The Hindu Business Line : Sleepless over ‘people’ worry?

Normal managers lose sleep over “poor cash flow, impending lawsuits, a failing strategy, mergers and acquisitions gone awry, a competitor making a direct move against a profitable product line, and so on.”

But what can make successful managers sleepless is the ‘people’ worry, because they know that their success “grows directly out of the ability to choose the right people,” says Claudio Fernandez Araoz in Great Peo ple Decisions ( www.wiley.com). “Organisations that are skilled at solving the ‘people puzzle’ — finding, recruiting, hiring, promoting, and retaining the very best people for the job — tend to thrive.” As much as picking the right person is important for the organisation, so is the right career choice, for the individual.

The author cites ‘Career Imprints: Creating Leaders Across an Industry’ for the ‘Baxter Boys’ finding of Monica Higgins. “Based on her study of 300 biotechnology companies and 3,200 biotechnology executives, Higgins concluded that a single firm — Baxter Labs — was the breeding ground for an astonishing number of successful biotechnology spin-offs and startups.”

Similar examples from other sectors that Araoz mentions are Hewlett-Packard and Apple in high-tech hardware, and Fairchild in the semiconductors. Putting yourself in a hotbed of innovation is better than putting yourself in a backwater, he advises.

Another nugget of insight, from among the hundreds that the well-researched book presents, is in a chapter titled ‘how to attract and motivate the best people’: that firms with collective incentives share much more knowledge, and are indeed far more profitable, than those that reward individual performance (a finding by Professor Marshall W. Van Alstyne, who teaches Information Economics at Boston University and conducts research at MIT).

What do candidates look for, first and foremost, when they take up a job? “Not more money, but a job where they can do their best, with a challenge that perfectly matches their skill level, in a place where they will grow and develop, in an organisation they like, with a good boss and great group of peers,” says Araoz, from his two-decade-plus executive-search experience.

Conversely, most people don’t leave jobs because of money issues, he adds.

“They leave bad bosses and frustrating situations. If there is a good challenge, a good fit, and a good boss, the right candidate will be motivated.”

Great read.

Mine data for profits

An intelligent study of data can make a vast difference to your approach to profitability. The 80/20 rule is a classic example. Studying wealth distribution in Italy, Vifredo Pareto, a nineteenth-century economist, observed how very few people controlled the country’s wealth, narrates Richard Ilsley in Best Practice (Westland).

A general application of Pareto’s finding is that the majority is accounted for by the minority — around 80 per cent of the results are accounted for by around 20 per cent of the effort.

Turning it around, Ilsley presents a scary proposition, thus: “A significant number of your activities produce very little return and some of your activities are likely to produce nothing and are probably a net cost to your organisation.”

How so? Here is an example: “A newly appointed senior manager asked for a profit analysis by customer, for the organisation. Imagine the manager’s surprise to discover that the top 20 per cent of customers were worth 120 per cent of the profits! The manager sent the figures back to the finance department to be corrected.

The figures were duly returned with a note to confirm that they were in fact already correct.”

The other 80 per cent of the customers were not contributing 20 per cent of profits as per 80/20 rule, but causing a loss of 20 per cent, explains Ilsley.

Check if embedded truths and best practices are waiting to be mined from your data depths.

Steer clear of ERP myths

ERP is not a silver bullet or a cure-all, says Alexis Leon in Enterprise Resource Planning, second edition ( www.tatamcgrawhill.com). Though “today’s ERP tools automate most business functions and processes thus making the lives of the users a lot easier,” it can be ‘a recipe for disaster’ to assume that these tools will take care of everything. There are many business activities that need human intervention and judgment, cautions the author.

Another myth he debunks is that one ERP package will suit everybody. Solutions differ ‘in features, capabilities, size, functionality, price, technical support, customisability, scalability, and so on’, and organisations too differ from one another. “Selecting and purchasing an ERP tool without analysing whether it is suited for the organisation will have disastrous consequences.”

Starter material.

Net for sensible retailer

John Castell’s Big Ideas for Small Retailers ( www.jaicobooks.com) is a small book with workable ways to improve your business. Such as, leveraging the Internet to revolutionise your customers’ shopping experience. The author, ‘an amateur Web-designer and an established retailer’, lays bare the conflict right at the start. “The Web designer part of me felt the need to demonstrate a good technical knowledge and superior design skills. This tends to lead down the path of flashy graphics, background music loops, form interaction, animated scenes and so on.”

But since everything creative is subjective, Castell allows ‘the sensible retailer in him’ to look at the opposite, as follows: “A fast loading site, easy on the eye, and above anything else, the ability to allow customers to buy the products without distraction.”

A book for the shopping cart.

Not by tech alone

Realising that customer databases hold a lot of revenue potential, IT (information technology) suppliers have created ‘a proliferation of technological offers, designed to collect, analyse, and make accessible data for use in marketing campaigns’, write Paul R. Gamble, Merlin Stone, Neil Woodcock and Bryan Foss in Up Close & Personal, third edition ( www.vivagroupindia.com).

The authors warn the CRM (customer relationship marketing) enthusiasts that technology alone cannot make the expected improvements in performance. “Business processes and company cultures need to be changed in parallel… Just because a capability exists, does not mean that people will use it or use it correctly.”

An example the book mentions is of a financial services firm which noticed that salespeople were failing to enter information about their customers into a $20 million CRM system, “because they feared losing their individual sources of advantage to their colleagues, who could also see the data (Bates et al, 2003). The company is doubtful it will ever get value from its investment in CRM.”

Too close for comfort?

Add face to ‘virtual’

STSP, STDP, DTSP and DTDP. Do these sound similar to DSDD, ‘double-sided double-density’ of the ancient floppy days? Well, these abbreviations stand for different types of meetings: same-time same-place (face-to-face); same-time different-place (videoconferencing); different-time same-place (computer databases); and different-time different-place (Intranet bulletin board).

Even when a team primarily interacts via technology, there is value to STSP meetings, argues Daniel Levi in a chapter titled ‘virtual teams’ in ‘Group Dynamics for Teams’, second edition ( www.sagepublications.com). “Face-to-face interaction is important for celebrating major team milestones and dealing with minor changes in the team’s focus or task.”

Recommended addition to the project manager’s shelf.

Tailpiece

“Do you believe in life after…”

“Death?”

“No, after second life, in the virtual world?”

dmurali@thehindu.co.in