Hello Readers,

Do you know when it is time to hang up your hat? Does anyone know when they should walk away and look at a new purpose in life?

I am seeing more and more that the answer is a resounding "no". Over the last few years I have come across numerous individuals both within teams that I have partaken in and client people who just don't know when to quit.

These individuals believe that they still know what they are talking about and have a dogged tenacity in their abilities to deliver. Yet, in reality they fail to give any value either in quality or quantity.

I believe it comes down to the fact that people do not have other interests or are so narrowly focussed that they do not see in what other way they can serve humanity. That service of humanity could be anything, anything that makes use of one's unique talents, skills and passions.

Take Michael Schumacher returning to F1, in my opinion "big mistake". Now he is critisized as a former champ who keeps crashing into other racers trying to jeopardize their efforts. So when he does eventually stop, that is what he will be known for rather than his previous championship status.

My message is evaluate yourself regularly as you reach the top of your game and if it is time to go, do it gracefully and find another purpose.

That's all for today

Shah Alam

Good Morning from my desk in London.

It's a glorious summers day and the ash clouds have abated for some weeks now and flights are resuming normality over the UK, apart from the disruption BA is suffering at the hands of the unions.

My thought for the day is about management inaction and why some companies put people in power who are unable to take the necessary steps to make change happen.

There are some managers who head up organizations but lack any form of leadership. They see the issues in front of their eyes and yet they prevaricate about what the consequences of those isses. When they communicate to their teams they beat their chest and talk tough and demand tough action. Yet, they do this and say it often that people become numb to their chest thumping. The usual comments are "Ah! he's like a dog without a bark".

The only way to overcome this when performance is lacking or actions not taken is to make an example of an individual or two. A leader can only coach, guide and mentor so much. There has to come a time when a clear message has to be communicated that if an individual does not perform then they will be fired, demoted or moved sideways.

In today's tough economic climate such decisions should not be stretched out over a long period of time but a common three strike rule could be used. If no action is taken when performance is below par then the leader will be seen to be weak and over will lose liking and respect.

Senior managers have no time to be caught like "deer in the headlights", they have to be seen to be decisive and action oriented. People look for strong leaders who have the vision, the focus and drive to take them to the next level of corporate success.

Shah Alam

Can politics be harmful to a company?

Yes I definitely think so. In the last decade as a consultant I have seen political games being played across all levels of an organisation. I've seen individuals who are the "yes" man or woman to their bosses. These "yes" people will tag along regardless of whether decisions will benefit the organization in any way.

I've seen examples of where senior management have commenced an initiative to improve or change the business for the better, then as is normal in business a new CEO comes in and those initiatives are dropped. This is not because the new CEO has proposed an alternative but rather to please the newcomer and ensure the individuals are on his good books, because he/she said not to proceed.

Of course certain amount of politicking does oil the machinery that are the behemoths of business world. Funnily, the larger the company the more political wrangling is prevalent. However excessive politics can freeze a business and make it immobile.

Decisions are stymied action is not taken and competitive edge is lost.

Internal politics can cause ill-feeling amongst colleagues, it can cause undue stress and a myriad of other symptoms which ultimately lead to lower productivity, a greater number of sick days and ultimately a huge cost to the business.

Unfortunately, as is human nature certain individuals encourage such behaviour within their departments, divisions and teams. This is part of ensuring their empire survives (see my previous article Empires Strike Back). Others resign and take the attitude of if you can't beat them then join them.

I don't think politics within any business can be eradicated, purely because we are all humans and it is nigh on impossible to say what an individual brings to a job apart from their academic and business experience.

However, I think it is crucial that management see this as a disease and weed out such behaviour where it is identifiable. In the business world there is only one model that should be supported above all others and that is meritocracy.

That ends today's musing, till the next time.

Shah Alam

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 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

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

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

Morning from a wet, windy and grey London, we’ve had freezing arctic weather a couple of days ago and now we have tropical rainstorms, albeit a bit cold.

Hi all, for today’s topic I want to talk about KPIs and how they can benefit your business.