Is the definition of Value equal to a Return On Investment?

Recently I heard a definition of value from an executive of a software company. The definition went something like this: “Added value is the pain that is solved for a given business”. In this case, it is the pain that a software solutions provider can solve for a given business doing an ROI (Return on Investment). Say a customer is having problems tracking and processing orders. A Software sales person comes in and does an ROI to be of "value" to the customer.

The questions begin with, how many orders to you process a day/week/month/year? What is the average order amount and how many orders are canceled or lost because of poor handling?

Say $50 per order is the average, 1000 orders are placed per month and 250 orders are canceled or lost due to poor handling. This ROI formula can be summed up in this question: how much does it cost not to solve a given problem? The ROI could also revolve around different problems.

Now that I have numbers, I can do my math. 1000 orders per month X $50 per order = $50,000 in revenue per month. Now take 250 canceled/lost order X $50 per order = $12,500 in lost revenue per month. This equals to $150,000 in lost revenue a year.

After the ROI analysis, the customer is proposed a solution to solve his or her pain for $150,000 which will give the ROI in 1 year. Great! The sale is done. Hold on a minute. If you are my reader, I hope you are skeptical at this point. Think about it for a minute. The ROI formula = value is ineffective and here is why.

First, I have so far to see any software sales person use the ROI formula successfully. Software sales people do poorly in consultative engagements and business analytics. Any consultant who is good at what he does and who has the customer best interests in mind should know the shortcoming of an ROI analysis. My suggestion is that software sales people and executives buying into simplistic ideas such as a ROI should use them on their own organizations first.

ROI falls flat on its face as a value proposition because the first problem is: how do you measure an ROI? What I have presented above looks really good in theory. Using it practically is a different story. ROI is mostly guess work at its best when attempting to solve problems in poorly managed businesses and not easy to do in well managed businesses. If a given business has a poor system for tracking orders, how will they have anything in place to come up with realistic numbers as outlined above? But let's say a business owner makes a decision to buy a solution if a software sales person manages to persuade him base on ROI analysis.

If the decision is solely made on ROI, then these questions must be answered. Who will be responsible and accountable for measuring the ROI after the sale? Will the software sales person take on this role or someone else? What if the ROI is never realized? How does that speak about the competence for the software sales person?

Most business executives with all kinds of problems in their organizations are afraid to have a realistic look at the unrealized revenue in doing things poorly, never mind doing a realistic ROI. For the software vendor, the billable hour is the cap on unrealized revenue. For the business with poor order tracking, it is a pricing strategy that is lacking. It is a matter of facing real problems, which if pointed out to the executive or software sales person, would either not know what to do or avoid facing them.

Let's say a consultant is faced with a problem to be solved. After asking realistic questions and unable to get strait answers and facing resistance, he or she should know when to back off instead of just making another software sale. Software sales people sell software and have a very poor concept of value selling and consultative engagements.

Granted, on a technical level a ROI analysis may be useful but as a value proposition it has no merit. Value is subjective to the customer and should that involve a ROI analysis it could be part of a value proposition, perhaps only a very small part. Value is created based on perception and then captured by a strategic pricing model. It is multidimensional and simplistic thinkers do poorly with multiple causes and seeing whole pictures.

To actualize a value proposition, one needs to have a good understanding of economics and pricing. Also as an organization, visionary leaders will be crucial in creating and capturing value. For the software vendor, the billable hour stands in the way of creating and capturing value. The most evident of this is in demoralizing and undermining the knowledge worker by the leaders in software vendor companies.

Quote on thinking

I've been traveling in the last while and perhaps a lack of inspiration, so I have not posted for a while. For today it is an inspiring quote from a book I'm reading right now. The book is called The Road Less Traveled & Beyond by Scott Peck. It’s the second time I’m reading it.

"It should go without saying you can't truly communicate well if you don't listen well, and you are unable to listen well unless you are thinking well"

Time, a unique resource

Here is a writing from Peter Drucker on time.

Time is also a unique resource. Of the other major resources, money is actually quite plentiful. We long ago should have learned that it is the demand for capital, rather than the supply thereof, which sets the limit to economic growth and activity. People -- the third limiting resources -- one can hire, though one can rarely hire enough good people. But one cannot rent, hire, buy, or otherwise obtain more time.

The supply of time is totally inelastic. No matter how high the demand, the supply will not go up. There is no price for it and no marginal utility curve for it. Moreover, time is totally perishable and cannot be stored. Yesterday's time is gone forever and will never come back. Time is, therefore always in exceedingly short supply.

Time is totally irreplaceable. Within limits we can substitute one resource for another, copper for aluminum, for instance. We can substitute capital for human labor. We can use more knowledge or more brawn. But there is no substitute for time.

Everything requires time. It is the only truly universal condition. All work takes place in time and uses up time. Yet most people take for granted this unique irreplaceable, and necessary resource. Nothing else, perhaps distinguishes effective executives as much as their tender loving care of time.

Man is ill-equipped to manage his time.

Peter Drucker

Quality Customer Service, Why it matters

In just over a week I will deliver a speech at a local toastmasters club on Quality Customer Service. The title is "Quality Customer Service, Why it matters". If my recording equipment will work well I plan on posting it here on my blog as youtube video.

I'm reading a captivating book on customer service. The book is called "The Only Thing That Matters" by Karl Albrecht. He states that service and quality go together. Quality service he says must be introduce to the whole organization and it is about delivering value to the customer. He points out how so very few businesses get this. The book was written in 1992 and his message still holds true for today.

A quote from the book, "If we're talking about a 'service-driven,' 'customer-focused' organization, we've got to design the operation to work that way. It's more than just a slogan or a training message. It must involve the way we conceive the total product, market it, design the delivery system, program the computer, communicate with the customer, train the employees, and all the rest. And when it comes to the expensive computer systems, if you get it wrong, you stay wrong for a long time."

To adapt a total quality customer service experience is an on going process and takes a lot of thought and risk taking. Individuals of organization who are not willing to take a risk will falter.

Jim Estill recently wrote a blog on risks and made this statement, "Without risks, companies will not be able to thrive."

Old Dogs Don’t Create New Tricks

I read another inspiring essay by Ron Baker called “Old Dogs Don’t Create New Tricks”

Here are a few quotes and the link to the essay

“If firms, not to mention the profession as a whole, want innovation and dynamism in tandem with attracting the best and brightest talent, they will have to give more authority and responsibilities to their youthful team members. Organizations, like arteries, tend to calcify with age, and young team members––far more prone to adventure and risk-taking––can keep the blood pumping at an extra vigorous pace. No doubt they will make more mistakes and incur more failure, yet risk is where profits come from. The alternative is continued irrelevance of a once proud profession, more and more dependent on regulatory revenue rather than wealth creating innovations that add value to its customers. Ossification is not an option."


“The question for today’s firm leaders is will they allow their young team members the opportunity to create path-breaking services and experiment with new approaches for the benefit of the firm and the profession as a whole, or will they continue to reject too much and adventure too little, remaining satisfied with a settled mediocrity of success and the illusion of security. The posterity of our profession depends on letting the new dogs create new tricks. History proves no one else will."

For the whole essay click here

Book Review

Ron Baker has written a fascinating book on pricing.

Rarely is pricing done for the purpose of creating value for the customer. The strategy for pricing put forward in this book is to create and capture value for the customer.

In just about any given business, prices are a result of cost, tracking the margins and other methods that don't take the customer in consideration. It is looking in to the past and not the future. Ron proposes a different strategy for pricing, a strategy to price on propose, as the title of the book suggests. It is value, not cost, that determines price.

What I found the most inspiring in the book is the introduction of a CVO (Chief Value Officer) in to an organization. Ron profiles the world's first CVO in the book.

Ron states that the characteristics of a CVO are to "understand that there is nobility in getting paid what the company is worth. Nothing is more satisfying than customers who believe—and act on the premise—that they get what they pay for. Perhaps the first important characteristic of a successful CVO is high self-esteem; they believe that their company's product and services are worth every penny they charge. They are more concerned with developing a value proposition based on value, not price."

I highly recommend this book. It has already become a reference book for me as I learn more about running a successful business.

I will post another blog with a few quote from an essay I read today from Ron.

My Bookshelf

I recently was recommended this site http://www.shelfari.com/

It is a very useful resource for book lovers. I can post the books I have read, currently reading and books that I want to read. And then also write book reviews, invite friends and see what's on their bookshelf as well. This will motive me to write more book reviews and I also plan to post the book reviews on my blog.

I have my bookshelf on my blog (scroll down...it is on the right) and also on my personal site here http://www.gpeters.ca/bookshelf.html

If you want to see my reviews place your mouse cursor on a given book and you will see a pop up with my review and additional information about the book.

Happy reading!!!

Get Smarter : Life and Business Lessons

Get Smarter : Life and Business Lessons by Seymour Schulich's book came to me as a recommendation by my mentor Jim Estill on his blog.

It is an easy read. It took me about 3 hours to read it. I recommend it but it is shallow in certain areas.

When the author writes on Sex, Love and Friends it is shallow. I would suggest he sticks to giving business and investment advise which is an area he knows a lot about.

The book is made up of 49 short 2 to 4 pages chapters and then two blank pages in between. Also large font and lots of spaces used. Not a tree saver but he touches on environmental issues a bit. Maybe he should take his advice on the environment more serious. Perhaps it is the publisher responsibility.

I give it three out of five stars.

John Wooden on Leadership

I tend not to read much on leadership anymore. Much of the literature on leadership today lacks in quality. But I do come across some good information on leadership here and there.

Since I’m a toastmaster’s member I get the quarterly magazines from Toastmasters International.

The most recent issue has a great interview from John Wooden know as Coach Wooden. The article got my attention because of his track record. Not only does he speak on leadership but he has been a great leader (he is 97 years old). He coached at the University of California (UCLA) from1948 to 1975 and won 10 U.S. national championships.

He says that he didn’t like the definition on success in the Webster dictionary which is base on material possessions. He coined his own definition in 1934 which is:

“Success is peace of mind which is a direct result of self-satisfaction in knowing you made the effort to become the best of which you are capable.”

Here are a few other quotes from him.

“A good banker isn’t careless with pennies; a good leader isn’t sloppy about details.”

“Effective leaders are, first and foremost, good teachers. We’re in the education business.”

I found his book on Amazon which I will read sometime in the future.

Wooden on Leadership by John Wooden

Wooden also developed the “Pyramid of Success” called “Wooden on Leadership” with 12 lessons on leadership. Click here to get it.

Toronto Marathon

I ran the Toronto Half Marathon with my wife Today (Sunday the 19th). This is my third half marathon this year. It makes for sore joins but well worth the effort.

My goal this year was to run two half marahtons. I did the Mississauga Half marathon in record time which was not bad either.

Next year my goal is to do a record time again.

Toastmasters Speech

I've been slow on posting again....

Just over a week ago I did a speech at Toastmaster on Economics. I had hope to record it and then post it here but didn't. Oh well maybe next time.

Since Economic is a difficult subject to tackle in 7 minutes I spoke on pricing a bit and use Gas prices as an example. I also made the speech fun because economics can be dry. Here is one paragraph on what I said:

"Pricing is what makes up a free market economy. Pricing enables the buyer to signal how much he is willing to pay for a given product and to the seller how much he should produce. It makes up what is called “supply and demand”. If the price of a given product is right for many buyers the demand will increase. On the other hand if the price is too high the demand will decrease where no buyer wants to buy the product for a given price. The seller has two options. One is to lower the price and second is to stop producing the product. "

Soon I will deliver another speech where I will tell my story in narrative format. I’m also working on another speech on customer service.

Toastmasters is great for improving on speaking skills. I have improved in quite few areas already. After every speech I know areas I need to work on. The feedback we get from member and evaluators is great too.

My wife loves to participate too which gives me more motivation to be great. She recently participated in the humorous speech contest and made it to the second level.

Quotes on Friendship

“The person who tries to live alone will not succeed as a human being. His heart withers if it does not answer another heart. His mind shrinks away if he hears only the echos of his own thoughts and finds no other inspiration.”
~Pearl S. Buck

"People's lives change. To keep all your old friends is like keeping all your old clothes—pretty soon your closet is so jammed and everything so crushed you can’t find anything to wear. Help these friends when they need you; bless the years and happy times when you meant a lot to each other, but try not to have the guilts if new people mean more to you now.”
~Helen Gurley Brown

“You can win more friends with your ears than your mouth.”
~Anonymous

Capitalism and Socialism Systems

Almost two months ago, I spent a week in Cuba with my newly wedded wife (our honeymoon). Since I love reading, I brought a few books along to spend some time reading on the beach and by the pool.

One of the books I brought along is, Pricing on Purpose: Creating and Capturing Value by Ron Baker. It never crossed my mind, before leaving for Cuba, that the book is about capitalism and that I was going to a socialist country.

It was an interesting experience to read about capitalism and then to see first hand how a socialist system in Cuba is organized by different principles. One most notable experience is that all the employees at resorts are employed by the government in the name that everybody is on equal terms. It seemed to me that it was rigorously restricting individuals on many levels.

I could literally sense a yearning for freedom in some of the individuals we (my wife and I) came in contact with. Ron Baker says, “Nobody, it seems, dreams about capitalism, until they are faced with life under the misery and poverty of communism or socialism.”

The socialist system stifles the creativity of many where as capitalism is a system of freedom, that encourages creativity yet so few take part in the creativity and in return, creates complacency.

Pope John Paul II addressed the faithful in 1991 in his introduction “Centesimus Annus” which addresses several key areas including:

-Human Dignity
-Human Rights
-Justice
-Development
-Peace
-Economic Systems
-Foreign Debt

He says: “The social order will be all the more stable, the more it takes this fact [Freedom and Sin] into account and does not place in opposition personal interest and the interests of society as a whole, but rather seeks ways to bring them into fruitful harmony.”

Bringing the two in harmony is the tension we must face everyday if we actively participate in any social order. It is not an easy way to live. I have found this practically true in the corporate environment.

Pope John Paul II goes on to say: “In fact, where self-interest is violently suppressed [often the case in a socialist system], it is replaced by a burdensome system of bureaucratic control which dries up the wellsprings of initiative and creativity.”

But this is also true in a capitalist system. Bureaucratic control seems to be just as real in a capitalist system then in a socialist system. The only difference is that the socialist , in power, creates bureaucracy for the interest of a society as a whole, which often is highly selfish and the capitalist, in power, creates bureaucracy for selfish reasons. In both cases, it “dries up the wellsprings of initiative and creativity.”

In summary, my conclusion is that the capitalist system has many benefits over the suppressive socialist system.

Reading and Toastmasters

I'm a vivid reader and usually can be found reading two to three books at the time.

Books that I have recently read include:
Pricing on Purpose: Creating and Capturing Value by Ron Baker
How to Make Collaboration Work by David Straus
Basic Economics by Thomas Sowell

Books that I'm reading right now:
The Closing of the American Mind by Allan Bloom
How to Make Meetings Work by Michael Doyle and David Straus

And books I have lined up that I will read in the near future:
The Strategy & Tactics of Pricing by Thomas Nagle and Reed Holden
The Fifth Discipline: The Art & Practice of the Learning Organization by Peter Senge

And I'm also currently working on a speech for Toastmaster called "Economics 101" which I plan on posting here on my blog.

That is it for now!

Questions Often NOT Asked

I just read an article from Ed Kless who teaches Project Management at Sage Software and other courses. Ed has a good perspective on adding value and delighting customers.

I like to read what Ed writes in articles for the software industry although he tends to be sarcastic at times.

Pricing is a challenge in any industry and it is hardly ever done with the customer in mind.

Ed says, "Pricing with purpose is not gouging; it is not just about trying to maximize fees. It is about customer responsiveness and an assurance of quality of work as defined by the customer. It is about great project management and using predictive indicators rather that retrospective analysis."

To read the whole article Pricing with Purpose click here (scroll half way down).

Eric Fetterolf, a colleague in the software industry, challenges all end users to ask the following questions before engaging a software vendor. He says that these are questions often not asked by the end user:

-What value do you, the software reseller, bring to this engagement beyond the software features and functions?

-What do you, the software reseller, actually sell?

-What support options do you, the software reseller, offer?

-How do you, the software reseller, stand behind your work?

-Should I look for a short-term, transactional relationship or a long term, strategic partnership?

For the answers click here (scroll all the way to the bottom).

Prove People Wrong

I've been slow at posting lately. Perhaps it is because of a lack of inspiration.

For now here are a few quotes:

On Diplomacy, "It takes in reality only one to make a quarrel. It is useless for the cheep to pass resolutions in favour of vegetarianism while the wolf remains of a different opinion" ~Dean Willing R. Inge

On Confidence, "My mother convinced me to learn to enjoy having people tell me I can't do something. Now it's second nature; I love to prove people wrong. ~Andre Ware

That is all for today!

Say More in Less

Jim Estill wrote a blog on wordiness. He talks about how to say more in less words and how it is respectful to the time of people.

Jim says, "Saying more in less words is a sign of high intelligence"

Instead of saying more click here to read Jim's blog. It is short with some good quotes.

Ideas

Jim Estill, my mentor, is found of saying "ideas are a dime a dozen" and says that implementation is what counts. There is truth to it although it is only one side of the truth. As far as ideas go, it is more of a question of weather they are good ideas or poor ideas.

Many businesses start and go bankrupt in very short periods of time. Most of the bankrupcies can be attributed to poor ideas implemented. This is also true when customer service is bad and when a company has a lousy product offering.

Good ideas are absolutely essential in almost anything in life. It is from great ideas that all innovations start. First, for ideas to work, they need to be theoretically sound. Most of all, a good idea will be implemented thoughtfully and with consideration.

What is lacking in much of business literature today is a solid theoretical foundation (this is also true for a lot of other literature). There is a small wave of criticism starting on the quality of business literature. I hope it will start to grow.

And the quote for today:
"There is nothing so practical as a good theory" - Ikujiro Nonala and Hirotoka Takeuchi

From Worst to First

I recently purchased a book called “From Worst to First”. It is a fascinating story about Continental Airlines written by the CEO Gordon Bethune himself . Continental Airlines filed for bankruptcy twice (1980’s and in 1993) and was on the verge of once again to file for bankruptcy in late 1994 when Gordon Bethune took over.

The story is about how Bethune revolutionized the company from being the worse Airline to fly with in the USA and abroad to being one of the first. He talks about how he changed the whole culture at the company when he took over as CEO.

He came up with a plan called “Go Forward Plan”. The plan had four components, “ Fly to Win: The Market Plan, Fund the Future: The Financial Plan, Make Reliability a Reality: The Product Plan and Working Together: The People Plan.”

Here is a quote on what Gordon says about management. “A manager’s job, I think, is simple. A manager wants to hire the best people for the job; make sure they have the proper training, resources, and support; and then get out of the way. When employees have problems, the manager should take the problems of their hands if possible, so the employees can keep doing their jobs well. Basically, managers do their best work by letting employees do theirs.”

For the employees to trust management he as the CEO setup a personal phone line to him so that his employees could call him with problems (They had 40,000 employees in the 1990's). That is a courageous act!

I highly recommend the book!

The Marketing Concept

Peter Drucker has pointed out that "there is only one valid definition of business purpose: to create a customer"

I would also add to "keep a customer".

"There is only one boss: the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his smoney somewhere else. ~Sam Walton, founder of Wal-Mart (1918-1992)

Qoute

Since I will be rather busy these days I will post a few quotes here and there.

"It's axiomatic: You’re as good - or as bad - as the character of your Client List. In a very real sense, you are your Client List!" ~Tom Peters

Billable Hours

In the last year I have become much discomforted about the fact that my professional work is billed by the hour. In my own little way I've started to do my proposals base on fixed pricing. I'm grateful that I have the freedom to do so. But when working for an organization that is driven by timesheets I have no other option right now then still reports my hours. (I'm saying this at the risk that some of my colleagues will read this and may not like me saying this)

About four years ago I started to realize the concept of value pricing but had no theoretical understanding of it; it was just something I did. Ed Kless from Sage Software and a senior fellow at Verasage Institute introduce me to the work of Ron Backer, the founder of Verasage Institute, at a project management course I took earlier this year. Today I understand hourly billing much better and what its fallacies are, especially after getting familiar with the work of Ron.

Billing by the hour is of no value to the customer and no risk is involved on part of the person who sells his time.

Here are some quotes from the work of Ron:

"...professionals are successful because they help people achieve their objectives. Mostly, this is a human endeavour and cannot be measured in a satisfaction survey or on a timesheet."

Ron writes about Intellectual Capital. One of them is Social Capital, "this includes your customers, the main reason a business exists....Of the three types of IC [Intellectual Capital], this is perhaps the most overlooked and least leveraged, and yet it is highly valued by customers."

"In a knowledge environment, the system should serve the worker"

Systematizing businesses trough processes is my passion and that is not for the worker to serve the system but as Ron says, “the system should serve the worker" System should create an environment like Thomas Edison once said; “there ain’t no rules around here! We’re trying to accomplish something!”

I just ordered Ron's book "Pricing on Purpose: Creating and Capturing Value". I will write more summaries base on his work.

Valuing our Time and Slavery

I recently watch the movie Amistand. The movie is about how African slaves freed themselves of their oppressors by taking over the Ship they were being transported in to be sold in to slavery, to then face justice for what they did (kill their oppressors) and ultimately gaining their freedom. Somehow after watching the movie I had the feeling that slavery and selling knowledge by the hour seem to have similarities but still selling knowledge by the hour is not as extreme.

It is really a question about what we value. Selling human knowledge by the hour is done when time is not valued. Selling humans in to slavery is when humans are of no value. I’m grateful that human slavery does not exist as it once did. I'll be grateful when the billable hour will be done away with as it exists today.

And the quote for the day, "There is nothing so practical as a good theory" - Ikujiro Nonala and Hirotoka Takeuchi

Ideas are valuable

The founder of VeraSage Institute and author of Mind Over Matter Ron Baker says "Ideas have always and everywhere been more valuable than the physical act of carrying them out." He goes on to say "Economies that create more ideas and test more ideas and turn those ideas into knowledge create a higher standard of living."

I have just finished reading three of Ron's Booklets called, Burying the Billable Hour, Trashing the Timesheet and You are your Customer List. They are fascinating reads and I highly recommend them to Accountants, Lawyers and people in my industry (Technology Consultants).

I will post some summaries from the reading later on.

NASA

In the last little while I've been going over project management material. I was part of a project management course earlier this year and enjoyed it immensely. Recently I obtained a copy of PM Network from Project Management Institute (PMI). One of the articles in the magazine outlines the benefits of sharing knowledge in organizations.

According to the article NASA publishes a magazine called “Ask” (nice title for a magazine) to improve in project management. “The magazine is devoted to profiling project case studies and lessons learned.” Dr. Hoffman from NASA says, “Every project has a degree of uniqueness, and part of the skill of the project team is to determine what they need and what will work.”

Project management is of interest to me, mainly because it is done so poorly in my industry that I work in (if done at all). I hope in some way to make a contribution in making project management better in my industry.

Success

A friend of a friend posted these 5 values on his blog and called them laws. I took the word law out because I tend not to think in terms of laws.

Value: Your true worth is determined by how much more you give in value than you take in payment
Compensation: Your income is determined by how many people you serve and how well you serve them
Influence: Your influence is determined by how abundantly you place other people's interests first
Authenticity: The most valuable gift you have to offer is yourself
Receptivity: The key to effective giving is to stay open to receiving

Knowledge

Two blog readers reminded me today about my lack of posting in the last few weeks. Thanks James and Jerry!

According to Thomas Sowell in his book Basic Economics, knowledge is the most secrete resource there is. The book is about economics and well written. The gist of the book is about demystifying many of the misunderstandings of economics that abound. The author goes to great length pointing out the fallacies of the media and politicians when it comes to economics.

One particular area of interests to me is efficiency in organizations, not wasting recourses. This can be anything but in particular human talents. Sowell says that is what economics is all about. “Economics is the study of the use of scarce resources which have alternative uses” he says. But just like everything else economics is just one of many perspectives to look at life.

It would indeed help many of the undeveloped countries to raise the living standards of its individuals if the principles of economics where understood by the politicians and individuals in general. Even thought we in the western culture have high living standards it would also help to have a better understanding of economics. Not as much as to raise our living standards but at an intellectual level. A great deal of cynicism is the norm today in our western culture. It goes far and beyond understanding economics. Donald Kanter and Philip Mirvis in their book “The Cynical Americans” point out how different groups of people portray cynicism in different ways. One example of this how blue color workers compare to professionals individuals are cynical in different ways. The Oxford English Dictionary defines cynicism as "a disposition to disbelieve in the sincerity or goodness of human motives and actions" and "to express this by sneers and sarcasms".

It is now a fact that the intellect is not valued in our western culture and it is reflected in many ways. This holds huge implications in the corporate world and in management.

Organizational Hype and Courage

Much time in spent in maintaining cooperate glossy images in organizations today. One of the reasons is that people are not real and authentic. It is a vicious cycle and the rules of rugged individualism contribute mightily to it!

Cooperation’s will not start to report their internal problems without being attacked by the media. In the attempt to present glossy unrealistic expectation of perfection organizations are compel to go round and round and create even more glossier images to feed those expectations. It is a problem that must be solved but how?

To solve the problem of organizational hype is by organizational courage. It is a giant step forward and is taken by individuals who risk speaking with authenticity and vulnerability. It begins with one person and if done persistently soon others will follow. It will generate a culture shift. I must remind myself and others that we have a long way to go and it will not necessarily be an easy journey.

Cost Effectiveness

One reason (perhaps the main) executives will consider bringing community in their organization is cost effectiveness. In general so far executives are not preoccupied with the growth of the individual. Even though executives are often found to think that the people in their organizations work on a consensual decision making level, the truth is that most executives don’t even understand what consensus means.

Japanese businesses work on a much more communal level and it goes to show when looking at the cost effectiveness when comparing the automobile industry bottom line results. Thomas Sowell in his book, “Basic Economics” says while GM made $300 for every vehicle sold and Ford loss $240. Toyota on the other hand made $1800. Forbes magazine reported “It [Toyota] makes a net profit far bigger than the combined total for Detroit’s Big Three.”

Mary Walton in her book “The Deming Management Method” gives a model in “total quality management.” Not an easy model to follow and I’m suggesting that to revitalize leadership in organizations and for it to have a long term effect leaders will need to learn about consensus decision making. The best way to learn about consensus decision making is by learning how to communicate. Learning communication rules is accomplish by experiential learning.

Risk and Honesty

Risk and honesty are not welcomed or encouraged very often and this is practically true in organizations (business included). It takes a great amount of risks to face honesty in the face. Here are a few quotes about honesty.

“We must make the world honest before we can honestly say to our children that honesty is the best policy” George Bernard Shaw

“There is only one way to find out if a man is honest—ask him. If he says ‘yes,’ you know he’s crooked” Groucho Marx

Toastmasters Speech

I've heard it said, "practice makes perfect". Practice paid of for me yesterday as I did my fourth (CC4) toastmasters speech. But instead of saying that practice makes perfect I would rather say "practice make better".

Among three other speeches delivered I won the best speaker award for the evening. I did record the speech with a camcorder so that I can analyze it for improvement or just to see were I did well.

Beside the objectives for the speech, which are given in the Competent Communicator manual from Toastmasters International, I work in the speech tips written by Tim Ferriss here. He says we should be able to answer two questions in a speech, which are:

A. What’s your point?
B. Why does it matter?

It worked well for me and I plan on using this approach again.

In the future I plan on posting my speeches here (via www.youtube.com) but this one I wont, because the topic is not relevant for this blog.

Laziness

“It is the least lazy among us who are most aware of our laziness” ~ Scott Peck

Generally I find that most people don’t like to explorer their laziness much less talk about. It is part of what Carl Jung called “the shadow” the part of us we don’t want to live up to. Laziness is much more then simply physical laziness. Mental and emotional laziness are far more destructive then physical laziness.

In our modern age people rely heavily on science and logic (judgment). This holds equally true for secular and religious people. It is after all the age of reason and over determination. Carl Jung cautioned against it and said we would benefit from integrating spirituality and exploring our unconscious. A good start to this would be to face our laziness. It has been highly beneficial in my life.

I’m currently studying group consciousness and how it affects organizations. It is a true frontier. I have been observing that if the executives in an organization are lazy in their approach the whole organization is lazy in its approach. I defined this type of laziness as mental laziness (thoughtlessness). Organizations have “shadows” and can only be faced if the people on top are willing to go there. The first place to start is by exploring norms, mottoes and myths in an organization. Generally the destructive norms, mottoes and myths in an organization are in the unconsciousness, collectively and for the individual.

Eliminating the Unnecessary - Simplifying

Jim Estill wrote on simplifying communications in his blog a few days ago. As I consultant with businesses (or people I should say) I value simplicity and it helps me to be effective.

I've been reading on the power to simplify recently and came across this quote:

"I don't give a fig for the simplicity this side of complexity, but I would die for the simplicity on the other side of complexity."

The quote may sound theoretical but it is not. It is not speaking of simpleminded answers like we so often want and strive for, rather the clarity that comes when one has eliminated the unnecessary (not just in speaking but in thinking as well) so that the obvious will be expressed simply.

Here is part of Jim's blog post:

"A large part of good communication is simplification. Keeping things short, clear and to the point makes communication work well. People understand it better and remember it better."

"Part of the goal then is to learn how to simplify. Making things easier and simpler is smarter. This is a true art that we all should work towards."

I like how Jim ends it....simplifying is an art indeed!

Be Optimistic

I recently came across a few quotes on optimism:

"An optimist may see a light where there is none, but why must the pessimist always run to blow it out?" ~Michael de Saint-Pierre

"for myself I am an optimist—it does not seem to be much use being anything else." ~Winston Churchill

"When pessimists think they're taking a chance, optimists feel they're grasping a great opportunity." ~Anonymous

New Community in Business

Beth Jarman and George Land write the following about community in business in an essay titled Beyond Breakpoint: Possibilities for New Community

We are sure that within the hearts of vast number of people rests a deep yearning for communities that celebrate the magnificence of our diversity. The natural pull we are experiencing is to evolve past where we presently are. It requires courage, boldness, and deep commitment. Guillaume Apollinaire put into words what we think could happen if we dared build new communities:

Come to the edge, he said.

They said: We are afraid.

Come to the edge, he said,

They came. He pushed them

and they flew.

Experiential Learning

Learning can be experiential or passive. Experiential is far more effective but also more demanding. For example, communications (discussion, listening) can for the most part only be learned experientially. I've been part of lectures and motivational talks where much was said about listening and so far I have yet to see someone walk away saying, "wow from now on I will be a much better listener." Community is experiential learning. I have see people in community become better listener and thinkers (that is if it is a safe place were people are real with each other). It is the experience which will lead to a transformed person. For more on community click here

On the other hand I've been part of training where a company spent thousands of dollars to learn project management for the staff. For the most part every one seemed to be enthusiastic about learning and participating in the discussion. But after the training, it was a different story. No one ever mentioned the training and neither did the training become a reality for the company. It was a passive learning experience. Of course there were more reasons involved why the training did not become a reality.

In the Encarta® World English Dictionary experience is defined as: "Involvement in something over time: active involvement in an activity or exposure to events or people over a period of time that leads to an increase in knowledge or skill."

Quote of the day

"Sooner or later we all discover that the important moments in life are not the advertised ones, not the birthdays, the graduations, the weddings, not the great goals achieved. The milestones are less prepossessing. They come to the door of memory unannounced, stray dogs that amble in, sniff around a bit, and simply never leave. Our lives are measured by these."

~Susan B. Anthony

If the world had only a 100 people

Jim Estill has been my mentor for almost 4 years now. He is the CEO of Synnex Canada. I meet with him about 4 times a year and we also exchange emails, particularly when I have questions regarding expirences I want to learn more about. I also read his blog on regular basis

He has a lot of wisdom to offer!

Jim has an interesting post today. I will quote part of it here....

The World As 100 People...

"If we could shrink the earth’s population to a village of 100 people, with all the existing human ratios remaining the same, it would like this…

60 Asians, 14 Africans, 12 Europeans, 7 Latin Americans, 5 from USA & Canada and 1 from South Pacific
49 would be female and 51 would be male
82 would be non-white, 18 white
67 would be non-Christian, 33 would be Christian
32% of the world’s wealth would be in the hands of only 5 people and all 5 would be US citizens
80 would live in substandard housing, 24 would not have electricity, 33 would not have access to safe water
67 would be unable to read, 50 would suffer from malnutrition
One would be near death, 2 would be near birth
Only one would have a college education but 7 would have internet access

When you consider our world from such a perspective, the need for both acceptance and understanding becomes glaringly apparent."

Community in Business

I’ve reflecting on what it is that I’m trying to accomplish by blogging. One of the things I told myself when I started this blog, is to have an ability to organize my thoughts. I find it to be working well.

Some of what I have written may have been idealistic. There is nothing wrong with idealism but ultimately ideas and thoughts need to be practical. A solution to problems and taking action is what will spin the wheels. I’m still learning how to make the wheels spin. I’m a visionary and need to surround myself with people who can keep me in the present.

Lately I’ve been thinking about what it would look if a community mind set would be embraced in the business world (there are positive signs already that the business world is beginning to adopt community). I believe that if community were adopted by businesses it would at least solve some of the ills (serious ills that is) in today’s corporate world. When I talk about community in groups or with friends I see puzzled faces and frowns. It does not surprise me considering that the majority of people today are embedded in rugged individualism. This is reflected in the corporate world on more then one level.

The following are community attributes according to Scott Peck who wrote extensively about community and also did Community Building Workshops (CBW) for businesses and individuals before he past away. They are realistic and obtainable.

Inclusivity, commitment and consensus
Learn to communicate
Realism
Contemplation
A safe place
A laboratory for personal disarmament
A group that can fight gracefully
A group of all leaders
A spirit

On the fifth point Peck says: “An experiment is designed to give us new experience from which we can extract new wisdom. So it is that in experimenting with personally disarming themselves, the members of a true community experientially discover the rules of peacemaking and its virtues.”

Based on his experience with community building workshops, Peck says that community building typically goes through four stages (stage four is a true community)

Pseudo community
Chaos
Emptiness
True community

For a description of the four stages click here. Similar stages are also described in what is called organization theory. See the above link.

The personal experience I’ve had in community for two years now, the above stages work like clock work. Sadly many groups (including in businesses) are either stuck in pseudo community or chaos and when out of chaos (a group that does not know how to work through emptiness) will go back in to pseudo community.

For more information on community building these two books have a wealth of information. A World Waiting to be Born and the Different Drum both by Scott Peck

Failed Toastmasters Speech

I failed at my toastmaster’s speech on Tuesday. Somehow I had an inclination that I was not prepared to speak on the subject I choose. Although I spent 7 hours to prepare most of the time was spent on the content and very little on presentation.

First what I did is write out the whole speech and then took the highlights and printed them on 4X6 cards. After going over the speech about 10 times I had become highly dependent on the notes (which I only realized after the speech). Writing about a subject is different then speaking about it.

I will try sometime new. I'm thinking about writing down questions that I want to address in a speech and then speak out the answers without notes. This will give a greater opportunity to focus on presentation then on preparation for a speech. After I have my speech right then it would be appropriate to do research and backup what I'm saying.

I realize that I'm on a new frontier and it will be a learning curve for me to master a subject and also be good at presenting it. As I travel and take part in training and hear speakers one of the common observations is that they have good presentation skills but lack in subject skills. I realize now that it is a challenge to be good at both.

Although this is an over quoted quote form Henry Ford I will use it here and take it to heart.

"Failure is the opportunity to begin again, more intelligently" Henry Ford

Technology Sophistication

When I first began consulting with businesses (early 2000) I had no knowledge of running a business. If someone had asked me back then what strategic planning was, I would probably have given them a frown and said it is something people do at NASA. Nevertheless I thought wonders of my innovative ideas of technology and was eager to have businesses implement them. Slowly it got to me that business people were not that interested in my ideas, especially when they could not see how it would work for them. They had reasons not to be interested!

Trudy and Peter Johnson-Lenz state, "Just as word processing does not make good writing, even with spelling and grammar-checkers, groupware, [technology] no matter how sophisticated, will not create collaboration by itself. Groupware [technology] introductions fail or backfire when they are not supported by participatory planning, pilot projects, team-oriented culture, and plenty of training." (Source: Community Building...in Business)

I have seen this many times. Sadly many technology companies don't know how to use technology as an advantage (as was my case when I began my business) and go around mindlessly selling and implementing technology that will be of little or no use.

Human Fundamentals

Here is a quote that speaks to human fundamentals:

"In giving birth to a sustainable species-civilization, humanity will probably move back and forth through cycles of contraction and relaxation until we utterly exhaust ourselves and burn trough the barriers that separate us from our wholeness as a human family....Numerous times we may go to the very edge of ruin as a species, hopefully to pull back in time with new levels of maturity and insight." Duane Elgin, Awakening Earth

Leadership Defined

The following is a definition of leadership. I took this part from the scrip I will be using at a Toastmasters speech this coming Tuesday. For those close by drop in to hear me speak. For directions click here. I also plan on recording my speech for review and post it here through www.youtube.com

Leadership Defined
Contrary to popular belief and self-help books it is often stated that leaders and managers fulfill different roles in organizations. They are wrong! We are all leaders. It is more of a question whether we are exercising our leadership abilities. Management is a profession. The exercise of leading and appropriate use of power is crucial in management roles. Sadly many self made managers through mindless promotions abuse power and don’t know what it means to lead. “The one mask, above all else of the true servant leader is that she empowers others” says Scott Peck in his book “A World Waiting to be Born”. A leader then will use power for the opportunity to be of service to others. This can be the CEO, President or General Manager or any other role that involves managing people in a company.

Who is reflected in Your Business?

Businesses and organizations are systems by definition whether functional or dysfunctional. The same can be said about marriages, they are system between two individuals and whole families. For families the system is different than a business but it is a system without a doubt.

Because businesses and organizations are systems the whole organization will be reflected in how the executives perform for the most part. There are exceptions of course but usually is goes like this. If the boss says “our client is stupid” all individuals in the organization will think or say “our client is stupid”. If customers are a pain to serve for the boss it will be a pain for the employee as well. If the owner is frantically running around all day doing mundane tasks and never stop to think where he wants his business to be in 5, 10…years that is exactly what the employees will be doing.

On the other hand, if the CEO of a company plans strategically and teaches his employees how to use the system he develops they will follow it (not to say that it will always be easy for the CEO or employees). Of course it is also important for the CEO to follow what he teaches. If employee retention is important to a President of a company he will provide adequate ongoing training and support for his employees so that will be more fulfill at work.

The challenge from being one to becoming the other (dysfunctional to functional) is and quest to learn and grow.

I’m currently exploring community in business. Having experience community on a personal level for two years now it can have a profound impact on people as it has for me. Recently I bought a book called, “Community Building: Renewing Spirit & Learning in Business” featuring 34 Essays by authors currently involved in community building in businesses. No essay suggests that building community in business is easy but all say that is it a rewarding experience.

An essay written by Beth Jarman and George Land and then say, “One of the assumptions that must be made in building new communities is that everyone is creative and that each person has a unique contribution to make to the whole. The rigid structure….assumes that people must be controlled and managed.” I have also seen where the last thing a manager wants to do is take responsibly for managing people. That is perhaps even worse then controlling and managing people.

I will continue writing what I’m learning about community in business and I’m also doing research right now in how I could bring community to businesses.

Old Chinese Proverb

I came across this Chinese proverb. It speaks of what servant leadership is.

Go in search of your people,
Love Them; Learn from Them;
Plan with Them; Serve Them.
Begin with what they have;
Build on what They know.
But of the best leaders,
when their task is accomplished,
and their work is done,
The people all remark:
"We have done it ourselves."

Author unknown

Glossy Business

High expectations are abound in today’s business world. That is one of the reason many companies adapt to the flashiness and make them self appear to be much more than they are. It is what I call “Business Pretense”

One of the ways I most often find this evident is in company’s websites. When looking for products or services smiley fake faces and promising slogans abound. But when it comes to delivery smiley faces and promising slogans don’t deliver. People do!

This website click here is dedicated to selling high resolution pictures to incorporate in to websites or print for product labels and packages. Over 60,000 of the pictures are of people with “smiles”. The subscription cost to obtain pictures is $99.95 per month or $449.95 per year.

Just about everybody can come up with fancy slogans. Sometimes when I drive along the highway I read slogans on commercial vehicles and can’t help but smile. Here are few slogans:

Let Us Take The Load Off Your Mind"
You can do it! We can help
We're number two. We try harder
Finger-lickin' good
You deserve a break today

And a few famous slogans: "Best customer service you will find" and "We put our customers first".

One of my criteria for product and service purchases is personal service and attention to detail. It is rare in today’s business world. Here are a few companies I’ve had personal involvement with and stand out.

Westjet Airlines is great! First and foremost for the excellent personal service they provide. It is evident on their website; they have pictures of actual people working for the company. When flying with them the staff is courteous, friendly and most of all they are humorist. Westjet is currently running a promotion with a great marketing touch! Check it out!

About 2 years ago I sign up for a company tour at http://www.1800gotjunk.com/ headquartered in Vancouver BC Canada. Brian Scudamore the founder and CEO was personally available for questions. The atmosphere was great and personable. Training and team collaboration is evident at its headquarters. Pictures of real people and biographies of the executive team on their website. Great company!

Recently I was browsing http://www.dell.ca/. Dell has a good reputation. I notice pictures and biographies of the executive team on the website. It is rare to find biographies on website, especially from the executives. It is personable to do business with Dell!

There are prevailing fears in people to be personable! I will write more about fears in people and how they are manifested in businesses in an upcoming blog post.

Here is a marketing pitch. The first person to post a comment on my blog with the company name corresponding to the first five slogans above I will give a $10.00 Tim Horton’s gift certificate. This is to see how well slogans work.

Value Selling

One of the challenges in businesses is value selling. At its best most businesses know how to sell and market products and services around price (if any marketing is done at all). Most consumers and end-users have a buying criteria base on price. It is a two fold scenario. If businesses promote themselves as price selling that is what they will be known for.

It is a challenge to market products and services base on value. It is multifaceted scenario (more on this on a upcoming blog)

“Ours is a society where people know the price of everything, but the value of nothing – where people have a great deal to live on, but very little to live for” Randy Alcorn

Toastmasters

I joined Toastmasters almost 5 months ago. I had often read about Toastmasters International. Last year in October I read “Dig Your Well before You're Thirsty” by Harvey Mackay. He did mention Toastmasters and within two week my Fiancée out of the blue said I should join Toastmasters and the third source (also during the same time) was a posting on my mentor’s blog (CEO Blog – Time Leadership by Jim Estill) also mentioned Toastmasters. Perhaps it was a sign for me to take action and join.

It’s been a great experience and highly recommended to anyone interested on improving their communication skills and leadership abilities. It’s also been a great opportunity for networking and supporting others to become competent communicators and leaders.

Here are a few of the Toastmasters promises you will be asked to adhere to if you join.

To attend club meeting regularly
To prepare all of my speeches and leadership assignments to the best of my ability, basing them on projects in the Competent Communication manual, the Advanced Communication manuals or the Competent Leadership manuals
To prepare for and fulfill meeting assignments
To provide fellow members with helpful, constructive evaluations
To help the club maintain the positive, friendly environment necessary for all members to learn and grow

And if you want to know the rest you will need to join!

The membership fee is very reasonable! You will pay a onetime fee for joining of $60.00 and $72.00 per year.

I’ve set a goal to obtain my DTM in four years. Again if you want to know what a DTM is do yourself a favor and join!

Helping Clients Succeed

Mahan Khalsa in his book Let’s Get Real or Let’s Not Play helps readers see what helping clients should look like. His advice is practical but not easy to practice.

I remember when I first started selling to businesses. All I could think of how great my products were. It didn’t work well convincing people to buy and I wasted much effort.

The software industry (my background) does not have a reputable selling model as do many other industries. We love our solutions and think wonders of how it will solve problems for our prospects. We are so interested in selling our solutions that we forget to find out what the problems our clients are having to begin with. Sales and selling carries a lot of negative baggage in our industry.

Second, a great selling model requires work and effort. There is no such thing as ‘come up with a great selling model’ and on we go. It is hard work but at the same time very rewarding!

I will quote from Mahan’s book here....I can’t say it any better:

“Helping clients succeed is not a euphemism for sales or selling. It is a paradigm, a mental model, a frame of reference, a methodology for two or more companies to work together for mutual success and satisfaction”

"Individuals and organizations changing their paradigm from selling to succeeding—from dysfunctional practices to mutual success and satisfaction—bring new skill sets to the business development dialogue. Those with a high emotional quotient will be rewarded with superior information about true needs, resources, and decision criteria. With an applied intelligence quotient, they will build better business cases for proposed interventions, make astute systemic connections, and push innovation and creative thinking to new levels. Conversely those wed to twentieth-century selling models will be penalized with inferior communication, wasted efforts, and less probability of finding meaningful, relevant solutions." Mahan Khalsa

“Business development dialogue” is practical. A good way to start!

I highly recommend the book but he is not presenting an easy "quick fix" solution to selling. If that is what you are looking for don't read it.

Collaboration is Innovation

Team collaborating is innovation! We are all creative and diverse beings. Innovative ideas come out of creativity and one of the challenges is that it can bring disruption and division. Often teams don’t stay together long enough to learn to disagree.

At this point everybody parts ways, not necessarily physically but mentally. Usually this is done in the form of politeness. Everybody pretends to get along well but differences exist.

Leaders know that disagreeing is good, as a matter fact it is healthy but most people do it poorly and perhaps it is because often the outcome is uncertain. It feels too risky.

“A true measure of a team's capacity to innovate is the number of failures it is willing to accept to birth the true innovation” Susan DeGenring

Goals for my blog

As I started to prepare for this blog I decided to do it all the way. "Whole hog plus the posted" as Michael Gerber would say it (one of my favorite authors).

So I set out to write down some goals, which are:
1- Post once a week or more often
2- Use quotes in blog postings
3- Write from my own experiences
4- Interact with other blogs
5- Interact with books I read
6- Write on leadership and management

My first goal is the most important and the rest will happen as I go along! Too often I see abandon websites and blogs. Perhaps it is because of the work involved and dedication required.

Leadership

The art of leadership is of great importance to me. I make it and ongoing study and most of all I learn about leadership experientially

There is no one best style of leadership. Every system or organization is inherently different even though on the outset it may look the same. The best an effective leader can do is influence the thinking of his/her colleagues/followers so that in turn they can become leaders.

Paradoxically it can be said that leaders are both born and made. It seems that certain leaders are born with extraordinary leadership ability and at other times clear indications exists that an individuals ability to lead was mostly accomplished by training and experiences.

Ultimately good leadership is becoming more conscious the way we think about our circumstances and the world. Being a truly effective leader is not easy.

In this work (blog) I will delve in to leadership issues, styles and potential on ongoing basis