How not to pitch a venture capitalist

Birth of crisis in management

When analysing the current financial and furthermore the real economic crisis, it is obvious for me that we will find the origins in management. 

Since the 1990's managers have concentrated extensively on shareholder value. Their main goal was to make the shareholders rich instead of thinking of survivability of their company. No savings have been made and the profits were not used to invest in future opportunities. The profits have been appointed to the wrong people.

So, the investors felt that they would be cuddled by the board of directors. Their needs, expectations and requirements seemed to be the most important thing for the C-levels. The gamblers took pride of place and the "high value bulb" burst - deflationary recession took place. The managers have to take on responsibility for this.

The purpose of a company cannot only be making the investors happy. Peter Drucker said in the past: "There is only one valid definition of business purpose: to create a customer." I admire Peter Drucker very much, because I had to realize manifold that he was right in many cases regarding management. And, once again he was regarding this. Companies should concentrate on increasing customer value. 

False doctrines in management lead us to the current crisis. And now we are trying to solve the problems with measures (new debts) which brought us into this situation. But that is another topic.

 

Followers Gadget

I have added a followers gadget to my blog on the upper left side.  What is it? If you are a fan of my blog you can register yourself there and your blogger photo will be displayed on my blog. Readers of my blog can see that you are following my blog and that you have some interests in common. As your photo is a direct link to your blog it is also a good opportunity for promoting your blog. So, especially when you are also blogging about management or business topics, I would like to encourage you to register as a follower to my blog. Thank you in advance for your assistance!

Jim Collins interviewed by Charlie Rose on Good to Great

Jim talks about the findings he got when analysing companies who made it from mediocrity or good to great. The video lasts nearly an hour, but it's worth the time, even if you have already read the book or not. Honestly said, I admire Jim for his way of management thinking his focus on simplicity, which we all need in the complex business world.

Watch the interview here:

Productive Talk on Implementing GTD

I have started to organize my tasks and projects according to the "Getting things done" methodolgy by David Allen. Besides reading his book I have already changed some of my work habbits. And, honestly said, it is already leading to a more effective and efficient work. Listen what David has to say about implementing his method - click the link below: Productive Talk on Implementing GTD

Byron Soulopoulos Official Blog: Most Innovative People Award for Most Inspiring Ideas#links

One of my dear friends has been arwarded for most inspiring ideas at the World Summit on Innovation and Entrepreneurship in Dubai. Congratulations, Byron, you did a great job. Byron Soulopoulos Official Blog: Most Innovative People Award for Most Inspiring Ideas#links

Rebound after Career Disaster

Setbacks, adversities, dismissals and bankruptcies are hushed up in our successful society. But success is a two edged sword and the border between success and failure is a very thin line. There are more leaders affected by this problem than we would imagine. Some of them rise Phoenix-like from the ashes, some of them never regain their reputation and career. But how do great leaders rebound after a disaster? Jeffrey Sonnenfeld did a survey about this and interviewed more than 100 leaders, who were able to rebound.

Here are his conclusions as a five step process:

• Fight, not flight – the ability to face up to the reality of the situation and distinguish those battles that need to be fought to restore reputation from those that drain energy and purpose.
  
  
• Recruiting others into the battle, effectively using the support networks available while recognizing the collateral damage felt by these key others as a result of the downfall.
  


• Rebuilding heroic stature through rationalizing the events that led up to the downfall, providing answer to the question “Why did this happen to me?” that enables the leader to put the event into context and provide a rational explanation to others, thus allowing the rebuilding of reputation.
  


• Proving your mettle. Regaining trust and credibility utilizing the creative skills of bricoleur to improvise based around defined approach to solving the problem to start on career rebuilding.
  


• Rediscovering your heroic mission by reconceptualising the deep-seated purpose of past endeavours to chart a new course.

So, if you are in this situation right now or maybe will get into it in the future, take the advice and read the whole book.

Attitude beats Ability

Getting the right people on "the bus" is a task every manager has on his/her to-do-list. This is not an easy job since good people are rare on the market. The "Super-Duper-Can-Do-Machines" we are targeting are hard to find.


We need employees who already have worked in our business line to get started very fast, because we don't have the time for introductory training in. They need to have specialized know-how in their functional occupational area and social skills as well. But, be honest with yourself. How many people, you have hired, did fit all these criteria to 100% at the moment you decided to get them on board?


So, which are the core points we should look at, taking under consideration that we might not find the employee who fits all criteria on our wish-list. I call them the "Attitude beats Ability"-criteria. There are people's characteristics which are more important than business line experience and functional occupational skills. Lacks in these areas can be solved through training. If your people have lacks in the following characteristics than you have got a real problem.

· sharing the core values of your company
· disciplined work
· self management
· holding absolute responsibility

Even if one has no experience in your business line or does not know a specific topic in his/her functional area, by working along the characteristics above he/she will master the job. By understanding the core values within your company he/she will work together with all team members addressing the same results (effectiveness). Disciplined work and a good self management are leading to efficiency and holding the absolute responsibility will guide your employee to measures which are necessary to do a good job, even closing the gap he/she is facing. "I do whatever is necessary to be successful on this job" is the right attitude. And, you cannot train a person to learn this. Attitude beats ability, full stop.

10-20-30 Presentation Rule

See what Apple Macintosh's former chief evangelist Guy Kawasaki has to say about Powerpoint presentations and please stick to his advice.

Poll on Management

A new year has begun. And, I will come up with a lot of new topics this year. You can be curious.

As a first measure I've added a poll to my blog. You can find it in the left area on the page, directly below the "About me" section.

The first topic is about management main tasks. I am wondering on what you as a manager concentrate most while leading your organization. There are so many tasks in managers' lifes and also many attributes managers should have. If you read specialist magazins they will tell you what you ought to be and on what you should concentrate. But, what do you realy do during a work year?

Reflect upon your main tasks and vote. This poll runs until the end of January 2008. If you are interested in a particular topic in the future do not hesitate to inform me about it.

Monday Morning Messages

Wouldn't it be nice to have every Monday morning an inspiring message on leadership in your inbox? Maybe just in the upcoming new year? Then visit Monday Morning Messages to subscribe to Bruce A. Rector's newsletter. I enjoy reading Bruce's news every week because he tells stories from his personal life in connection with leadership topics. The stories are amusing and providing thoughts to reflect upon as well.

Bruce Rector is a past president of JCI (Junior Chamber International) a 200,000 member strong organization of young leaders and entrepreneurs from 110 countries. He lives in Lexington, Kentucky, U.S.A. where he is a parnter of a law firm. As a speaker, moderator, facilitator and writer, Bruce Rector helps people and organizations improve their condition. He has presentation experience in more than 40 countries and on four continents.


52 of his stories are also published in his book "Monday Morning Messages", which provided me with leadership lessons for one year - a great idea. It's incredible how he extracts leadership wisdom out of daily circumstances. I can only recommend his messages to every manager.

The Philosophy of Strategy

The business year is coming to an end soon. Many business leaders and entrepreneurs might be thinking about their objectives for the coming year(s). So, it out to be also a good idea to think about your business strategy as well. Is it still be going strong? Does it lead to the right results? Do I have to make adjustments or even developing a completely new strategy?

Strategy has always been a topic I have thought about to get a deeper understanding of it.

What is the philosophy behind business or competition strategy? During my over 20 years experience in my professional life I had to learn some lessons in connection with poor strategy development and execution - sometimes the hard way.



Anticipate future impacts

When I talk to owners of SMEs I often hear: "Usually, I do strategy development from my intuition." Sorry, this can't be a strategy but at the utmost a tactic. Intuition is based on experience. And, experience does not really guide you to a successful business strategy because you have to anticipate the future impact of your current actions. During stable times experience (in connection with strategy) was worthwhile. But, if the considerable economic assumptions loose their validation, experience becomes a minor role.

In fact that the markets change rapidly, companies can't rely on experience anymore when changing their strategies. Or, as Boston Consulting’s chief strategist Bruce Henderson said: “Tactic can be deduced from experience, strategy can’t.”

Even the military strategists from the past knew this philosophy behind the strategy. According to Carl von Clausewitz strategy is the combination of several battles (tactics) to win the war (strategy).

Strategy needs competition

Probably, the basis for strategic planning can be found in the military planning in war times. So, you are facing always at least one opponent. Strategy is the long lasting, not visible management of a system. And, in every system you are dealing with competition. It may be in business world, your personal career or even in sports. The strategic maxim reads as follows: Violate the existing competition system again and again. The only rule is, breaking existing rules. Strategy is based on singleness and singleness is based on elimination. According to W.E. Deming 85 percent of failure depends on the system – and the system consists of competition. Many companies are seeking for better solutions, which are already existing on the market (Benchmarking). Benchmarks are important in daily business, but not in strategic planning, because they aren’t new and not surprising the competitors. And, strategy has to be surprising for your competitors, so don’t talk about your strategy in publicity. 500 B.C. general Sun Tzu Wu said: “All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.”

I have experienced that these two points, anticipating the future impacts and competition orientation, lead to effective strategies. You are invited to enclose them into your strategic thinking. I wish all of my readers a prosperous and successful 2008.

Santa Claus is coming to town

Oh! You better watch out, You better not cry, You better not pout, I’m telling you why:

Corporate Citizenship - Citzens from Business

There is no one clear, operational definition to understand the term Corporate Citizenship (CC). This concept is often composed of the same meaning as Corporate Responsibility or Corporate Social Responsibility. Corporate Citizenship describes the commitment of the citizens within a corporation.

In the United States, corporations who consider their social obligation as an important condition for the company’s success has become a matter of course. In Europe, mostly larger businesses are following this path and have given the idea of citizen commitment more thought. The motive for these corporations to take part in Corporate Citizenship differs. Some see it as their moral commitment, others as a way to give back to the community in appreciation of their success. Still others consider Corporate Citizenship as a way to insure their own existence.

Corporate Citizenship goes way beyond the scope of financially-orientated donations and corporate sponsoring. All the resources in a business such as money, human resources, technical know-how, organizational capabilities and even the existing knowledge beyond the core business could be made available to society on a certain scale.

There is also an opportunity to work together with charitable non-profit organizations (social institutions, associations, societies…) in CC.

The following services are possible:

• Donations, sponsoring, endowments/foundations, interest-free loans


• Professional know-how, lobbying, information, contact procuration


• Machine leases, building/space leases, office leases (including equipment, such as copiers, car pools, etc.) Consulting services, order transfers
  

I think that Milton Friedman was wrong when he said: “The social responsibility of business is to increase its profits.” From my point of view profits have be to gained to keep survivability of the company – full stop. The social responsibility is a question of responsibility of entire human beeings and companies consist of them.

Unpopular Decisions - Firing People

Firing people is a process hated by everyone. It is unpopular, sometimes it makes managers feel guilty and nobody likes to tell the truth about why it is happening. Often it is blamed on the market conditions, competition, or whatever else.

Managers are responsible for laying off people and nobody else. They should have a look into the mirror and take on responsibility for their decisions. In such a situation a manager should simply say, “I made the decision. This is what we are going to do.” If you do not have the courage to do this, do not be a CEO. In the case of “mass firing” the people getting laid off are not “at fault”. More likely, it was the fault of the top management – the same top management with golden parachutes. At the very least management should provide services like job counselling, resume writing assistance, and job search help. There are firms that specialize in helping employees during “transitions”.

As painful a layoff may be, it is a good time to terminate marginal employees. It is good for the marginal employee, because he is not tainted with getting fired. He can blame on the management because of mass firing.

Sometimes managers show the people they are firing how hard it is on them. It is like the boy who murders his parents and then asks the court for leniency because he is an orphan now.

Once you decided to layoff employees, just do it, and take on responsibility for what you are doing.