Good morning all from London.

Well we have good news from all around. The Chinese are showing very strong growth, Goldman Sachs posts record profits and the FTSE 100 has been climbing steadily with the banking sector leading the way. So we must be on the road to recovery? NOT!

Putting aside the so called recovery which in my view is a distant blip on the horizon, I want to talk about Empires Strike Back. No not Darth Vader in his raspy voice and his long lost son, young Luke.

In almost all the companies that I have implemented a change or performance improvement program over the last decade, I have seen a disturbing feature that is hugely detrimental to any business.

Empires!

Empires built by management at all levels within a business, but more prevalent within middle management. Empires that serve no purpose in running a business successfully. Empires that inhibit change, create a static environment and destroy value for all stakeholders.

My definition of an empire is as follows:

"A mini organization within a company that runs semi-autonomously with very little transparency and accountability"

These empires may be a small team or a whole department or even an entire account run by an individual and his 'minions'. These empires are very hard to identify until you come to review what is being done and who is doing what. They are also very hard to penetrate as the top two or three individuals running the outfit are very defensive and protective.

Such empires are run like fiefdoms and performance, efficiency, accountability and other key deliverables are 'managed' by those at the helm.

In my view the main reasons for the existence of these empires are:

1. To hide the weakness and inadequacies of the manager in charge
2. Reduce workload within the department or team, to create a 'cushy' work environment, i.e. lots of tea breaks and web browsing
3. Hide inefficiencies within the division
4. Develop a managers need to feel important and needed, massaging their ego
5. Job protection

I have come across one such incident recently where an account manager had a site manager running the day-to-day activities of the account, who in turn had a team leader running the teams workload, who in turn had a work allocator and also another person writing management reports. This was before we arrived at the people delivering the service.

It was such that the three individuals 'looked out' for each other to massage reports and numbers. When the performance improvement program was implemented, within 8 weeks the account manager moved out taking a sideways job change, the site manager resigned and the team leader was eventually replaced.

What strikes me is that when called upon for greater transparency and a clear measurement of performance these empires fall apart like a house of cards. These empire builders can never rise to the challenge of delivering when asked to, they usually become very defensive or walk away of their own volition.

It also seems that the larger the company the greater the number of empires it will have residing within. Don't get me wrong when a CEO or a senior manager is replaced he/she will bring in their team to make the changes they see fit to improve a companies fortune, but this should not be just so that another empire replaces the incumbent.

I think it is important that teams, departments and the whole organizational structure is reviewed by senior management on a regular basis to identify any unnecessary building of empires. These should be backed up with clear performance indicators that all managers should be held accountable to.

However, I do not believe this phenomenon will go away overnight or ever, it is human nature to create such empires and often these will happen organically and before you know it a behemoth is straddling a section within a business.

Till the next time

Shah Alam

Hello everybody from a sweltering day here in London. It feels good to have 30 degree Celsius in the capital for a few days straight.

Good Morning from London,

I trust everyone out there is enjoying 2009 which is a year of elections around the world and some surprising results are manifesting here and there that will hopefully move the world towards peace and understanding amongst the human race.

I was recently watching a programme on the BBC about the evolution of the human race, the anthropologist who presented the programme concluded that we the human race have a gene that indicates our emergence from a small handful of tribes that left East Africa approximately 70,000 years or so ago. They left via the Arabian peninsula through what is now Yemen and then beyond to populate the whole plant. So if we are all related to one another why do we have so much war, strife, hatred and violence towards our fellow man?

In the 21st century this has gone beyond the battlefields of Iraq, the diamond fields of Sierra Leone and the Korean peninsula.

It drives us crazy when we dial a number to pay our bills and we hear in a heavy accent someone saying "Hello my name is Fred, how may I help you?" When we clearly know this persons name isn't Fred and they are in an office thousands of miles away.

Call centres! They are the bane of modern life for many of us and I'm sure we've all seen red sometime or another when the person at the other end of the line cannot or does not seem to understand our needs. They speak like an automaton from a fixed script without any consideration for what our dilemma is.

When I first started consulting back in 1999, the client was a call centre operator with five locations in the UK's southeast. All the operators were young students or just out of university and had the ability to communicate clearly concisely and effectively. These operators handled calls for utility companies, banks and other companies selling services to the public. One of the noticeable beneficial aspects of using operators who are native to a country is that there is less of a misunderstanding in communication and the operator is more able to empathise with the customers needs.

However, as we all know most call centres were moved overseas and my first client also closed down all five locations in the UK for sunnier climes. A bulk of these call centres whether in Europe or USA were moved to India which has the advantage of English as its language of business. Couple this with low labour costs and you get a situation where any business would relocate to achieve costs savings.

Now, don't get me wrong I am just as much a capitalist as the next CEO, but some aspects of achieving costs savings that affect quality and the level of service should not be compromised.

So what happened in the early years of the new millennia? Well, in the UK for one, many companies brought their call centres back home and even went so far as to advertise the fact that "Our call centres are now based in the UK".

There definitely is a solid business case for locating call centres in a places where the labour is cheaper, for example I recently completed an assignment with an ICT services firm that have their first line based in Romania. The same client was also looking at options to base some call centres in Malaysia.

The key issue here is for companies to get a balance between what can be sent overseas without a drop in quality and quantity of service and what aspect of the operations must be kept in the home country?

Take a bank for example that offers a two tier personal cheque account. One is the basic account and the other is a premium service whereby the customer is paying a monthly fee to have the premium service. Now, you would expect the premium customer to be offered a service that ensures a qualitative handling of their needs. This does not mean that two call centres are operated, one in the home country and one overseas.

It is about implementing controls, metrics and reviews that measure and allow the continuous monitoring of customer satisfaction at all levels. Whether a company decides to send all its call centres abroad or keep some at home there needs to be a clear strategy on how to ensure customer service and satisfaction does not get compromised.

At Storm we have several articles on Call Centre Management and some tips on 'How To'. Click the link below to take you directly there.

http://www.storm-international.us/resources/KnowledgeBase.aspx

Till the next time have a great weekend

Shah Alam

In the past years I have been looking for an answer to the following question. Why do clients tell us that they agree with our findings during the analysis, but still feel that they do not need us?

Good morning from the battered shores of the British Isles.

The country is countinuing to take a hammering from the financial crisis and we have yet the April showers to arrive as the clocks go forward tonight to GMT (UTC).

With all that has been going on in the world of commerce and the corrective action that the British government has been trying to implement through Quantitative Easing (QE) or printing money, the general outlook is not very rosy. We in London are also looking at the possibility of 100,000 good for nothings descending on our streets to bemoan about capitalism and bankers as the G20 summit kicks off this week.

Funny how when things go bad it is the fault of businessmen and entrepreneurs who had the gumption to get up and create wealth and value for a nation or these days for the world. As in the past and as has been the case for millenia it is the creativity and ingenuity of entrepreneurs that has made the world a better place for all of us.

Swan Edison gave us the light bulb, Ford made the car available to the masses and today we have the likes of Apple tantalizing our senses with superb media technology.

And it is this creative ability of brave individuals that will get the world out of this mess. The world is in desperate need of people who can come up with solutions to the problems we are facing in light of the recent financial and economic meltdown. With everything that has happened people need to eat, they need a place to live, they need clothing on their back and some luxury and leisure to enjoy in their spare time. OK I concede that people may not spend as much as they did pre 2007, but they will spend albeit on a smaller scale.

I was reading an article in the Moneyweek publication and a journalist had been to Thailand recently, he asked a taxi driver what people would do if there was mass unemployment. The taxi driver replied "Well people would just go back to their family farms and grow crops". So you see this crisis is not the end of the world and we in the West are too hung up trying to over analyze what happened and then doom-mongering about the future.

What happened has happened, it's water under the bridge and we must move on. Yes there were lessons to be learned, the FSA, SEC, the central banks and the Chancellors all failed in their job as regulators of the financial system and measures should be put in place to avoid such a catastrophe in the future. But instead of trying to divert the media and public attention away from their failures what they should be doing is providing support to small and medium sized businesses as well as start-ups to kick the economy both nationally and gobally into motion. By helping these enterprises governments would be preparing the ground for them to grow exponentially when the recovery starts in earnest in 6 to 12 months time.

The UK government is pumping money left, right and centre into idiotic public schemes to have people occupied, trained, destressed etc during this downturn. We see public sector pay in the UK rise year on year while the private sector rises only marginally. We also see that the government is hiring an ever increasing number of individuals into local and central government to fill 'non-jobs' yet in the private sector jobs are contracting at a rapid rate.

What we do not hear or see is any talk up businesses or entrepreneurs being helped or aided with any free training, support, finance. The only hope young business people have is The Apprentice show with Alan Sugar which kicked off this week or Dragon's Den, a show where entrepreneurs pitch to get financing for their ideas.

Alas, most people have been hoodwinked by the media and their governments into a mob frenzy hence we have thousands descending onto London to demonstrate against capitalsimg which is exactly what those in power want. Keep the masses occupied whilst we fiddle with the books of the country.

The best thing these demonstrators could do is avoid going to the demonstration and sit down and think of a new product or service to develop or improve upon an existing idea, to increase the wealth and welfare of the people of this world.

Shah Alam

In today's business world, change is the only constant. Change in the Arab world is something which is hard to handle, even though everything around us is changing constantly. Especially when it comes to business, being open for change and embracing change is a vital ingredient for success.

Well good morning all and here is todays food for thought from London.

What do I mean by that question?

Commercial awareness is an element that should be at the heart of every individuals thinking within their business. Whether someone is a mom and pop store, a self-employed professional or the CEO of a multinational.

I have come across many managers, employees and businessmen who are running around trying to keep all and sundry happy, by ensuring the spinning plates are spinning without crashing to the ground. Yet, the cost associated with trying to cater to every whim of customers, suppliers and internal departments means costs spiral out of control and the bottom-line is shot to pieces.

The newcomer or the new financial year starts off meaning well with stretching goals for profit and costs, yet as time goes by 'getting the job done' gets in the way. Focus becomes hazy and the dreaded dragon of cost raises its ugly head. Activities that add no value creep in, and extra service is provided without taking into account the cost implications.

Yesterday I accompanied a colleague to a mom and pop store, the owner of which was a friend of my colleague. After a brief chat we left the store and the owner walked out with us as he was going home, leaving an employee in charge. As the owner walked out of the door he grabbed a two litre milk carton for personal use. Now, this may seem harmless but such non-accountability can lead to huge costs and a gaping black hole in a businesses profits.

How often within a corporate environment do people think about how their actions can affect the bottom-line?

Some key elements that seem to be missing from the vocabulary and thinking of management and workers alike are:

1. Production / service provision cost per hour
2. Hours required per standard product / service provided
3. Availability in terms of service provision or production capacity
4. Lost / down time reasons and the cost in hours
5. Cost of non-value add but essential to production / service activities

These are only some factors that need to be borne in mind by individuals in their business life. In my opinion the key element is the education of all staff within a commercial enterprise. Education being of the cost of doing business.

What does it cost an enterprise to produce a product or provide a service. That education does not mean that all employees must become aware of accounting principles or be able to perform analysis of financial statements. It simply means making them aware of the cost of their departments and in most cases their actions.

Shah Alam

Hello All,

Yesterday I had a request from a colleague and friend who works for Beximco, a Bangladeshi pharmaceuticals company. He was asking me about how to write a business plan for a case he was working on and also he wanted to know about productivity, especially operational, human and marketing.

This question highlights two factors:

1. The level of knowledge within the management population of growing economies is lacking with many gaps.
2. The desire to learn about productivity in operations and the human side of it is quite strong.

Point 1 is not only restricted to less developed economies and the businesses coming out of there. In a recent assignment I completed the management populaton I worked with indicated that I was the first to provide any management training in several years, for which they were very appreciative.

Point 2 is an area where my colleagues counterparts in the West are very much in the dark about too. Over the last decade of working in the field of operational productivity improvement I have seen very little evidence of commercial acumen within a vast majority of client management. Most management I found were so 'busy' trying to get the job done that productivity and the implications of costs were nowhere on their radar.

So the education and training of management above and beyond what is taught at business school still lies within the development plans set out by companies for their management. The question is what is included in those development plans for people? It is not just about getting the job done, but  a demonstrable knowledge of a whole host of skills. Here are some which I think are valuable in todays corporate world:

1. The strategy and goals of the business
2. Personal goals and deliverables
3. Key Performance Indicators
4. Bottom-line results
5. Project management skills
6. People management skills
7. Presentation skills
8. Report / business plan writing skills
9. Communication skills
10. Leadership skills

These are only a handful of items to be considered in terms of moulding management into super-managers and should be evaluated annually to track progress and ability.

Management trainng is a crucial driver of business success and it should not be left to chance, it should planned and executed effectively. By doing this not only super-managers can be primed for succession but also weaker and less able individuals can be weeded out.

The request from my colleague and friend raised an interesting scenario for the future.

If the managers of companies in developing economies are seeking out knowlede and training, then where does that leave the managers of companies in Europe and America who have highly sophisticated HR and training divisions within their businesses?

I feel that the next generation of Lee Iaccocas and Jack Welch and the likes will come from  the East

Shah Alam

Hello Readers,

I am back from my unplanned absence due to ill health.

Today I want to talk about money as a motivator. Does money motivate people or is it just a temporary reprieve until we demand more money or the main underlying issue of demotivation rises again?

We've all read about Herzberg's Theory of Motivation and Maslow's Hierarchy of Needs and it has been demonstrated again and again that money in itself is not a motivator. However, you have to ask yourself what about the bankers that have almost taken the world economy to the brink of oblivion through their need to generate more and more profits and the dubious means by which they went about it. Even today politicians in both the US ad UK fight battles to curb the bonus awards by bankers, though they are now part or wholly nationalised entities. Do the bankers at RBS, Lloyds or Bank of America deserve the bonuses their employers are about to pay them on the back of taxpayer bailouts?

Don't get me wrong I am a capitalist through and through and the pursuit of profit is a legitimate cause when pursuing any enterprise that produces goods and services and brings about benefits for society as whole. A lot of naysayers might and are crowing about the faults of the capitalist system and how it creates greed through the pursuit of money as the end result. Yet, it is not the capitalist system that is at fault but those who have abused it in the pursuit of money. The name Madoff springs to mind amongst many others.

It may be that we are having a major shift in paradigm that will shatter the theories of both Herzberg and Maslow. Maybe we are entering an age where people will be motivated purely by receiving an ever increasing amount of money. This is very much evident in the corporate scandals we have been seeing since Enron and today the banks. So it seems that certain individuals who head global corporations are motivated by money and they will take those enterprises under their custodianship to bankruptcy in that pursuit.

Another arena where we're seeing a shift in how people make money and pursue money is in the increasing field of spread betting both financal instruments and sports. Gambling is one of the fastest growing industries and one example of this was when in the first week of February 2009, England was under several inches of snow. Many people who stayed at home logged onto the Internet to engage in sports and financial betting. That one day on 6th February saw one of the highest revenues being generated for the likes of bet365 and Betfair amongst others.

Observers may say well it was just a blip and people were bored. Really? Was that the answer? I don't think so. One has to look at the psychology behind the decision of an individual to engage in a gambling activity. People are trying to win money easily. There is nothing wrong with the gambling industry it employes hundreds of thousands of people globally.

So is it time to rewrite theories of motivation, maybe maybe not but a revisit of what makes people tick in the 21st century is a must. Not only to confirm or not those theories but look at where those shifts are occuring in society and to ensure those findings are used as learning factors within the corporate world.

Till the next time

Shah Alam

So what about the US government trying to put together a package to bail out the US motor industry?

Personally I think it is a huge and costly mistake to offer any financial support to these archaic business behemoths. They should be left to fend for themselves, and let the strongest and smartest survive.

For too long these dinosaurs have  displayed complacency and arrogance that got in the way of advancement and development of replacements for the internal combustion. The internal combustion engine is the most inefficient mode of powering a vehicle and it has been known for years. Even today they design and develop models like the Hummer, the Escalade and numerous other gas guzzling monsters that are totally out of sync with what is happening in the world today. They alongside the oil giants have lobbied the US government over the years to disincentivize new methods of powering transportation.

Their business model is flawed and against the Japanese car giants their cost base is too high. The unions have too much of a stranglehold on them to allow any advancement in working practices and freedom amongst the employees. Is it any wonder the motor city (Detroit) is a crime ridden, run-down and barren city.

This type of propping up inefficient businesses not only in the motor industry but also within the finance sector is storing up trouble for years to come. The sooner economists and governments wake up to this and realise that the free-market economy should be left to sort out the chaff from the true value based companies, the sooner the world economy can recover and move towards growth.

In my view both the US, UK and to a lesser degree the other Western world economies are going to be second class citizens in the global economy. The time will come when these economies will go with a begging bowl to the economies of the east to prop their 'house of sand' economies. This has already happened when Gordon Brown of the UK went on a whirlwond tour of the mid-east begging the Arab states to release their capital into the financial mess created by UK and US banks.

Their is a lot of trouble brewing ahead and many in power have got their heads in the sand

Shah Alam