SIX VALUE MEDALS (published by Vermillion Press in the UK, March 2005).

One of the advantages of having a perceptual framework is that it becomes possible to lay out the values in a ‘value map’. This means that comparative values may be seen at a glance. It becomes possible to see where the values are strong, where they are weak and where they are negative. Two such value displays are suggested in the book.

The idea of a ‘negative’ value is really a contradiction in terms, because values are seen as positive. But if we take the broader view of values as something which ‘influences’ or ‘has an effect’ then that effect may be positive or negative. There is no need to indicate the positive values as such but there is a need to indicate ‘negative’ values.

To describe negative values as ‘harm’ or ‘danger’ is weak and makes it difficult to see all the different values at a glance. Having the concept of positive and negative values makes it possible to scan them all on the same sheet.

LABELS

As people become familiar with the Six Value Medal system, the values may come to be referred to simply as ‘Gold Values’ or ‘Steel Values’. There is no need to keep repeating the ‘medal’ part.

The importance of the labels is that they provide a perceptual framework which makes values more tangible. The framework also allows us to focus more clearly on the different values and so to see where they are strong and where they are weak or even negative.

Business Ideas

2008-12-04T19:36:00.001-08:00

Any managements which don’t find the present day challenging must be either very lucky or completely comatose. It doesn’t matter whether the business is a long-term, high-tech growth star, like Finland’s Nokia, or a solid, stolid retail empire, like Britain’s Marks & Spencer. Get your present-day strategy wrong, and retribution, as in those and many other cases, is swift to follow. The marketplace, the media, and the financial markets turn on former heroes with a vengeance – and this reaction, of course, only intensifies the pressure on those who have lost their way.

Note that these observations apply to present-day strategy - how companies are managing in the here and now, and never mind the problematical future. But if managements are unable to meet the challenges that surround them now, tangible and visible, they can’t offer much hope of surmounting the much harder challenges of the future. The future, remember, cannot be known. You can make intelligent predictions. But you don’t know whether they really are intelligent until much later - which will often be too late to avert catastrophe.

NOWHERE TO HIDE

Thus Nokia can’t be excused for missing the threat posed by the union of Sony and Siemens in mobile phones, or the possibility of a resurgence of its major Scandinavian rival, Ericsson. Nor can M&S hide from its culpability in missing the challenge created by its customers and competitors as the former responded to faster-moving fashions and more stimulating formats - the creations of newer and fresher minds and eyes that the old champion could deploy.

Yet both companies can be forgiven in theory (they won’t be forgiven in practice) if their vision of the year 2014 proves to be hopelessly wrong. The decisive phenomenon of the present-day is the revolution in information and communications technology (ICT). The digital onrush has created an entire new economy which impacts on the old economy at every turn. But the significance of the World Wide Web couldn’t be surmised until it existed, and even then the correct response to this marvel was evidently difficult to devise. The dot.com bust wasn’t a failure of the technology or the systems, but a result of profound misunderstanding and crass mismanagement.

The challenge for managers is therefore to manage the present better - much better - as preparation for the unforeseeable. Companies have no option but to live by the old Boy Scout maxim, Be Prepared. And that is what ties present and future together.

After correctly recognising and interpreting what is happening now, inside and outside the firm, you can at least ensure that the present nature and standards of management are appropriate and effective.

That’s the foundation on which you build the future - not on forecasts of the future as a whole, but on ideas strong enough to create your very own future. Nokia, as it happens, is a rightly famous example of doing precisely that - throwing away the entire contents of a ragbag of businesses to concentrate on the one market where it had the chance of developing real competitive edge. Its continuous stream of innovations both stimulated and satisfied demand. In doing both, Nokia closed the gap between the dreary present it knew and the golden future which it wished to achieve.

CREATING YOUR FUTURE

Closing the gap, however, applies to other key aspects of today’s management challenge. To create your own future, you have to close the gap between generating ideas and achieving results: and that also means closing the large gap between the typical organisation’s current behaviours and those that foster ideation. And that is something that the typical manager finds difficult - and shouldn’t.

Here, for example, are what I diagnosed as ten prime attributes of a critical Nokia supplier: ARM, designer of 75% of the silicon chips used in mobile phones. ARM’s attributes offer further penetrating insights into the 21st century ‘Ideas Company’.

1. Get the business model right – and keep it that way
2. Make the customers into real and treasured partners in the business
3. Honour and reward the innovators
4. Foster - and never lose - a desire to survive and succeed
5. Develop new ideas to attack new markets
6. Give R&D its own special place in the organisation
7. Ensure a proper balance between current development and future research
8. Make sure that there’s a place and hearing for whacky and far-out thinking
9. Create closely knit teams of people at all levels of the company
10. Regard challenges as the source of the best opportunities - and take them.

Are any of those policies ones which would strain your organisation? Do you consider any of them wrong-headed, or dangerous? On the contrary, the ten are not only practical and beneficial; they constitute part of the template for the Ideas Company, the one that can create its own future.
But there’s another question: how many of the ten actually feature in the management of your workplace?

My educated and experienced guess is that very few established companies practise more than a handful of these behaviours. They may have a business model, but it will be much the same as that of the competition, providing no useful edge, let alone a transcendent one.

Despite many fine words about customer relations, these are often antagonistic. Firms pay lip-service to innovation, but little else. Unorthodox thought and thinkers are equally important - but ignored. And if meeting the challenges involves disruptive action, it will be delayed as long as possible - too long.

GROWN-UP START-UP

True, ARM is a grown-up, high-tech start-up that doesn’t have the historical lumber or organisational deadweight that hamper businesses of greater age and slower-moving technology and markets. But weren’t the gee-whiz digital growth stars supposed to become the models for the 21st century company? Of course, many stars were nothing like what they were cracked up to be. But their speed of reaction and innovation was and is real enough. And that speed is in itself armour against the unexpected: i.e., the future

For a complete contrast, I visited a company that is about as far from ARM as you could find. It is old-established (1876), sells a very traditional product (English ale), and is largely confined to one area, the East of England(whose Development Agency commissioned my three studies). ARM is a public company that has been riding the high-tech seesaw. The brewer, Charles Wells, is private and family owned. As for the future, not long ago it didn’t seem to have one: giants were mopping up the independents.

So what behaviours had kept the company thriving and growing?

1. Base new development on a foundation of lasting and relevant virtues.
2. Make continuous improvement over time the basis for radical change.
3. Build the brand – manage both the corporate brand and the products.
4. Be old-fashioned about good financial house-keeping and strategic prudence
5. Be innovatory about everything else, with new projects at all levels and in all activities.
6. Don’t insist on being first – but insist on being best.
7. Be very patient but extremely determined in breaking new ground.
8. Keep close to the customers and develop new ideas around satisfying their needs.
9. Involve staff fully in the company’s strategy and its progress.
10. Have a unifying and bold ambition to which everybody can respond.

The difference in flavour between ARM and Wells is evident - as you would expect, given the differences in their markets, products, ownership and history. That expectation is in itself an important point. My recent book, The Fusion Manager, made this point most emphatically - that there is no one right answer, only the best answer you can produce at the right time.

Neither of these two companies is run by theorists, but both are essentially pragmatic. They follow the philosophy of a stock market professional I once knew: he never acted on predictions, but only followed ‘money on the table’ - the amount of cash investors were actually placing on their bets.

THE PERFECT COMPANY

That doesn’t sound very clever, but it made him exceedingly rich. Yet there is a valuable place for theory and experiment. At HFL, my third subject, the astonishing aim is to create ‘The Perfect Company’.

This is, of course, impossible, since perfection is not given to man. But the pursuit of perfection is eminently feasible, hard to better as an animating, driving force.

The bedrock of HFL’s business is bio analysis, primarily testing racehorse and greyhound samples to check that no illegal substances have been used to enhance the animal’s performance. Since scientific perfection is within reach, the work is a good match for HFL’s ceaseless and many-sided search for perfect corporate performance. The ten key principles I found there are vigorous and vital.

1. Set all targets and ambitions at the highest feasible pitch.
2. Use every available channel of communication, and invent ones of your own.
3. Make voluntary activity a critical element of the ideas organisation.
4. Use IT as a positive means of storing and exchanging ideas.
5. Lead from the top, but to animate and facilitate rather than command and control.
6. Relate all innovatory activities to the strategy and the economic performance of the business.
7. Look for new ideas in management and people policies, not only in products and processes.
8. Use informal methods to reinforce the formal elements of the organisation
9. Never be shy about ‘creative swiping’
10. Invest in people’s personal as well as their professional development.

MORE AVANT-GARDE

As noted, this list is more avant-garde than at ARM or Charles Wells: yet it’s hard to believe that the other two managements could not subscribe to the HFL policies.

Investing in your staff’s personal development is obviously a sound idea, for instance. So is the stress on communication, and the openness to new ideas in all departments. So is making the intranet into the digital lifeblood of the company. Recognising the high value of these policies, however, is one thing. Putting them into action is quite another. It’s the gap-closing issue again - closing the usual gulf between good intentions and inadequate, or even absent execution.

You may feel that the pressures of business leave no room or time for doing all these desirable deeds. But the future will not wait for you to catch up. These three companies share three crucial pillars – unreasonably high ambitions, shared by everybody; people-centric management, pervading all policies and processes; and determination to build their respective Ten Commandments into the fabric of the organisation - ’the way we do things round here’.

That cannot be done overnight. When you embark on the creation of a company fit for the future, you are looking ten years ahead. In other words, you are also committing the whole organisation to attitudes and approaches that are designed to achieve effective change right through to 2014. That isn’t futurology: it’s ‘the way we’re going to do things round here’.

Strategic Planning

2008-12-04T19:35:00.001-08:00

Management Strategy 2

2008-12-04T19:34:00.001-08:00

One advantage of having a very long memory for strategic management (and mismanagement) is that you can check the allegedly heroic present against the foolish past. But long memories are scarce in this field.

Royal Dutch-Shell can thus more easily promote its current top-level reshuffle as a sweeping, radical modernisation, bringing the blessings of ‘clarity and simplicity…efficiency…accountability’; and, of course, conferring much credit on its authors.

The reality, however, is that the architects of reform had been deeply implicated in perpetuating a system that was unclear and complicated, inefficient and inadequately accountable. Radical reformation only followed in the wake of the oil reserves scandal - the deliberate misreporting that cost the chairman, Sir Philip Watts, his job. It is, of course, right and proper that the chief executive should pay the price of such monumental error. But that isn’t what happened - for Watts was not the chief executive.

Nobody was, believe it or not. The unusual split of the group’s ownership between the Dutch company (representing 60% of the equity) and the British was reflected by two boards, two equities, and two chairmen. True, the operating interests were combined under the banner of Shell Petroleum. Its managing directors (usually seven in number) acted as a kind of collective CEO under the leadership of a ‘senior managing director’: but that ramshackle set-up was hardly fit for the 21st century.

INFLEXION POINT

How could so extraordinary a fix have come about? How could a vast multinational corporation, staffed with brilliant people and stuffed with billions in cash, have so basically mismanaged its affairs? The answers aren’t specific to Shell or to large public organisations.

Small family companies commit exactly the same mistakes and for much the same reasons - or rather lack of reasons. They pass what may be called the ‘management inflexion point’ - the moment when the practices and precepts that have served well enough in the past no longer apply.

The consequent decline may take decades rather than days. Never mind being unfit for the 21st century. Actually, Shell’s structure wasn’t even fit for the early Sixties, which is when the appointment of a single CEO was first proposed. The proposers were McKinsey consultants, who launched their astounding rise to British fame and fortune on the back of their work for Shell. The rejection of their (literally) central recommendation wasn’t based on any factual argument or alternative and superior theory. McKinsey’s standard solution was (and no doubt still is) that corporate effectiveness rests on having ‘streamlined decision-making with clear lines of authority and an empowered chief executive’.

The Shell directors who put their names to the above sentence have as much to explain as the predecessors who saddled the group with four decades of clumsy decision making and fuzzy lines of authority - although nearly every other major business, inside and outside oil, had the clearly superior structure now being adopted. The truth is that Shell was inordinately proud of its differences, including the time-honoured ‘committee of managing directors’. Now to be abolished, this bevy of barons was once an object of great internal pride.

UNDERSTANDABLE PRIDE

Now, pride in your company, its history and its uniqueness is wholly understandable and even valuable for its contribution to morale. But a moment’s logical thought makes it clear that the pride is emotional and is attached, not to strengths that can be rationally analysed, but to accidents of history and misreadings of the present. Most groups of people like to believe that they and their organisation are ‘the best’. But it’s plain that everybody can’t be the best.

In other words, self-delusion is rampant. That explains the typical reaction when anybody - like McKinsey at Shell - suggests changes that a company, above all its leaders, finds deeply unpalatable. The response is basically ‘why should we change when what we’re doing now works so well?’. To crack this barrier, people need to be persuaded of three crucial points:

• that ‘what we’re doing now’ doesn’t work so well, and may even be working badly

• that unless the top managers do embrace change, they will be courting failure

• that others, including critical insiders and external observers, know better than you do

All three of these ideas are far less welcome than the alternative belief that yours is the best of all possible companies. The first of the trio demands self-criticism; the second raises the fear of failure; the third involves a degree of self-abasement. At least, that’s how it looks to managers who do not understand the essence of good management. That hinges on intelligent self-criticism, plus readiness to accept the reality of weaknesses and threats, with equal acceptance of the wise contributions of others - inside or outside the company.

Once again, emotion is confronted by logic: but once again emotion generally wins, unless it is brought down to earth by a really humiliating disaster like Shell’s - or the recently announced first loss in J. Sainsbury’s long history. Emotion is so powerful that it can even swamp the personal self-interest of people who are in a position to intervene in the company’s affairs: notably family shareholders. The Sainsburys have nearly two-fifths of the supermarket company’s shares. How did they ever allow the mismanagement of the business to reach this pass?

Sir John Sainsbury, the all-powerful boss who took the chain to the top of the supermarket tree, is still alive; and many other family members exist, all of them sharing the sorry injury inflicted on their fortunes by the sitting managements. Families may even not react as soon as the unmistakable evidence of systemic failure appears. As at Sainsbury and Shell, awakening can take years, even decades. And really valuable intervention averts failure by intervening to nip mistaken policies in the bud.

CLASSIC NON-EXEC CODE

These family owners, however, abide by the classic code of all non-executives. You appoint a chief executive of whose abilities you have been convinced, and you thereafter leave him or her alone to get on with the task. The code, however, goes further than this basically sensible rule. The code holds the CEO innocent until proved very guilty, and shies away from early intervention - for that would plunge the family or other non-executive directors into the unwelcome waters of management upheaval.

It took even the eminently sane Warren Buffett two years of increasing disaster to initiate action against the blundering CEO of Coca-Cola, Doug Ivester. At IBM, there on the board sat Thomas Watson, Jr., the hero who had converted the business into by far the largest and best force in computing: and who sat there during the ten years, ending in 1993, during which John Akers as chief executive, despite (or partly because of) one reorganisation after another, led the company down a slippery slope. We will probably never know what efforts, if any, Watson made to avert that slide: but Akers for long seemed to be sacrosanct, no matter how convincing the evidence of failed leadership.

Part of the problem is that appointing a CEO is an act of very substantial faith, requiring true believers who thereafter cling irrationally to their beliefs. Right now I have no idea whether appointee Jeroen van der Veer is the right man to lead Shell into a new era. But I would be surprised if the non-executives who voted for his appointment know much more. And I will be downright astonished if van der Veer (or anybody else, for that matter) can handle the massive burdens placed on his shoulders in these intriguing words:

‘The chief executive will be empowered to drive strategy implementation, operational delivery and cultural change. To reinforce the focus on delivering the Group’s strategy and priorities, management will accelerate the existing programmes of standardising systems and processes and establishing global businesses and global operating models’.

WHO DRIVES STRATEGY?

Key aspects of this job description raise more questions than they answer. Van der Veer is to drive strategy implementation, but just who devises the strategy? The second sentence implies that a strategy and priorities already exist. Were these threshed out by the previous twin boards of directors? Is strategy now in the hands of the newly unified board? If so, does anybody believe that a huge committee of fifteen people, ten of them non-executive, can ever shape a business strategy, or do more than merely rubber-stamp somebody else’s proposals?

The true strategic power must surely lie in the hands of the executive committee headed by van der Veer and consisting of four top managers: the chief financial officer and three barons (or rather two barons and a baroness) who divide the operating interests between them. This condensed version of the now abolished ‘committee of managing directors’ has similar faults.

Its three baronial members will be largely preoccupied with the many operational concerns of impossibly wide areas of global responsibility. That fact of life must affect van der Veer himself, who isn’t likely to have much time left over for the amorphous business of ‘driving cultural change’.

That’s been a hobby of top Shell executives for a long time - dating right back to the early Sixties mentioned earlier. This culture lust is by no means confined to Shell. But whenever chief executives mention cultural change, reach for your gun. Nobody knows what it means; nobody knows how to achieve it; and nobody knows how to measure its results. What you really want is to change people’s behaviour, not culture. Then you might not find one of the world’s oldest and often most successful multinationals falling so far behind - only getting round to setting up ‘global businesses’ and establishing ‘global operating models’ in late 2004.

As for standardisation of systems and processes, I was involved several years ago in a massive programme to provide a worldwide IT platform for the group. My role was to help train trainers, lecturing to those
Who would go forth to embed the new systems in the minds and practices of Shell people. Whether or not this would-be office revolution was concluded as planned, it must have left large gaps behind. Otherwise, why is standardisation so prominently featured on the late-2004 reform menu?

ETERNAL GIVEAWAY

That’s the eternal giveaway - when new policies are declared and implementation decreed, only for the same bad practices to survive after many years and immense numbers of man hours. Peter M. Senge of MIT never wrote truer words than these: ‘however hard you push, the system pushes back harder’. During John Akers’ long and losing struggle to reform IBM, he once got ‘goddam mad’ and declared that ‘Everyone is too comfortable when the business is in crisis’. That’s when the management inflexion point is passed - when the intensity of the crisis is hidden from people by the comfortable corporate ways and the familiar system.

How can people be made more uncomfortable? There is no substitute for rigorous efforts to unearth the truth telling what those who work for and do business with your company truly feel and think about its goods, services, people and performance. That truth, though, only starts to add value when converted into action plans which aim at correcting the negatives revealed (they will be abundant) while exploiting and enhancing the (invariably fewer) positives.

Action plans, as the words say, demand action. So each plan must be clearly allocated to responsible people with whom a tight, tough timetable is agreed and whose progress is efficiently monitored. The chief monitor is the CEO. But the beginning of wisdom is to abandon the blind faith that he or she can do it all.

Strategic Thinking

2008-12-04T19:29:00.002-08:00

A fat man and a thin man are running a race. For reasons which will become obvious later, we shall change from a ‘race’ to ‘running after the girls’. The thin man will come out ahead in most cases - unless the thinness of the thin man is due to illness or starvation! Let us look at some different thought approaches to this situation.

CATEGORY APPROACH

Here we put the fat man into the appropriate ‘fat man’ category. We then know that fat men do not run very fast. This is the approach adopted by psychologists, psychiatrists and business executives in general. Once we can ‘box’ the situation, we know the expected behaviour. If it is this type of situation, then we know, from experience, how the situation will develop.

The whole of our ‘thinking software’, as developed by the GG3 (Greek Gang of 3) is about identifying the standard situations and thus knowing all about them. A doctor does this all the time. The doctor diagnoses the illness. Once the diagnosis has been made, the probable course of the illness is known. The possible complications are known.

Most important of all, the standard treatment is known. Identifying the category immediately indicates the required action. While this may be very useful in predicting the outcome of the competition between the thin and the fat man, it does not help the fat man at all.

THE GENES APPROACH

This is even more fundamental than the category approach. Here we say that the fat man has ‘fat man genes’. There is nothing he can do about it. He will always be fat, because that is the way his metabolism works. So he had better adjust to the situation and stop trying to compete with thin men.

While this approach may seem rather negative, it also seems practical. Why attempt the impossible? Be pragmatic. Do what can be done. Assess the actual capabilities of your organisation and yourself, and then play to those capabilities.

This can rather easily translate into: ‘be content with the existing situation and do not strive to change it’.

The result is complacency. Many organisations have this strategy, even though they would rarely admit it: ‘You cannot change your genes - so do not waste your time trying.’

THE ANALYSIS APPROACH

This would probably be the most common, because it arises from the way in which we are taught thinking at school, at university, in business schools etc. We analyse the situation: the fat man cannot run fast because he is fat.

We now seek to put things right. We analyse further. Why is this man fat? We refuse to accept the passivity of the ‘gene approach’. We suspect that the man is eating too much. So, based on our analysis, we take action to put things right. We put the man on a strict diet. The hope is that the fat man will indeed lose weight and will then compete with the thin man.

Analyse the situation. Find the cause. Remove the cause. You have now put things right and solved the problem. This approach works quite often. At this point we may believe that we have covered all the approaches. But we have not. The best approach is still
to come.

THE BICYCLE APPROACH

We provide the fat man with a bicycle, and he will now surely outdistance the thin man. At this point we can see why the ‘race’ metaphor would not have applied, because the rules of the race would have precluded a bicycle. The approach is not that of analysis, but the approach of ‘designing the way forward’. Here is the situation. How do we design a way forward to reach the values that we want? Design is very different from analysis.

DESIGN AND ANALYSIS

When Greek thinking was re-introduced into Europe at the Renaissance, schools and universities were largely run by the Church. The Church had a great need for the ‘truth’. This was needed to prove heretics wrong. Education became truth-obsessed. Analysis is part of the search for the truth. What are the elements here? How is this made up? What is the underlying truth?

We believed, and still believe, that if you have the truth, then action is easy. You can have the truth about the present and the past, but you cannot have the truth about the future. Design is about the future. Analysis is about the past.

You can never have the truth about something which is not yet there and will not be there until you have designed it. As a result ‘design’ has never been a part of formal education. Education is about the way things are and about the ‘truth’. Of course, there are certain fields like architecture which are all about design - even though they are too often taught as the ‘analysis of different styles’. But, in general, design is not adequately taught.

PRACTICAL IMPORTANCE

Most people working on human thinking set out to analyse the different stages of thinking. They then set out to teach these stages. But description does not provide an operational tool. The same people seek to analyse why someone thinks in a certain way. They then seek to correct any obvious faults. This is the traditional analysis approach. So what is the ‘design’ approach?

In the ‘design’ approach we design frameworks and structures which people can learn and use deliberately. So the Six Thinking Hats is a designed structure that can be learned and used. It is so practical and simple to use that it is in fact used by four-year-olds, by senior executives and by top economists. It is a far better way of exploring a subject than the absurdity of argument.

• A major corporation in Finland used to spend thirty days on its multi-national project discussions. Using the parallel thinking of the Six Hats, the discussions now take only two days.

• MDS, a company in Canada, did a careful costing and showed that using the Six Hats saved $20 million in the first year.

Another example of a ‘designed’ framework is the CoRT thinking tools which bring about an expanded perception. The Hungerford Guidance Centre in London takes youngsters who are too violent to be taught in normal schools. When David Lane was the principal, he started teaching these thinking tools to the youngsters. He has now done a 20-year follow-up, which has shown that the rate of crime, measured by convictions, is far lower in the group taught thinking than in the group not so taught. This is a remarkably powerful effect. Sadly, most people in education – and business - have no idea that designed thinking tools can make a huge difference.

DESIGN

Design means putting together what we have in order to deliver a value that we want. In the beginning every business was a design. Later, maintenance and problem solving take over, and the design element disappears.

Business Management

2008-12-04T19:29:00.001-08:00

In an increasingly complex world society, the advancing complexity of business management is inevitable. It’s been visible for at least four decades, and no doubt will continue indefinitely. You can follow one cause (and effect) in the changing preoccupations of the largest companies. In the mid-Sixties their concerns were primarily internal – but the outside world was about to assert itself.

Before that sea-change, the world’s major markets were astonishingly stable. The giant companies set the tone and managed the economy. They were by and large production-led, paying lip-service to marketing orientation, but actually churning out goods and services as they (and not the customers) saw fit. Their output featured fairly continuous improvements, but no great attention to cost. Markets were served on a take-it-or-leave it basis; but mostly customers had to take it, for lack of any alternative to the big brands.

CHALLENGED MODELS

Today’s successor companies have no such luxury. Markets and their exploitation have evolved into new, fluctuating patterns that challenge both the business models and the marketing means. To take just one factor, the internet is continuing to revolutionise the entire customer process from information to after-sales service. Very few companies have fully mastered this new chain of communication and execution. But what might be called the Dell model, after one of the very best users, is the tidal wave of the future.

Among the myriad consequences, process change has become much faster. Websites can be changed far more rapidly than factory layouts - but the latter reforms should also have been speeded up by the new technology. Grasping its implications and potential is plainly possible: witness the achievements of the vendors of high-tech itself. Intel, Apple, Microsoft and the above-mentioned Dell have achieved speeds of effective response that traditional management modes could never match, but which are now badly needed.

The high-tech tools, however, still must be applied to issues that are neither technical nor new. Management still hinges on correct analysis of situations, correct decisions on how to turn these situations to optimum advantage, correct execution of the decisions, correct response to feedback as results in the real world flow in. And then you repeat the process. ‘Analyse, Decide, Execute, Feedback, Again’ (ADEFA) is the management mantra. How would you apply it to these five scenarios, picked by Fortune as among ten of the toughest challenges around today?

1. Your banking business needs greater organic growth, but must simultaneously cope with the damage done to its reputation by scandal and corruption: plus the departure of many of its experienced managers.

2. Your soft drinks business, long a wholly reliable source of growth and profits, has run out of the former. How can you replace 85% of turnover with a more powerful driving force?

3. As a fashion retailer, your offerings are looking tired. Both managers and customers are deserting you, and the need is to match the brand strength with better market penetration.

4. The company sells pharmaceuticals, but one of its big sellers has had to be withdrawn because of lethal side-effects. Just when you need a new blockbuster, the shelves look alarmingly empty.

5. You have a quasi-monopoly in the world’s leading technology. But almost every one of your markets is under threat from newcomers and long-standing competitors alike. How can you defend your position?

SWOT ANALYSIS

The five companies are Citigroup, Coca-Cola, Gap, Merck and Microsoft - five of the most successful businesses the world has ever seen. Is there any common denominator that explains their very similar dilemmas? One is very clear: the difficulties have developed over a period. At any point, SWOT analysis would have shown that their Strengths had been weakening, relatively speaking, while their Weaknesses were become more serious. Their Opportunities required new entrepreneurial drive, and the Threats were real and potentially lethal.

So when did you last conduct a SWOT analysis, either on the whole business or the section in which you manage? It’s not a fashionable piece of management technology. But its disregard can be deadly. Another article in the same issue of Fortune shows in a brilliant study of General Motors what happens to a company whose Strengths are exaggerated, whose Weaknesses are ignored as Opportunities are missed, and whose Threats are brushed aside.

In all five companies, as at GM, the supreme tendency was to forget the bad news and concentrate on the good. The same factor has bedevilled the vicious three years of war in Iraq. Any planning for the occupation was ruled unnecessary because the Iraqis would be so thrilled to be occupied and so grateful for US ‘reconstruction’ of the country. The actual, awful experience was likewise wished away by the occupiers because it contradicted the basic assumptions on which they had gone to war.

Similarly, GM’s top management cannot face up to the all-too real prospect of bankruptcy. In their misguided eyes, the car giant is still the greatest manufacturer in the world. Nor will you find many at Coke ready to admit that the business has run out of steam: that the largely financial reforms instituted by Roberto Goizueta have exhausted their once-for-all magic; that the great CEO’s achievements only put off the evil day when lack of diversification and innovation would come home to roost.

THIRD CEO SINCE 1992

The present CEO, Neville Isdell, is the third since 1992, which is both a bad sign and an evil in itself. Launching hundreds of new products is not likely to be any more effective than the rapid-fire changes of CEO. These stem from the second key cause of large company failure: excessive faith in the ability of one high-and-mighty boss to design and implement the ADEFA cycle. Even Goizueta missed out (in diversifying into Hollywood and bombing with a deeply unloved effort to replace the much loved traditional Coke formula).

Any solution to Coke’s huge problems will complicate the management process. Top down rule by the CEO is simpler, but simply inappropriate in modern markets. Study P&G, widely hailed for having escaped from a bad case of Big Company Blues. The escape rested on a new innovation model - ‘Connect and Develop’. P&G would forget its old reliance on internal innovation and seek new ideas from outside the company’s doors.

The search was based on:

(1) identifying the Top Ten consumer needs

(2) identifying adjacencies – ‘new products or concepts that can help us to take advantage of existing brand equity’

(3) ‘technology game boards’, used when you need answers to key questions:

• Which of our key technologies do we want to strengthen?

• Which technologies do we want to acquire to help us better compete with rivals?

• Of those technologies which we already own, which do we want to licence, sell or co-develop further?’

The answers to such questions help to direct the networking with proprietary networks which involve ‘technology entrepreneurs and suppliers’, and the ‘open networks’ which connect P&G with hundreds of thousands of experts. I particularly like ‘Your Encore’, whose participants are 800 high-performing retired scientists and engineers. Tapping such knowledge makes every kind of sense. The innovatory cycle of Discover, Evaluate, Launch and Co-create works as well with outside talent as with insiders.

Using outsiders does, of course, dissipate the control traditionally exercised by the corporate centre. P&G does indeed have a vice president for innovation and knowledge who has day-to-day accountability for connect-and-develop. But his role is that of overseeing initiatives which he cannot ‘manage’ in the traditional way. The CEO, A. G. Lafley, set the new approach going and named a broad goal - to acquire half of P&G’s innovations from outside the company. By definition, that radically changed the way P&G managed itself.

RADICAL RESULTS

In turn, this radically changed the results. ‘Our R&D productivity has increased by nearly 60%. Our innovation success rate has more than doubled, while the cost of innovation has fallen. R&D investment as a percentage of sales is down from 4.8% in 2000 to 3.4% today’. The essential point is that such success would have been utterly impossible without a revolution in ‘the way we do things round here’, and without a surrender of direct power by Lafley and his cohorts. Responsibility and authority are not affected. But involvement is simply redefined.

The following words ring very true: ‘Leadership is not defined by the exercise of power but by the capacity to increase the sense of power among those who are led. The most essential work of the leader is to create more leaders’. There’s only one trouble with this excellent statement. It was published by one Mary Follett in 1924.

Over all the intervening decades, management hasn’t caught up with her wisdom. Follett’s book was titled Creative Business - and innovative creativity, as at P&G, is where new approaches to management are most required.

The entrepreneur is essentially a creative innovator. In a recent blog, I recounted the nine attributes of the entrepreneur as identified in the HBR at end-1979. They convert into nine questions. Do you have?...

• A high level of drive and energy

• Enough self-confidence to take carefully calculated, moderate risks

• A clear idea of money as a way of keeping score, and as a means of generating more money still

• The ability to get other people to work with you and for you productively

• High but realistic, achievable goals

• Belief that you can control your own destiny

• Readiness to learn from your own mistakes and failures

• A long-term vision of the future of your business

• Intense competitive urge, with self-imposed standards.

If you haven’t answered with nine resounding shouts of Yes, don’t despair. As I wrote in the blog, these attributes are not immutable elements of personality.

Every one of the nine can be developed, if you are prepared to confront your shortcomings and then to work to change your behaviour. These are basics of management and leadership alike. However, there’s something missing - the combination of marketing and innovation that creates a great customer franchise.

CUSTOMER PROPOSITION

My blog describes how I spotted this Wow! Factor when writing about nine great entrepreneurs who each exemplified one of the nine attributes in particular(although they actually were proficient at them all).

The story was the same whether it was Miguel Torres in wine, Bill Hewlett and Dave Packard in electronics, William Morris in cars, Gottlieb Duttweiler in cut-price groceries, Marcel Dassault in aircraft, Akio Morita of Sony in consumer electronics, Camillo Olivetti in office machinery, Ruben Rausing in packaging, or Robert Bosch in auto components. Each of them had grasped a great new idea which, with the aid of excellent execution, had metamorphosed into an irresistible customer proposition.

Each man had developed an irrefutable answer to the fundamental question: Why should the customer buy from me, and not from anyone else? As the P&G story shows, getting the right answer, and the answer right, is much more complicated in the complex world I described earlier. But when Hewlett said ‘If I have to tell a guy something, I consider myself a failure as a manager’, he was articulating a philosophy that Mary Follett would have applauded, and that Lafley seems to be following at P&G.

The complex challenges won’t be mastered without innovation in products and processes (including the processes of management itself). The leader’s role is to develop and encourage as many sources of ideas as possible, within the business, outside the business, and in combinations of external and internal. You deploy the attributes of the entrepreneur to break complexity down into manageable parts set in a frame of basic disciplines - above all, self-discipline. And you win.

About Accidental Death and Dismemberment Insurance

2008-12-04T14:07:00.001-08:00

Life insurance provides a monetary benefit to a descedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity.

Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.

Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.

In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death.

In U.S., the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation. A combination of low-cost term life insurance and a higher-return tax-efficient retirement account may achieve better investment return.

Life Insurance

2008-12-04T14:05:00.000-08:00

History of Insurance

2008-12-04T13:51:00.000-08:00

In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbour, the other neighbours must help. Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union).

Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practised by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practised by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.

Achaemenian monarchs of Iran were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.

The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much."[1]

A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage.

The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.

Toward the end of the seventeenth century, London's growing importance as a centre for trade increased demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance.

Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England's first fire insurance company, "The Fire Office," to insure brick and frame homes.

The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system (commonly referred to as the Optional Federal Charter (OFC)) for insurance similar to that which oversees state banks and national banks.