Developing the CEO Within You

Capitalism vs Wall Street : Outsourcing

A debate is raging at Harvard. If the trend toward outsourcing of critical technologies was a response to quarterly earnings pressure from Wall Street, it would stand to reason that U.S. technology companies’ R&D budgets should fall with rising dependence on outsourced components and processes.

But the opposite is true, which demonstrates that outsourcing is being employed not simply to cut costs, but as a means to direct capital to its most productive long-term uses — the very essence of free-market capitalism. So if all we care about is innovation — as opposed to the direct creation of manufacturing jobs in the U.S. — the market is working fine.

Andy Rappaport at August Capital argues if we are intent on feeding, not killing, the U.S. innovation machine, we need to be very careful about what other incentives we create.

The CEOs Response to Failure

David Silverman posted on the Harvard Business Review on the topic of failure. That thing we all know is in the room from time to time but choose to ignore. In his article he quotes what Tom Watson, the founder of IBM once said in regard to failure:

Would you like me to give you a formula for success? It’s quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn’t at all. You can be discouraged by failure — or you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember that’s where you will find success.

Leadership Presence

John Baldoni of the Harvard Business Review posted last week on developing the leadership presence by asking: What about when you are pushed in front of the microphone or given very little prep time for something like an introduction of a guest speaker?

At the microphone, remain calm. Why? Because you are in control! Your stomach may be churning and your palms may be sweaty, but you must realize the microphone is in your hands. This is a little secret that I share with people I coach: people have to listen to you. Whether you croon or wax eloquent, the audience is at your mercy. You are the master of your destiny, or at least the next five minutes. When you keep that thought in mind, you will realize that yes, you can do this. You can speak in front of an audience and you will be okay.

Some people confuse presence with charisma, but the two are not the same. The former is developed over time; the latter is what you are born with and is a matter of looks, charm, personality, and appeal. Charisma adds to presence, but you do not need to have movie-star looks to be a person of presence. An example of this was Mother Theresa.

Preparing for a Recession Recovery

Profit & Principles, Social Responsibility and Profit

The CEO of Levi Strauss has turned the corner on social responsibility, namely that it pays. A recent INSEAD post by Kevin Tan in Singapore looks at an interview with the CEO, John Anderson, and sums up quickly why and how corporate responsibility will work. The company particpates in their corporate responsibility program because ‘it’s the right thing to do, but it’s also got to make business sense.’

“So we built the brand by aligning with an issue the government struggled to confront. And that’s a commitment we still have today.”

Anderson added that Levi has been working for the past two years with other apparel brands, as well as non-governmental organisations, to stop the practice of using child labour in harvesting cotton in Uzbekistan. To that end, they have asked suppliers not to use cotton from that country until the government shows progress in ending the practice.

Turning to the environment, Anderson says Levi is aware that cotton farming requires significant amounts of water and pesticide. That has led Levi to produce apparel made from recycled soda pop and blended organic cotton. Notably, Levi’s recent marketing campaign asked consumers to trade in their old jeans, which could then be recycled by Levi for its own commercial use.

“Our vision is this: we will build environmental sustainability into everything we do so that our profitable growth helps restore our environment. So we wanted to link the environment through our guided market process and we also want to tie it to profitable growth,” says Anderson.
“And I think both can fit very closely together. If you do that, people can really align behind what you want to do. But you have to be pragmatic, you’ve got to demand profitable growth but you can’t tie it to environmental and social issues.”

Upcoming Conference on Recession Marketing Strategy at Yale

On November 6 at the Yale School of Management, a conference is being held on “Finding the Upside in the Downturn: The Changing Role of Marketing”.

The conference will feature keynote speeches from Michael Polk, President, Unilever Americas; John Hayes, Chief Marketing Officer, American Express Company; Rishad Tobaccowala, CEO, Denuo, Publicis Groupe; Steven Sturm, Group Vice President, Toyota Motor North America, Inc. The topics they will explore include how their companies are rethinking their marketing, innovation, pricing, product, and communications strategies; their use of new media and new technologies; changes in media consumption and brand building tools; and consumer behavior challenges and opportunities in both developed and developing countries.

Watch this space for an update after the conference.

Sales Performance Management

Accenture has put out a paper on enterprise sales incentive management. Improving the incentive management process is critical to a company’s ability to meet target sales objectives—whether those objectives are growth, improved profitability, customer retention or some combination thereof. There are two distinct approaches to improvement, each with its attendant benefits.

In addition to encouraging sales behavior that is better aligned with a company’s corporate and sales strategies, an optimized incentive management capability delivers several other important benefits:

1. Improved incentive plan design and implementation. The incentive compensation plan is owned by sales. However, several other company stakeholders play significant roles in its development and use, including marketing, human resources and finance. An optimized incentive management capability delivers agility to the enterprise and positions it for growth and increased market share.

2. Automation of key activities. A well-designed software solution automates previously manual activities—including compensation reconciliation, adjustment processing and incentive credit assignment. Streamlined processes and improved integration allowed one Accenture client in the telecommunications industry to reduce the lag time between the recording of a sale and issuance of commission to the appropriate sales participant from 60 days to one.

3. Better business intelligence for the company. Because the software solution automates administrative activities, compensation administrators have more time to focus on value-adding activities such as analysis and forecasting. Such activities, as well as software-supported analytics and dashboard reporting for senior executives and key functions (such as sales, sales operations, finance and human resources), increase management confidence in incentive compensation results.

4. Improved accuracy in plan operations. With the new software replacing manual or patchwork systems, a company can experience dramatic improvements in the accuracy of compensation calculation and a reduction in the incidents of incentive overpayment.

5. Improved compliance with Sarbanes-Oxley. The tools and process associated with optimized incentive management create and maintain easily accessible audit trails for payments and adjustments. Compensation adjustments are more directly attributable to source data changes and recalculated with full traceability, as opposed to offline calculations and cash-based debits and credits.

6. Standardized compensation plans across sales forces. Implementing a new incentive compensation system allows an organization to standardize these disparate compensation processes, plans and systems to better realize the anticipated benefits of the initial business combination while improving flexibility to act in accordance with differentiated market and geographic needs.

By creating an optimized incentive management capability—one that clearly illustrates the link between strategy, performance and paychecks—companies can more effectively align sales force behavior with the company’s goals. And in doing so, companies take an important step toward boosting the sales function’s ability to advance the growth agenda, as well as enable the sales force to make a significant contribution to the pursuit of high performance.

Green Recovery: Emerge from the Downturn on Top

When Burned Out, Take a Sabbatical

Gina Trapani, founder of Lifehacker.com, recently posted about how some leaders are taking a year from their retirement and putting it into their career. This is a fantastic thought. She gives an example:

Designer Stefan Sagmeister takes these findings seriously. He works time off into his schedule in a way that will make you green with envy. Every seven years, Sagmeister closes his New York City–based design studio for an entire year of creative rejuvenation. During his sabbatical, Sagmeister “works,” but not for clients. (He’s serious about that, too. Last year, he turned down an opportunity to design a poster for the Obama campaign while he was on sabbatical.)

Idleness is not just a psychological necessity, req­uisite to the construction of a complete human being; it constitutes as well a kind of political space, a space as necessary to the workings of an actual democracy as, say, a free press. How does it do this? By allowing us time to figure out who we are, and what we believe; by allowing us time to consider what is unjust, and what we might do about it. By giving the inner life (in whose precincts we are most ourselves) its due. Which is precisely what makes idle­ness dangerous. All manner of things can grow out of that fallow soil. Not for nothing did our mothers grow suspicious when we had “too much time on our hands.” They knew we might be up to something. And not for nothing did we whisper to each other, when we were up to something, “Quick, look busy.”