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Most Workers are Starved for Recognition

'Employee Recognition That Works' by Cindy Ventrice (ISBN 1576756017) Most workers are starved for recognition. In fact, some of your employees may be experiencing a recognition deficit.

While most managers believe that pay is the most important factor in whether employees stay or go, employees consistently rank recognition for their good work as number one. The mother lode of employee motivation and job satisfaction lies in the cycle of challenge, achievement, and recognition—the CAR motivational cycle, as first presented by Frederick Herzberg, the father of modern motivation theory. His study showed that the factors that produce job satisfaction are, in order: achievement, recognition, the work, responsibility, advancement, and growth. These factors are related to job content. Factors that may take away job satisfaction but not produce it—demotivators—are related to job culture: policy, administration, supervision, relationship with boss, work conditions, salary, relationship with peers, personal life, relationship with subordinates, status, and security, in that order.

You may be measuring what counts, and what you are measuring may be getting done, but unless you recognize and reward what is done, the productivity of your people will decline, along with your retention rates.

Most Workers are Starved for Recognition

Why Managers Don’t Recognize People

Many managers get low motivational millage out of the CAR cycle because:

  1. They subscribe to the philosophy, “If you don’t hear from me that means you’re doing a good job.” This low-energy, low maintenance management practice is popular among autocratic managers who have worked for managers who treated them this way. Many managers who use this style think: “My people are expected to do their job, and they get paid to do it.” They resist employee recognition practices, and resent employees who are governed by their feelings and who need more praise and recognition.
  2. They believe that “rewards and recognition” is the responsibility of the human resources department. Some programs have the unintended effect of letting managers off the hook in providing recognition. If managers do not “own” the practice, they may never do it.
  3. They do not spend enough time observing or measuring employee performance to know if they are achieving results in the first place. Obviously, if they do not know who the top performers are, they will be reluctant to recognize and praise anyone.
  4. They do not know how to recognize and are afraid they will do it the wrong way. If you haven’t been taught how to recognize results, and if you aren’t being recognized yourself in creative and appropriate ways, how would you know how to do it?

Two Ways to Recognize Results

Employee recognition has become a large industry, providing prizes, travel, cash, and praise. Many managers believe that only cash rewards/bonuses, raises, and promotions are effective for motivating and keeping their best performers. While money is important to all employees, it is more important to some than others are. Money can help to motivate and retain when given promptly in recognition of a specific achievement. However, the top motivator is the chance to be challenged, achieve results, and be recognized.

Informal Recognition and Rewards

Informal rewards that managers initiate to recognize and motivate certain individuals in a timely way. Here are six ways to get the most out of informal rewards:

  1. Match the reward to the person’s personal preferences—some people are more motivated by a letter of appreciation.
  2. Match the reward to the significance of the achievement—don’t overdo when recognizing people for small achievements;
  3. Give the reward as soon as possible after the achievement;
  4. Explain why the reward is given;
  5. Recognize groups and individuals within groups—recognize everyone on the team, but single out those who made the greatest contributions;
  6. Find out what your workers value as rewards—if the yearly bonus, for example, is now considered an entitlement, it no longer has the power to motivate.

To encourage specific achievements or contributions by key performers on highly valued assignments, consider the following seven rewards:

  1. Outstanding Employee Award, based on completing urgent projects, collaborating cross-functionally, generating money-saving ideas, and fostering teamwork;
  2. Productivity and Quality Awards that provide meaningful incentives or rewards;
  3. Employee Suggestion Awards that encourage employees to submit more ideas;
  4. Customer Service Awards that encourage the highest standards of service;
  5. Sales Goal Awards that reward high performance;
  6. Team Awards that reward all the members; and
  7. Attendance Awards that encourage employees to be prompt and not miss workdays and Safety Awards that recognize employees for following safety procedures and minimizing accidents.

Formal Employee Recognition and Rewards

Formal Recognition and Rewards

Formal recognition and rewards that the organization initiates to motivate all employees. A well-designed formal rewards program will help keep your most valued employees. Here are some ideas:

  1. Multilevel reward programs and point systems that are tailored to the needs of different employees and recognize a few employees in a dramatic way.
  2. Contests that run a short time, have simple rules, offer desirable prizes, and reward performance directly and promptly.
  3. Field trips, special events, and travel that provide “bragging value.”
  4. Education, personal growth, self-development, training and services that build needed skills.
  5. Advancements or promotions that add responsibility, give special assignments, or allow people to mentor younger employees or lead a cross-functional team can yield payoffs in visibility and job enrichment.
  6. Stock or ownership incentives, such as employee stock options, that motivates performance and retention.
  7. Celebrating employee anniversary dates helps to keep long-term employees.
  8. Custom benefits, health, and fitness programs that allow employees to select benefits that best fit their needs.
  9. Charities, volunteer activities, and service projects that encourage employee participation.

Relate formal rewards to organization and employee needs, ensure the reward’s fairness, and present the rewards in a timely manner. Talk up the value of the rewards, but do not oversell the program. If you are not sure what recognition to give, just ask! If you do not tailor the reward to the employee, the reward will not have the motivating effect you desire. Give them several ideas to choose from and a chance to write in their own ideas and submit their preferences.

Ask Two More Questions for Employee Preferences for Recognition

To get the desired effect from your recognition and reward efforts, ask your people two questions:

  1. For what do you want to be recognized?
  2. How would you like to receive your recognition?

'1501 Ways to Reward Employees' by Bob Nelson (ISBN 0761168788) Start recognizing your workers, not as you would like to be recognized, but as they would like to be recognized. Instead of focusing on big events, work to create a culture of appreciation.

Make acknowledgment a part of the daily routine. Become an obsessive observer. Notice what other people are doing and acknowledge their efforts.

A simple “thank you” or “awesome job”—sincerely conveyed can transform a relationship.

Grade your organization on recognizing results what can you do to improve in this area.

Posted in Management and Leadership

How to Build Lean and Agile Management

How to Build Lean and Agile Management

Hierarchical is out; horizontal is in.

There’s no room today for the multiple layers, slow decision making, and dependence on leaders. Successful organizations are characterized by consultation, collaboration, and cross-functional problem-solving, decision-making, and planning.

Why are horizontal organizations so much more nimble? Extended product development cycles are replaced by rapid movement from design to market; decision-making bottlenecks are eliminated; leaders empower and delegate; and the focus is on the success of the business, not individual functions.

Horizontal Leadership Success

Leaders intent on this transition must take four actions:

  1. Horizontal Leadership Success Look into the mirror. The top team sets the tone. Before expecting others to “go horizontal,” senior managers must ask, “What are the decision-making patterns on our team?” “To what extent do we see ourselves as accountable and responsible for one another’s success and for the outcomes of our team?” “Do we depersonalize conflict and confront one another honestly and openly?” If the president is still calling the shots; if team members are constantly lobbying for resources; or if internal conflict has brought decision making to a halt-it’s time to practice what we preach.
  2. Align all your teams-beginning at the top. Raising team performance and refraining team behavior begins with alignment. Ask seven questions to determine whether or not a team is aligned: Does the team have clear goals? Are those goals aligned with the strategy? Do all team members know who is responsible for what and how they will be held accountable? Are protocols or rules of engagement agreed upon so everyone knows how decisions will be made? Are rules in place for how conflict will be managed? Are relationships between and among team members healthy and transparent? Do people assert their point of view honestly and openly and treat disagreement not as a personal attack but as a business case?
  3. Shift from commanding to influencing. In the new paradigm, the one who wins isn’t the person with the most clout, but the one who possesses the right strategic instinct, content capability, rapport, and persuasion. When Susan Fullman was director of distribution for United Airlines, she was a cross-functional player in a hierarchical context. Her success hinged on her ability to influence rather than command: “I had to sell my vision to each director. And I couldn’t do that without learning to clearly articulate my ideas, depersonalize the way I made my case, develop my powers of persuasion-and learn to listen to each person and address their concerns.”
  4. Become a player-centered leader. The horizontal organization calls for a shift in the role of the leader to a new “player-centered” model. The question becomes: How prepared are the players to handle increased authority and responsibility? As teams proliferate and decision making becomes decentralized, people must step up. Managers must know each person’s capabilities and skills and adjust his or her “style” accordingly.

'Lead with Lean' by Michael Balle (ISBN 154480844) For example, when managing an inexperienced team leader, a senior manager needs to provide a high level of direction, structure, and support; but as team leaders become more competent, the senior manager can adopt a more hands-off style. The goal should be to inspire and empower, not prescribe or direct. Provide coaching and collaboration as each player requires.

Many leaders talk about decentralization, delayering, and empowerment. But decisions continue to be made by the CEO; functional heads are still vying for resources; and further down are vacationers and victims.

Horizontal organizations are more states of mind than states of matter. It’s not as much about titles and boxes as it is about every employee showing up, every day, as an energized, strategically focused team member.

Posted in Management and Leadership Mental Models and Psychology

The Magic of Customer Enchantment

Reality Check on Customer Enchantment

The Magic of Customer Enchantment We love hearing those service champion stories—always laced with awe-inspiring heroics and “happy ever after” endings. These way-beyond-the-call-of-duty stories are generally exotic, extravagant, and frequently involve helicopters, champagne, and penthouse suites. Then, we go back to work, thinking “My boss would kill me if I did something like that.” As the cold reality of work quickly freezes out the story’s warmth, it gets dropped in our brain’s “fairy tale” file.

But, is there another side to these enchanting stories? Could extravagant service have a return on investment of sufficient size to warrant repetition? Should managers challenge their employees to “bring me more lavish bills for unplanned, unbudgeted red carpet treatment for customers!” In this era of tight margins, ferocious waste reduction, and microscopic expense control, how do you cost justify an encounter which is by nature extravagant?

Service extravagance does have an important role in any service quality effort. Power, however, lies first in its uniqueness. A steady diet of extravagance and you not only abuse the bottom line, you turn unique into usual—and the magic disappears. However, what mileage can be gained by going the extra 10 miles? Assuming unique is kept unique, there are advantages to encouraging an occasional service extravaganza.

Experiment with service extravagance and customer enchantment

Three Big Benefits of Customer Enchantment

While the CFO might have to take a leap of faith, there are great payoffs of service heroics. Service indulgence fosters customer love and other benefits.

  1. Service Extravagance Releases Employee Power. When the subject of empowerment is discussed with leaders, they all bewail that employees have far more power and authority than they typically use. And, it is generally true. Get a group of employees together and they will quickly gripe about their lack of authority. Empowerment (or lack of it) is often code for fear of failure. Celebrating service heroics can encourage employees to “take it to the limit” and “push the edge of the envelope.” When their confidence is matched by affirmation, they learn to take risks. The goal is to encourage employees to experience the limits and, if they go too far, learn that the leader response will be support and coaching rather than punishment and rebuke. Empowerment begins with error; error begins with risks. Employees risk when they believe failure will spark growth, not censure.
  2. Service Extravagance Keeps Service Quality Top of Mind. The challenge in creating a service culture is how to keep the “shine from wearing off.” The early elation of the “The year of the customer” kickoff quickly turns to exertion when incensed customers make unreasonable demands on an already fatigued front line. How do you insure excitement wins over despair? Part of the answer is celebrated heroics. Effective service celebrations begin with “see.” The telling of heroic service stories provides a graphic pictures of what great service looks like. Too often those witnessing a celebration learn who but not why. They depart with little to emulate. So, tell the story in detail, along with the philosophy or attitude.
  3. Service Extravagance Builds Teamwork at Its Best. Service extraordinaire events, when instigated and implemented as a team, can raise morale and reinforce important lessons in interdependence. The adage that “nothing pulls a team together more than a crisis” can be expanded to a “celebration” as well. And, since teamwork is a decisive commodity in today’s service, the winners in the eyes of the customers are less likely to be the single acts of excellence, and more apt to be the collaborative efforts of colleagues who craft an experience which customers retell over and over. Simply the act alone can fuel teamwork.

'Delight Your Customers' by Steve Surtin (ISBN 0814432808) Remember: Celebrate customer extravagance as extra-ordinary. And, teach employees the principle behind the peculiar. Give leeway for the exceptional, and your employees will have exciting standards for excellence that can energize them to produce service performances customers will remember as special.

Experiment with service extravagance and customer enchantment.

Posted in Management and Leadership

How to Be More Creative and Capable in Creating Meetings That are More Effective

The greatest myth that exists about meetings is that they are inherently bad, unavoidably painful, unproductive, and necessary evils. Bad meetings are a reflection of bad leaders. Worse, they take a devastating toll on a company’s success.

Fortunately, for those leaders who challenge the notion that meetings are unfixable, it is possible to transform what is now tedious and debilitating into something productive, focused, and energizing. The key to improving meetings, however, has nothing to do with better preparation, or agendas.

Creating Meetings That are More Effective

Better Meetings

The first step in transforming meetings is to understand why they are so bad. There are two basic problems. First, meetings lack drama, meaning they are boring. Second, most meetings lack context and purpose. They are a confusing mix of administrivia, tactics, strategy, and review. This creates unfocused, meandering conferences, with little resolution or clarity.

  • Produce drama. The key to making meetings more engaging (less boring) lies in nurturing the natural conflict. The best place to learn how to do this is Hollywood. Directors and screenwriters know that movies need conflict to be interesting. Viewers need to believe that there are high stakes, and feel the tension the characters feel. They realize if they do not nurture that drama in the first 10 minutes of a movie, audiences will disengage. Leaders of meetings need to put the right issues (often the most controversial ones) on the table at the beginning. By demanding that their people wrestle with those issues until resolution has been achieved, they can create genuine, compelling drama.
  • Create context and purpose. Drama will not matter if leaders do not create the right context for their meetings and make it clear to team members why the meeting is occurring and what is expected of them. To create context, leaders must differentiate between different meetings. Too often, however, they throw every possible conversation into one long meeting. This creates confusion and frustration among team members who struggle to shift back and forth between tactical and strategic conversations, with little or no resolution of issues.

Nevertheless, be warned, by creating context, leaders might have more meetings. They may spend less time in meetings, but have different types of meetings.

Time for Meetings

Teams should ideally be having four distinct meetings regularly:

  • Daily Check-in is a schedule-oriented, administrative meeting that lasts 10 minutes. The purpose is to keep team members aligned and provide a forum for activity updates and scheduling.
  • Weekly Tactical is what most people know as staff meetings. These should be about one hour in length, give or take 20 minutes, and should focus on the discussion and resolution of issues that affect near-term objectives. Ironically, these work best if there is no pre-set agenda. Instead, the team should quickly review one another’s priorities and the team’s scorecard, and then decide on what to discuss. This will help them avoid wasting time on trivial issues, focus on issues that are relevant and critical, and postpone the discussion of more strategic topics.
  • Monthly Strategic is the most interesting meeting for leaders, and the most important indicator of strategic aptitude. It is the place for big topics that have a long-term impact. These issues require more time and a different setting-one in which participants can brainstorm, debate, present ideas, and wrestle with one another in pursuit of the optimal long-term solution. Each strategic meeting should include just one or two topics, with two hours for each topic.
  • Quarterly Off-Site Review is a chance for team members to reassess issues: the interpersonal performance of the team, the strategy, the performance of employees, morale, competitive threats, and industry trends. These can last one or two days each quarter.

Creating More Effective Meetings

The key to making this four-pronged meeting structure work is to overcome the objection: “How am I going to get my work done if I’m spending all of my time in meetings?” There are two ways to answer this. First, these meetings require about 20 percent of a leader’s time. Most leaders spend even more time on meetings anyway. Second, leaders need to ask: “What is more important than meetings?” If they say “sales” or “e-mail” or “product design,” they should reconsider their roles as leaders. A leader who hates meetings is like a symphony conductor who hates concerts. Meetings are what leaders do. The solution to bad meetings is not to eliminate them, but to transform them into meaningful, engaging, and relevant activities.

'Meetings Matter' by Paul Axtell (ISBN 0943097142) Leaders need to cascade communication. Members of an executive team should leave each meeting having agreed on a set of messages that they will communicate to their respective staffs within 24 hours. Then, members of their staffs communicate those same messages to their staffs. This forces executives to get clear about what they have agreed upon and what actions they will take. Employees in different departments hear the same messages from their respective leaders. This gives employees confidence and allows them to pursue their work without doubts and distractions. Cascading communication also allows people to implement decisions quickly and promotes action and buy-in.

Because of its personal nature, cascading communication evokes more trust. There is no substitute for personal, interactive communication when it comes to inspiring people to act. Therefore, take 10 minutes at the end of their meetings to get clear about what has been decided and what needs to be communicated to turn decisions into actions.

Posted in Life Hacks and Productivity

Ryanair CEO Michael O’Leary Protests Brexit in London with Funny Costume

Ryanair CEO Michael O'Leary Protests Brexit in London with Funny Costume

On Jun 23, 2016, the UK voted to leave the EU. The economic and political consequences will be significant and long lasting, and not just for the UK and the EU. The repercussions will be felt everywhere. The key concern for EasyJet and Ryanair, among a number of airlines hypothetically affected, is what will happen if the UK fails to remain part of Europe’s single market in air services when Brexit negotiations accomplish.

Ryanair CEO Michael O'Leary Protests Brexit in London with Funny Costume

A challenge for Ryanair is that its biggest base is in the UK, at London Stansted. Its two busiest UK routes in June this year are Dublin–Stansted and Dublin–London Gatwick.

Ryanair CEO Michael O'Leary Protests Brexit in London with Funny Costume

CEO Michael O’Leary was upfront, opinionated and amusing as ever today at a Bloomberg News conference where he warned that Brexit could lead to contagion. The CEO of one of Europe’s largest airlines said that he would leave that to greater minds than his—referring to his treasury administrators. He warned that the budget airline would be forced to rationalize investment if Britain votes to leave the EU.

Ryanair CEO Michael O'Leary Protests Brexit in London with Funny Costume

Appearing on a platform with British chancellor George Osborne at Stansted Airport, Mr O’Leary spoke that inward investment will be lost to participant EU member states such as Ireland and Germany if Britain votes for Brexit. O’Leary said,

It is this type of large-scale foreign inward investment that is helping to drive the UK economy and job creation. It is exactly this type of investment that will be lost to other competitor EU members if the UK votes to leave the European Union. The single market has enabled Ryanair to lead the low-fare air travel revolution in Europe, as we bring millions of British citizens to Europe each year, and welcome millions of European visitors to Britain, and we are calling on everyone to turn out in large numbers and vote remain.

Ryanair CEO Michael O'Leary Protests Brexit in London with Funny Costume

Brexit may result in Ryanair’s formation of UK subsidiary. Ryanair has reported it may create a new subsidiary to operate UK domestic flights if a “hard Brexit” happens, the company said. Under the worst outcome, the UK would be forced to leave the European open-skies system as it exits the EU, which would thwart Ryanair as a European carrier from remaining to operate routes from London to Belfast, Edinburgh and Glasgow.

Ryanair CEO Michael O'Leary Protests Brexit in London with Funny Costume

It would then need to establish a separate UK company, of which Ryanair would be able to own a maximum of 49.9 percent. If the UK continues part of the open-skies area, the company said it forecasts no change in the ownership structures of Ryanair or UK carriers. Ryanair said airlines have been invited to a round table discussion organized by the government department charged with navigating the UK’s exit from the EU to discuss the impact this will have on their sector.

Ryanair CEO Michael O'Leary Protests Brexit in London with Funny Costume

Ryanair has stepped up warnings that flights between the UK and Europe are jeopardized by Brexit, with the airline’s chief executive Michael O’Leary claiming that the prospect of upsetting aviation was one of the quickest and best ways for the EU27 to “stick it to the British”.

If Britain votes to leave it will be damaging for the UK economy and the European economy for the next two or three years … there’ll be huge uncertainty while Britain tries to negotiate an exit out of a single market and tries to replace that with a whole series of trade deals which they won’t get done … yet staying in is the way forward the British economy is performing fundamentally well at the moment … unemployment is low … the economy’s doing well … it’s one of the most competitive economies in Europe … this is the time to stay in and continue to benefit from European membership not leave now.

We speak as Britain’s largest airline we carry 40 million passengers to and from the UK this year we’re also a large foreign in word investor here in the UK I fly from 2060 British airports I employ more than three thousand pilots, cabin crew, and engineers and I want to keep investing in Britain I want to keep growing the business here in Britain but I can only do that if Britain remains a member of the European Union.

Were they not want to leave not just European Union but also the single market we may not be able to free to fly anymore between the UK and Europe as an Irish airline … now of course the UK is part of the European Union … it’s not part of the euro and the single currency … Ireland of course is there’s lots of criticisms about the future of the euro if it can survive in its current form overall has Ireland benefited from being a part of the single currency can the single currency survive as it is I think overall iron has benefits usually by being a member the single currency I think the single currency will survive because the strongest economy in Europe … Germany is behind the euro and I think they’ll do whatever needs to be done to make sure it does survive but there does need to be more harmonization between the outer relying countries the Greeks, the Italians, the Spanish, and the Irish who have suffered real economic problems in recent years as a result of very low interest rates and … you know property bubbles … but that’s why I a single market needs reform we’ve been very critical of Brussels and over-regulation and I think why this election will bring about more reform in Brussels as long as Britain votes to stay in.

Ryanair CEO Michael O'Leary Protests Brexit in London with Funny Costume

Posted in Airlines and Airliners Global Business

Companies Must Think Ahead: What Was Hip Then is Not What Customers Want Today

Companies Must Think Ahead: What Was Hip Then is Not What Customers Want Today

As we look back at the last two decades of e-commerce, we have seen major shifts in the way companies are doing business online. Companies that succeed are constantly reshaping and re-evaluating their e-business plans. Companies such as Dell, E-Bay, and, among many others, stay ahead of the curve in e-commerce by being committed to never-ending improvement.

Companies that become leaders in e-commerce offer better services, redefine their position in the marketplace, research customer buying trends, partner with companies, and take advantage of technological changes.

  • 'Playing to Win' by A.G. Lafley and Roger Martin (ISBN 142218739X) Dell was one of the first companies to reap the benefits of e-commerce. Dell continually improves their Web site to include more personalization and one-to-one relationships with customers. They increase online customer service and expand their business to provide benefit services. More than 40 percent of the company’s revenue comes from online sales. Last year they generated $15 million per day of revenue online; this year they expect to generate half their revenue online. Dell attributes their success to customer service and providing a personalized experience for their shoppers. This year they invested $26 million into Site-Smith, a fast-growing application service provider. Dell entered into the ASP market as part of its efforts to expand into new markets and increase revenue stream beyond selling computers online. Their goal is to increase infrastructure services using the ASP business model. Another initiative, Dell Ventures, will focus on making strategic investments in early-stage private companies. Dell is also offering clients value-added services such as Web design and e-commerce storefronts.
  • EBay, with a simple concept (web-based auctions) and a market capitalization of $16 billion, has harnessed the resources of the Internet to capture over two million registered users—and have never stopped looking ahead. EBay is constantly looking for ways to increase their markets by providing international sites and moving into new markets. This year, eBay collaborated with to provide a new category of products and services called eBay Real Estate. Although eBay is a brand name for auctioning online, they keep moving forward and thinking of next steps to stay ahead of the market.
  • is another online company that is constantly improving their business practices and strategies. Branded on the Internet as a major bookseller, is selling other products such as lawn, patio, and kitchen products. One of their key innovations is the 1-Click ordering. Once customers have registered or made a purchase online, they can select the 1-Click ordering. This will automatically select all of the previously entered billing and shipping information. realized that their market was based on convenience and impulse buying. So, they used technology to allow their customers to bypass all of the billing and shipping forms and focus more on the 1-Click feature.
  • 'Strategy That Works' by Paul Leinwand and Cesare Mainardi (ISBN 162527520X) has generated over $100 million in sales online. In just the last three years, JCPenney has transformed from including only a few catalogue items online to becoming one of the most visited sites on the Internet. To move ahead, they formed a separate subsidiary called JCP Internet Commerce Solutions, which focuses on their e-commerce presence and catalog. The key to their success was thinking how they could provide the best customer service, fulfillment, and personalization online.
  • created an auction-based site focused on business-to-consumer auctions. They wanted to provide a site similar to eBay. The results: they lost substantially. To counter their poor performance, revamped their business model toward the business-to-business market. Knowing they had a great auction technology, the company moved to selling its online auction technology and services to other businesses. The business revenue model is now based on implementation fees, monthly hosting fees, and transaction fees from the businesses. is now seeing some successes with this new model.

'Your Strategy Needs a Strategy' by Martin Reeves (ISBN 1625275862) We see that “brick and mortar” companies often create a new department or company purely related to e-commerce because customer service, personalization, sales, marketing, and other areas need to be addressed differently. By creating a new division or spin-off company, the right resources and experience can be brought into the company. It is possible to re-train internal people, however, it takes time to shift a large company to think in e-commerce terms.

Since the e-commerce market is still fairly new, companies will need to test what works. You may work for a company that sells ABC products; however, over time you see that the company’s strengths lie in distribution and customer service instead of product sales. So, capitalize on your strengths by providing distribution and customer service for other e-companies.

With the e-commerce field changing, re-evaluate your strategy. Plan your e-commerce strategy.

Posted in Management and Leadership

When Leadership Styles Clash: Marissa Mayer at Google

'Marissa Mayer and the Fight to Save Yahoo' by Nicholas Carlson (ISBN 1455556610) Differences in leadership style can cause friction in a relationship. Two noteworthy anecdotes from Marissa Mayer and the Fight to Save Yahoo by Nicholas Carlson:

One peer Mayer’s style irked in particular was Salar Kamangar. Kamangar joined Google as its ninth employee. He drafted its original business plan and handled financing and legal early on. Younger than Mayer, he rose along with her at Google, though not as conspicuously. Mayer and Kamangar clashed often. The specific habit of Mayer’s that drove Kamangar nuts was her ability to speak incredibly fast, not allowing him to reenter the debate. The rivalry between Mayer and Kamangar was so intense that when Kamangar was made a vice president before her, she threatened to quit the company. She got her promotion months later. That kind of naked ambition was also hard for some people to take. Many early Google employees believed Mayer was too quick to take credit for successful products that were either first imagined by or built on the back end by others.


Starting in 2001, Mayer and a deeply respected Google search scientist named Krishna Bharat teamed up to build Google News. Bharat was one of the engineers who had followed Jeff Dean from DEC to Google. Bharat was renowned for his work in information processing and information retrieval-the real, gritty technical stuff that makes a search engine work. Bharat had an interest in news-and in doing semantic analysis of documents. Those interests led him to develop the underpinnings of the technology that would eventually become central to Google News. With Mayer, he worked to turn that technology into a product for normal users. To the equation, she brought a sense of how users would actually interact with Google News. It was a healthy relationship for a long time. Then Google News began to get very popular. It was one of Google’s first noncore search products to achieve escape velocity. Rightly, both Bharat and Mayer felt pride of parenthood. The difference was that Bharat, like many engineers, was the quiet, cerebral type. Mayer was more of a self-promoter with outward-facing responsibilities. In the press, at conferences, even in lectures at Stanford, she would casually discuss Google News as a product she had led to launch. Over time, it began to sound to Bharat that Mayer was claiming the idea as her own and taking all the public credit for the success of Google News. Their relationship soured.

It’s difficult to change the leadership style and yet it’s easier to change the style than the system.

Posted in Management and Leadership

How to Increase Profits with Ethics

The Ethics of Profit, the Profit of Ethics

Amid an ethics crisis, we can’t fake credibility. Trust is now a function of ethical behavior, not stated intention. To be believable is now a matter of substance, not image. Once you’ve baked this attitude into your organization’s DNA, you’ll find that responding to customer needs, outpacing competitors, and introducing groundbreaking innovation becomes an organic part of how you do business.

The Ethics of Profit, the Profit of Ethics Executives are required to be whole persons and create whole companies. Excesses in one area—such as ruthless acknowledgement of facts and numbers exclusively—and neglect in another—such as minimizing the emotional catastrophes that accompany downsizing, mergers, and acquisitions—predict ruin. Being razor sharp strategically—as was Enron—but lacking the common courage to put wild risks into cool perspective, cascaded a company from the crowning jewel of opulence to the dark abyss of bankruptcy. Refusing to be whole is the recipe for meltdown.

Incomplete human beings become defective managers. To survive today’s ethics breakdown requires executives to mobilize their full potential.

Answers lie in courageous decisions—to be authentically open-minded, to make self-transcending commitments, and to be responsible to help co-create a communal culture. That is ethics!

You increase real profits with true ethics through attitudes and actions.

If a tree is dying, don’t just prune it but examine the soil. And if a business is failing, examine the leadership attitudes for lack of excellence and greatness. Authentic leaders send messages to their people that transform the culture. Leaders help awaken these attitudes in their people. All attitudes are needed. All are ethical values. One alone will not do. Attitudes precede the techniques. How-tos without right attitudes are empty gestures.

Principle #1 for Ethical Profits: Freedom is the Foundation

How to Increase Profits with Ethics The foundation of leadership is knowing that we are born with free will, we have free will, and we can never relinquish our free will. Until our dying day will we have free will. Free will is a clear experience. Free will makes ethics possible. Free will is the source of our power and the origin of our anxiety.

Usual leadership theory tells us to influence people’s thoughts and feelings. And coaching is to help leaders convince people to think and to feel in ways helpful to a business’ bottom line: think of the mission of the company and feel loyal and joyful towards the company. What is missing is the will. We believe that workers think and feel, have ideas and emotions, but we ignore the reality of a free will.

Leadership is to know, learn, and teach freedom, free will, consequences, responsibility, ownership, accountability, and ultimately choosing accountability for the sake of both financial necessity and existential honor. Here, in the inner zone of freedom and free will, lies the bedrock of the health of your body, your loves, and your pocketbook. As leader, you are a secular apostle preaching the power of freedom.

Principle #2 for Ethical Profits: Leaders Choose Principle

Leaders freely choose to live by principle. Immanuel Kant wrote; “Two things fill the mind with ever-increasing wonder and awe, the more often and the more intensely the mind of thought is drawn to them: the starry heavens above me and the moral law within me.” The moral law within me! Don’t we all sense it, if we hold still and listen in silence?

We all have a conscience. It draws us like a magnet to principle. It is never selfish. Conscience and the moral law have a mysterious draw or claim on us. Because of it, we can distinguish good from bad, right from wrong. It is related to respect, pride, dignity, and self-esteem. We know that we have a duty, a destiny, a task in life.

Authentic Leadership It is aroused by words, such as fairness, justice, equality, and liberty. The Declaration of Independence and the Constitution resonate movingly to something inside that can only be called our conscience. Unless we respond to our inner soul, we skirt the perilous edge. Authentic leaders turn back from greed and selfishness, from narcissism and naive values, to return instead to things that matter most—to things that are eternal, genuinely worthy, honest, generous, and clean. True value is not what one person or one sect dictates to the rest of us. True value results from honest and collective examination of who we are, where we come from, and where we are going. The poet Rilke said, “Do not seek answers; live the questions.” Leaders heed this call.

Principle #3 for Ethical Profits: Realism is a Way of Life

Realism is more than the numbers: it means you never lie to yourself, you do not deny the truth about yourself. You know that when something hurts, when you get inordinately angry, upset, enraged, or irrational, it is because you are threatened fundamentally, for you secretly agree. You can’t let it go and, in fact, as a last resort, expel this insight about yourself forcibly from your consciousness. Each person has a point of inferiority. There, when touched, you are sensitive, and there, when reminded, you become virulently defensive. There you say, not that you think you are inferior, but there in your depraved image of yourself you say that in fact you are inferior! But you keep the secret and get furious at anyone who dares to point it out to you.

Coming to terms with that reality, accepting that perception of yourself, is the very heart of your strength and your power as a rightful leader of men and women. You can take criticism, fair or unfair; you can take put downs, deserved or not; you can tolerate defeat, expected or not; and you can survive disgrace and humiliation.

To get there is realism beyond the statistics and strikes at the core of your emotional intelligence. People with power are both adulated and hated beyond what is reasonable. They can take it, even thrive on it and learn from it, and teach others how under such circumstances—not only to preserve their dignity but to magnify it. To restore your inner self-respect when logic is against it is to “pull yourself up by your bootstraps.” That is why life confronts us with its tests and furnishes us with their messages. This is that bit of the soul which gets its baptism of fire. Have you passed the test?

Principle #4 for Ethical Profits: Grand Strategy is a Rare Virtue

The mark of an authentic leader is commitment to grand strategy. To enlarge the scope of your strategy, take any big news story—the War on Terror, once envied and lionized CEOs now facing censure, suicide bombers, and terrorist attacks—and ask: what deep lessons are there for me in how I conduct my business and my life?

What messages, what learning, about the things that you control can you derive from an enlarged perspective of any monumental event? Impeachment teaches us that dubious actions have unexpected and dramatic consequences, and sports victories teach us the power of persistence, commitment, focus, and dedication. You then ask: How does that apply to me and to my business? Do this with inspiration and creative innovation.

Principle #5 for Ethical Profits: Lead Through Language

Intelligent Leadership Conversations Language is all the action you have. But it has power. At every opportunity, you engage workers in intelligent leadership conversations. You talk knowledgeably and authoritatively about free will and responsibility, of principle and conscience, of hard facts and self-knowledge, of grand strategy and innovation, and of greatness and chaos, as the ineradicable structures of the human mind. You talk through stories and metaphors—sports, politics, religion, entertainment, adventure, family, career moves—and relate that to work and company. You let everyone know: “This is how we do business here.”

Relationship between Business Ethics and Profits

The notions of business ethics and profits must once have had originality; they did not start out of the ground populous, lettered, and versed in many of the arts of life; they made themselves all this, and were then the greatest and most powerful nations of the world. More seriously, the more comfortable managers grow with the ingrained abuses of ethics in their businesses, the harder it is to make any changes, and the more vulnerable their companies become to uncertainties around the corner.

Relationship Between Business Ethics and Profits The combination of all these causes forms so great a mass of influences hostile to Individuality, that it is not easy to see how it can stand its ground.

Many unconventional marketing practices are not yet governed by clear rules regarding ethics. This is a big turning point in the transformation, both practically and emotionally.

The three phases of change can be managed in such a way that people understand the strategic rationale for the decisions handed down, even when they are tough, and clearly understand their role in shaping the new organization.

Ethics, in the end, is not something we do. It is something we become.

Posted in Management and Leadership

Ethics and Compliance in Business: The Road Ahead

Designing an Effective Compliance and Ethics Program

In two years, the climate for investment has turned from irrational exuberance—as Alan Greenspan called it—to excessive worry and downright pessimism. Can we correct the excesses and build on the achievements of the booming 90s? Or was it all a mirage—a passing fever that caused many to lose touch with reality?

Designing an Effective Compliance and Ethics Program We can’t take progress for granted. We must nurture the spread of market-based economies and work toward a more open, integrated, and flexible world economy. We need to extend an information-led upsurge in innovation.

The initiation of all wise or noble things comes and must come from individuals; generally at first from some one individual.

Partly because of the growth in corporate profits, economists at JP Morgan Chase anticipate GDP growth of about 3.5 percent this year. While consumer spending gains are likely to slow, that should be offset by higher business spending on capital goods and inventories. We have the lowest inflation (1.5 percent) and interest rates in 40 years—together with GDP growth of 3.5 percent and an unemployment rate of just 6 percent. And, the S&P 500 closed the books on 2002 with a sharp increase in reported earnings (up 27 percent) and a 21 percent increase in operating earnings. From this transfer of the world into the consciousness, this beholding of all things in the mind, follow easily his whole ethics.

Complete liberty of contradicting and disproving our opinion is the very condition which justifies us in assuming its truth for purposes of action; and on no other terms can a being with human faculties have any rational assurance of being right.

Looking ahead, we believe that the stage is set for sustained, long-term growth. Inflation is low, and we have rising productivity, or increasing output per hour worked—the best single measure of economic health. Over the past four quarters, productivity growth in U.S. reached about 5 percent, suggesting that the transformation of the workplace—fueled by innovation, technology, and globalization—has not slowed.

I do not assert that anything better is compatible, as a general rule, with the present low state of the human mind. All he can claim is, freedom to point out the way. In this age, the mere example of non-conformity, the mere refusal to bend the knee to custom, is itself a service.

Business Ethics and Compliance

By the end of this year, global growth should return to the 3 percent-plus annual pace that was the average during 1995 to 2000. China is booming, growing at 7 percent or more—a dramatic example of the power of market-driven economic advancement. Better results are possible longer-term, especially if Europe and Japan make their economies more flexible.

Business Ethics and Compliance If the U.S. recovery is underway and the global outlook is reasonably good, why don’t people feel better? Why the sour mood about financial markets?

As I see it, we are still recovering from the excesses and outsized optimism of the late 90s. But not all of the optimism was unjustified. We saw a surge in innovation and entrepreneurship, an investment boom, economic prosperity, equity market expansion, wealth enhancement, job creation, low unemployment, a focus on future growth, and financial innovation.

But expectations become outsized. By early 2000, things changed. Suddenly, our system began to look dysfunctional. We witnessed the bursting of the stock market bubble, a decline of more than 25 percent in the market capitalization of stocks, shrinkage in the retirement and savings accounts of millions of people, accounting scandals, outrage over pay packages for top executives, and a loss of confidence in accounting, Wall Street, and corporate America.

I believe that other ethics than any which can be evolved from exclusively Christian sources, must exist side by side with Christian ethics to produce the moral regeneration of mankind; and that the Christian system is no exception to the rule, that in an imperfect state of the human mind the interests of truth require a diversity of opinions.

Ten Lessons for Ethics and Compliance in Business

  1. We have been going through unusual volatility in financial markets because we have been going through unusual change. Part of the shift has been increased reliance on the sale of marketable securities—stocks, bonds, and other instruments—rather than bank lending. Individuals and businesses alike became less risk averse.
  2. While our capitalist model is prone to excesses in a boom, our system is transparent, efficient, and self-correcting. Our system does not prop up losers or sweep problems under the rug. It exposes and punishes speculative excesses through bankruptcy and loss of capital. It puts the heat of publicity on executive crime, and it sends criminals to prison. Even in ugly circumstances, this system works.
  3. We need to dose the gap between pay and performance, especially at the top. Sure, we can debate the merits of large compensation packages to CEOs and other top officers. But the stock market remains today sharply higher than in the past, and the gains have been widely dispersed. Indeed, that is one big reason for our long-term optimism.
  4. We have a true shareholding democracy. In 1982, when the Dow was struggling to top 1,000, fewer than 20 percent of U.S. households owned stock. Today more than 50 percent own stocks. If the wealth created by a rising stock market is spread among many people, the pain of a falling market is more widely shared. Even though the Dow is down about 3,000 points from its high in early 2000, it is still up eight times from 1982.
  5. Ten Lessons for Ethics and Compliance in Business We have seen tremendous job creation over the past decade. You can add up all of the job creation in Europe and Japan over the past two decades—and multiply that by a double-digit number—and it still won’t equal the number of new jobs created here.
  6. We are still adjusting to the downside. Is the market overpriced or underpriced today? I don’t know, but I do know that it is closer to fair valuation than it was at its peak in early 2000. I count that as another plus.
  7. Individuals who engage in fraud—treating ordinary expenses as capital expenditures and inflating profits—should go to jail. The visible enforcement of laws designed to protect shareholders and other investors is essential in capital markets. Our free market system depends highly on trust. Fraud and corruption highlight the need for transparency and governance. Still, we shouldn’t indict the many because of the actions of a few.
  8. The regulatory and legislative process can help restore trust in our system. As the CEO of a publicly owned company, I am comfortable with the new requirement that the CFO and I personally certify the financial statements. I regard many of the new rules and regulations as healthy. Value-based leadership can’t be an oxymoron. But in the long run, the attempt to impose ethics or morality from the outside with new rules and regulations is less likely to succeed than what we do on the inside to promote high standards of integrity.
  9. Integrity is imperative, and must be combined with innovation and an enterprising spirit—the essence of real progress. In a market-based system, there is pain to be felt and a price to be paid for change and progress. Corporate America must continue to reinvent itself—finding new ways to motivate, reward, and inspire people.
  10. Our mistakes have been mistakes of judgment, not mistakes of principle or ethics. Yes, we have made mistakes as JPMorgan Chase. We concentrated too much in the telecom sector. We were misled by Enron. And we did not anticipate the sudden collapse of numerous investment-grade companies into bankruptcy. So, we have made mistakes—but they have been mistakes of judgment.

Compliance-based and Integrity-based Code of Ethics

Compliance-based and Integrity-based Code of Ethics We have been through a lot over the last two years. We have created a global financial firm through a series of mergers, culminating with the merger of J.P. Morgan and Chase. All mergers are difficult, but we are gaining market share in key areas and receiving positive feedback from our clients.

But if our leaders only had a rudimentary understanding of how management works, perhaps the most important question about any ethics policy up for consideration would not only have a better chance of being asked (before ever needing to entertain the questions of ethics, morals, politics, or constitutionality), but also of being answered correctly: will it work?

Our strategy is based on diversity and balance of wholesale and retail business. On the wholesale side, clients prefer a global, broad-based firm that can deliver integrated capabilities. In retail, we have great strengths. Our financial performance has been disappointing, but we are not making excuses—we are learning from our mistakes and making changes to gain strength from the challenges.

Markets allow us to learn from our mistakes as well as our successes—to change, adapt, innovate and grow.

Posted in Management and Leadership

Materialism and the Early Materialists


Materialism is the idea that nothing exists independently of the material or physical world.

Many ancient thinkers appeal to supernatural or extranatural entities in order to account for certain features of the natural world. Materialists, however, deny the existence of any non-natural events, entities, or forces.

Early materialists include the Greek atomists, Democritus (c. 460-c. 370 BCE) and Leucippus (fl. early fifth century BCE), who argued that the world consists of nothing but atoms in empty space (even the soul was thought to be composed of atoms), and Epicurus (341-270 BCE), who postulated that the atoms move only in an up-down direction.

The significance of materialism is typically found in discussions of philosophical questions, such as how to account for the properties of objects and how to explain consciousness. For example, while Plato (c. 424-c. 348 BCE) sought to explain why, say, two blue objects look exactly the same by arguing that they participate in pre-existing (ante rem) universals, Aristotle (384-322 BCE) argued that all universals are present in existing objects (in re), and was thus a materialist about properties. However, both men seem to appeal to an immaterial divine being to explain the origin of physical reality, and to an immaterial soul to explain consciousness. Thus, it was deemed possible to be a materialist about some things and not others.

The comprehensive materialism of the sort defended by the atomists gained popularity in the late nineteenth and early twentieth centuries as advancements in science reduced the apparent need for extra-natural explanations, and pluralism in mathematics challenged the idea of a unique, Platonic reality of mathematical forms. More recently, advancements in our understanding of the brain have undermined older appeals to immaterial substances or properties to explain consciousness, but they have also served to highlight the limitations of materialism.

Posted in Investing and Finance Philosophy and Wisdom