From 'On Leadership' by John W. Gardner
First focus area - Management savvy
The first focus, Management Savvy includes the first three leadership tasks:
1. envisioning goals,
2. managing and
3. renewing.
The first task, envisioning goals - Your task is to envision what's possible and rally the troops to get it done.
The second focus area - Cultural intelligence,
It covers the next three tasks of the leader:
4. affirming values,
5. achieving workable unity and
6. representing the group.
The third and final focus area is Adaptability.
The three tasks under this topic include:
7. motivating,
8. explaining and
9. serving as a symbol.
See for a detailed presentation:
http://www.htrends.com/trends-detail-sid-21553.html
Friday, February 22, 2008
Thursday, February 21, 2008
Dismantling the Budgeting Process at UBS
Read an interesting article on how budgeting process was replaced by a performance metrics process at UBS in Business Strategy Review, Spring 2007
Death of Budgeting at UBS, page 76
Death of Budgeting at UBS, page 76
You have to Brand Innovations to Own Them
Read Brand Guru David Aakers' article in California Management Review Fall 2007. It is a special issue on Leading through Innovation
Schwab’s Gen X Marketing Initiative
Jonathan Craig
Vice President
Schwab Investor Services
Jonathan M. Craig leads Schwab’s Gen X initiative, responsible for creating the products, services and client experiences that will help Schwab attract and retain younger clients.
Craig has held a variety of marketing roles at Schwab. Previously, he worked in Client Experience with responsibility for products, pricing and service model for smaller-asset clients. He was also responsible for marketing and advertising support for Schwab's entry into banking and its re-launch into the mass active trader market. He has also managed Schwab’s corporate sponsorship portfolio and sports marketing programs, and he was instrumental in building Schwab’s original wireless business plan in 2000.
Prior to joining Schwab, Craig was employed with AT&T.
He received an MBA in Marketing and Finance from the University of California, Berkeley, and has an undergraduate degree in Economics and Political Science from McGill University in Montreal, Canada. He has also completed Executive Education courses at the University of Virginia Graduate School of Business.
April 20, 2007
Charles Schwab & Co. has reduced its account minimums for clients opening brokerage and retirement accounts, while at the same time eliminating minimums for clients who agree to automatic monthly deposits of more than $100. The company is aggressively courting less-affluent investors, hoping that smaller fees and account minimums will help the company develop lifelong clients from those rank-and-file Americans looking to get serious about personal retirement savings. The move marks the tenth time that CEO and founder Charles Schwab has slashed the company's fees since he re-emerged from retirement to lead the firm in May 2004.
Schwab vice president Jonathan Craig said in statement that younger investors "want fewer barriers like high initial investment requirements and fees preventing them from starting early on saving investing." After Schwab's latest reductions in fees, consumers can open account with an initial investment of $1,000, far less than the $2,500 that the company previously required. For customers lacking a lump sum to start an account, minimums are waived entirely if they agree to make automatic monthly deposits of at least $100. Schwab also announced that it has eliminated the penalties charged to accounts that fall below the minimum balance requirements.
HARNESSING THE WEB
For Charles Schwab, online forums gave product development teams insight into the demands of existing clients--and more recently, an entire generation of prospective clients.
Schwab set out to better understand generation X's financial concerns and saw the Web as the way to reach them.
Along with Communispace, which builds private online communities, Schwab created a Money and More Web site and invited 1,000 people in their 30s and 40s--none of them current Schwab customers--to participate in surveys and discussion groups. Four hundred accepted the invitation, spurred in part by incentives from Communispace. Over five months, Schwab used the site to survey participants about their investment, savings, and other financial habits and attitudes. But the richest information came from the free-form online discussions. Even without Schwab's asking about debt, for instance, the conversation revealed people's worries and desire to eliminate debt.
Craig described the conversations "an epiphany that drove a lot of our marketing." Among the new products launched as a result is a checking account that earns 4% interest, offering free checks and no ATM fees. Since launching in April 2007, Schwab has opened 60,000 new accounts, increasing its base of customers in their 30s and 40s by 40% this year compared with a year ago. Some of those are becoming brokerage clients for Schwab. "This is a gateway to investing" for some who were too overwhelmed or intimidated to open brokerage and other accounts, Craig says. The site is down now, but Schwab plans to launch a new Money and More site with more features.
People express more openly anonymously online. But don't conclude that you are finally hearing the truth. It might just as well be that people exaggerate their feelings for effect. Allen Weiss, a marketing professor at the University of Southern California business school and founder of the MarketingProfs Web site gives warning.
Charles Schwab's Gen X Money Mindsets Study
(media release dated 11th February 2008)
Charles Schwab's Gen X Money Mindsets Study, a segmentation study
of more than 5,000 Americans aged 25-40 found that younger investors
generally fall into six distinct categories based on their mindsets
and attitudes toward money.
According to Jonathan Craig "One of Schwab's primary goals is to better understand and serve Gen Xers, who are facing some real financial challenges," "The generation is challenged by rising costs of healthcare and education, diminishing
defined benefits through employers, and uncertainty around the future
of Social Security. We wanted to dig deeper to uncover this group's
attitudes when it comes to money, and better understand how these
attitudes guide their behaviors."
The Schwab Gen X Money Mindsets Study identified six distinct
Money Mindsets, each with its own lifestyle goals and financial
attitudes:
Money Mindset One: Paycheck to Paychecks
By far the largest group representing 25 percent of Gen Xers,
members of this predominately female group are extremely stressed
about their personal and professional lives. They are less confident
than any other group about having a bright future, and are twice as
likely to be unsettled and pessimistic about their financial
situations.
-- More than any other Gen Xers, "Paycheck to Paychecks" live on
a strict budget with nothing left over to save (85 percent vs.
47 percent for all Gen Xers).
-- More than the other groups, 48 percent report
financially-induced anxiety (vs. 18 percent of all Gen Xers).
-- Eighty-one percent stress about the direction of their
personal lives and 67 percent are worried about the direction
of their professional lives.
Money Mindset Two: Spend Now, Pay Laters
Seventeen percent of Gen Xers fall into this category of
predominately city dwellers that tend to be optimistic, yet somewhat
unrealistic about their futures. Overwhelmingly male (77 percent),
this group is incurring significant debt, and believes that Social
Security will be there for them when they retire.
-- While almost half (48 percent) say they have enough money and
don't worry about saving for the future, 67 percent say they
have too much debt to think about investing.
-- This group is almost twice as likely as any other segment to
believe Social Security will be a big part of their retirement
income (57 percent vs. 26 percent of all Gen Xers).
-- Sixty-one percent -- more than any other segment -- don't
worry much about money and think "it's all going to work out."
Money Mindset Three: Confident and Risk-Tolerants
Representing 15 percent of the overall Gen X population, members
of this group have high incomes, active lifestyles and high levels of
engagement in their financial future. They are more likely to be
married, and believe that by taking risks they can reach lofty
financial and lifestyle goals.
-- Almost all (96 percent) are confident their future is bright,
compared with 65 percent of fellow Gen Xers.
-- More than three quarters (76 percent) are confident that
someday most of their income will come from investments,
versus 36 percent of Gen Xers overall.
-- Nearly eight in ten (79 percent) say that many of their
successes have come because they have been willing to take
risks, compared with 55 percent of fellow Gen Xers.
Money Mindset Four: No Money, No Worries
This group represents 15 percent of the Gen X population. They are at the bottom of the earnings spectrum yet are very optimistic about life. They are more likely to be single, consider investing risky, and have the fewest number of credit cards. This group also has very little trust in financial firms or advisors.
While 57 percent make less than $50,000 per year, this group doesn’t worry much about money.
On a typical day, nearly seven in ten (69 percent) spend more time thinking about their weekend plans than the state of their finances (vs. 45 percent for all Gen Xers).
This group is more likely than any other group to say they don’t have a financial advisor because “you can’t trust them” -- four in ten (41 percent) won’t trust a broker to take care of their financial needs.
Money Mindset Five: Cautious Savers
Approximately 14 percent of the Gen X population, this group tends to be financially conservative and concerned about money, highly educated and financially secure, yet is late to adopt new products. They are also more likely focused on home and family than they are on having active social lives.
More than eight in ten (82 percent) say they plan for the future rather than live for today.
Nearly seven in ten (69 percent) try to minimize risk and uncertainty in their lives (vs. 59 percent of all Gen Xers).
Only 16 percent think they will be in debt for the rest of their lives, compared with 35 percent of Gen Xers overall.
Money Mindset Six: Overwhelmed but Optimistics
Predominately female, these Gen Xers have significant debt, adjustable rate mortgages, and high rates of financially-induced irritability or anxiety. Despite this, they manage to stay positive about their futures. This group represents 13 percent of the Gen X population.
Eighty percent live on very strict budgets with nothing left over to save. More than any other group, they think about their finances daily (87 percent, compared with 66 percent of all Gen Xers).
More than a quarter (26 percent) report financially-induced anxiety (vs. 18 percent of all Gen Xers).
This group is future-focused, with three quarters (75 percent) saying they have a vision of where they want to be in ten years (vs. 59 percent of all Gen Xers)
Some Common Traits
In addition to the six mindsets, the Schwab Gen X Money Mindsets Study identified several key characteristics that are held by the majority of Gen Xers. The study reveals that many Gen Xers are not characterized by skeptical attitudes, and instead favor a more traditional outlook on life and financial aspirations.
American Dreams: Gen Xers have often been labeled as “slackers” and were assumed to have rejected the traditional working-class lifestyle. However, almost two in three (64 percent) say they are focused on attaining the American Dream of family, homeownership, and financial security. Almost two in five (39 percent) would like to attain the lifestyle enjoyed by the financially successful people who surround them.
Drowning in Debt: Gen Xers are saddled with debt. Almost 45 percent say they have too much debt to even think about saving or investing, and more than a third (35 percent) think they will be in debt for the rest of their lives.
Financial Anxiety: Most Gen Xers are worried about their financial futures. Two-thirds (66 percent) admit to thinking about their finances on a daily basis, and nearly half (46 percent) also worry about the finances of their parents and siblings.
No Savings: Many Gen Xers report an inability to save, with nearly half (47 percent) reporting they live on a very strict budget with nothing left over to save. When asked if they are more proactive in saving for a vacation or retirement, 43 percent say they focus on saving for a big trip.
Little Faith in Financial Firms: Many Gen Xers do not believe financial firms can help them. More than half (51 percent) think that investment firms don’t care about people like them – those who don’t have a lot of money. And 46 percent feel that by turning to firms and advisors, they might end up spending more money than they make.
About the Study
Few generations have been so thoroughly scrutinized and misunderstood as Generation X. The members of the MTV Generation have been consumers almost since birth, but their importance grows as they transition into investors, homeowners and parents. To provide fresh insights into this generation, Charles Schwab conducted The Gen X Money Mindsets Study – it incorporates more than 2,000 online and face-to-face interviews nationally and an additional 3,000 interviews in America’s largest cities. This effort produced six unique profiles of Gen X attitudes and mindsets toward life and money – and toward understanding how those mindsets guide the group’s financial behaviors.
A segmentation study creates profiles of a population by using statistical analysis to define groups of individuals around certain characteristics.
About Kelton Research
Kelton Research is a full service market research consultancy with offices in Los Angeles, New York, and Washington DC. Kelton serves as a strategic partner to both Fortune 500 corporations and smaller companies, utilizing a wide range of qualitative and quantitative methodologies to drive tactical recommendations for clients. For more information about Kelton’s services, please call (310) 479-4040 or visit www.keltonresearch.com.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.0 million client brokerage accounts, 1.2 million corporate retirement plan participants, 262,000 banking accounts, and $1.4 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Schwab Institutional division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products.
Contact for more information:
Matt Hurwitz,Charles Schwab, 415-636-3700
matt.hurwitz@schwab.com
http://www.informationweek.com/management/showArticle.jhtml?articleID=204201055&pgno=2&queryText=
http://www.businesswire.com/portal/site/schwab/index.jsp?epi-content=GENERIC&beanStrID=schwabNdm&viewID=news_view&ndmConfigId=1002458&newsId=20080211005651&newsLang=en&vnsId=4608
Vice President
Schwab Investor Services
Jonathan M. Craig leads Schwab’s Gen X initiative, responsible for creating the products, services and client experiences that will help Schwab attract and retain younger clients.
Craig has held a variety of marketing roles at Schwab. Previously, he worked in Client Experience with responsibility for products, pricing and service model for smaller-asset clients. He was also responsible for marketing and advertising support for Schwab's entry into banking and its re-launch into the mass active trader market. He has also managed Schwab’s corporate sponsorship portfolio and sports marketing programs, and he was instrumental in building Schwab’s original wireless business plan in 2000.
Prior to joining Schwab, Craig was employed with AT&T.
He received an MBA in Marketing and Finance from the University of California, Berkeley, and has an undergraduate degree in Economics and Political Science from McGill University in Montreal, Canada. He has also completed Executive Education courses at the University of Virginia Graduate School of Business.
April 20, 2007
Charles Schwab & Co. has reduced its account minimums for clients opening brokerage and retirement accounts, while at the same time eliminating minimums for clients who agree to automatic monthly deposits of more than $100. The company is aggressively courting less-affluent investors, hoping that smaller fees and account minimums will help the company develop lifelong clients from those rank-and-file Americans looking to get serious about personal retirement savings. The move marks the tenth time that CEO and founder Charles Schwab has slashed the company's fees since he re-emerged from retirement to lead the firm in May 2004.
Schwab vice president Jonathan Craig said in statement that younger investors "want fewer barriers like high initial investment requirements and fees preventing them from starting early on saving investing." After Schwab's latest reductions in fees, consumers can open account with an initial investment of $1,000, far less than the $2,500 that the company previously required. For customers lacking a lump sum to start an account, minimums are waived entirely if they agree to make automatic monthly deposits of at least $100. Schwab also announced that it has eliminated the penalties charged to accounts that fall below the minimum balance requirements.
HARNESSING THE WEB
For Charles Schwab, online forums gave product development teams insight into the demands of existing clients--and more recently, an entire generation of prospective clients.
Schwab set out to better understand generation X's financial concerns and saw the Web as the way to reach them.
Along with Communispace, which builds private online communities, Schwab created a Money and More Web site and invited 1,000 people in their 30s and 40s--none of them current Schwab customers--to participate in surveys and discussion groups. Four hundred accepted the invitation, spurred in part by incentives from Communispace. Over five months, Schwab used the site to survey participants about their investment, savings, and other financial habits and attitudes. But the richest information came from the free-form online discussions. Even without Schwab's asking about debt, for instance, the conversation revealed people's worries and desire to eliminate debt.
Craig described the conversations "an epiphany that drove a lot of our marketing." Among the new products launched as a result is a checking account that earns 4% interest, offering free checks and no ATM fees. Since launching in April 2007, Schwab has opened 60,000 new accounts, increasing its base of customers in their 30s and 40s by 40% this year compared with a year ago. Some of those are becoming brokerage clients for Schwab. "This is a gateway to investing" for some who were too overwhelmed or intimidated to open brokerage and other accounts, Craig says. The site is down now, but Schwab plans to launch a new Money and More site with more features.
People express more openly anonymously online. But don't conclude that you are finally hearing the truth. It might just as well be that people exaggerate their feelings for effect. Allen Weiss, a marketing professor at the University of Southern California business school and founder of the MarketingProfs Web site gives warning.
Charles Schwab's Gen X Money Mindsets Study
(media release dated 11th February 2008)
Charles Schwab's Gen X Money Mindsets Study, a segmentation study
of more than 5,000 Americans aged 25-40 found that younger investors
generally fall into six distinct categories based on their mindsets
and attitudes toward money.
According to Jonathan Craig "One of Schwab's primary goals is to better understand and serve Gen Xers, who are facing some real financial challenges," "The generation is challenged by rising costs of healthcare and education, diminishing
defined benefits through employers, and uncertainty around the future
of Social Security. We wanted to dig deeper to uncover this group's
attitudes when it comes to money, and better understand how these
attitudes guide their behaviors."
The Schwab Gen X Money Mindsets Study identified six distinct
Money Mindsets, each with its own lifestyle goals and financial
attitudes:
Money Mindset One: Paycheck to Paychecks
By far the largest group representing 25 percent of Gen Xers,
members of this predominately female group are extremely stressed
about their personal and professional lives. They are less confident
than any other group about having a bright future, and are twice as
likely to be unsettled and pessimistic about their financial
situations.
-- More than any other Gen Xers, "Paycheck to Paychecks" live on
a strict budget with nothing left over to save (85 percent vs.
47 percent for all Gen Xers).
-- More than the other groups, 48 percent report
financially-induced anxiety (vs. 18 percent of all Gen Xers).
-- Eighty-one percent stress about the direction of their
personal lives and 67 percent are worried about the direction
of their professional lives.
Money Mindset Two: Spend Now, Pay Laters
Seventeen percent of Gen Xers fall into this category of
predominately city dwellers that tend to be optimistic, yet somewhat
unrealistic about their futures. Overwhelmingly male (77 percent),
this group is incurring significant debt, and believes that Social
Security will be there for them when they retire.
-- While almost half (48 percent) say they have enough money and
don't worry about saving for the future, 67 percent say they
have too much debt to think about investing.
-- This group is almost twice as likely as any other segment to
believe Social Security will be a big part of their retirement
income (57 percent vs. 26 percent of all Gen Xers).
-- Sixty-one percent -- more than any other segment -- don't
worry much about money and think "it's all going to work out."
Money Mindset Three: Confident and Risk-Tolerants
Representing 15 percent of the overall Gen X population, members
of this group have high incomes, active lifestyles and high levels of
engagement in their financial future. They are more likely to be
married, and believe that by taking risks they can reach lofty
financial and lifestyle goals.
-- Almost all (96 percent) are confident their future is bright,
compared with 65 percent of fellow Gen Xers.
-- More than three quarters (76 percent) are confident that
someday most of their income will come from investments,
versus 36 percent of Gen Xers overall.
-- Nearly eight in ten (79 percent) say that many of their
successes have come because they have been willing to take
risks, compared with 55 percent of fellow Gen Xers.
Money Mindset Four: No Money, No Worries
This group represents 15 percent of the Gen X population. They are at the bottom of the earnings spectrum yet are very optimistic about life. They are more likely to be single, consider investing risky, and have the fewest number of credit cards. This group also has very little trust in financial firms or advisors.
While 57 percent make less than $50,000 per year, this group doesn’t worry much about money.
On a typical day, nearly seven in ten (69 percent) spend more time thinking about their weekend plans than the state of their finances (vs. 45 percent for all Gen Xers).
This group is more likely than any other group to say they don’t have a financial advisor because “you can’t trust them” -- four in ten (41 percent) won’t trust a broker to take care of their financial needs.
Money Mindset Five: Cautious Savers
Approximately 14 percent of the Gen X population, this group tends to be financially conservative and concerned about money, highly educated and financially secure, yet is late to adopt new products. They are also more likely focused on home and family than they are on having active social lives.
More than eight in ten (82 percent) say they plan for the future rather than live for today.
Nearly seven in ten (69 percent) try to minimize risk and uncertainty in their lives (vs. 59 percent of all Gen Xers).
Only 16 percent think they will be in debt for the rest of their lives, compared with 35 percent of Gen Xers overall.
Money Mindset Six: Overwhelmed but Optimistics
Predominately female, these Gen Xers have significant debt, adjustable rate mortgages, and high rates of financially-induced irritability or anxiety. Despite this, they manage to stay positive about their futures. This group represents 13 percent of the Gen X population.
Eighty percent live on very strict budgets with nothing left over to save. More than any other group, they think about their finances daily (87 percent, compared with 66 percent of all Gen Xers).
More than a quarter (26 percent) report financially-induced anxiety (vs. 18 percent of all Gen Xers).
This group is future-focused, with three quarters (75 percent) saying they have a vision of where they want to be in ten years (vs. 59 percent of all Gen Xers)
Some Common Traits
In addition to the six mindsets, the Schwab Gen X Money Mindsets Study identified several key characteristics that are held by the majority of Gen Xers. The study reveals that many Gen Xers are not characterized by skeptical attitudes, and instead favor a more traditional outlook on life and financial aspirations.
American Dreams: Gen Xers have often been labeled as “slackers” and were assumed to have rejected the traditional working-class lifestyle. However, almost two in three (64 percent) say they are focused on attaining the American Dream of family, homeownership, and financial security. Almost two in five (39 percent) would like to attain the lifestyle enjoyed by the financially successful people who surround them.
Drowning in Debt: Gen Xers are saddled with debt. Almost 45 percent say they have too much debt to even think about saving or investing, and more than a third (35 percent) think they will be in debt for the rest of their lives.
Financial Anxiety: Most Gen Xers are worried about their financial futures. Two-thirds (66 percent) admit to thinking about their finances on a daily basis, and nearly half (46 percent) also worry about the finances of their parents and siblings.
No Savings: Many Gen Xers report an inability to save, with nearly half (47 percent) reporting they live on a very strict budget with nothing left over to save. When asked if they are more proactive in saving for a vacation or retirement, 43 percent say they focus on saving for a big trip.
Little Faith in Financial Firms: Many Gen Xers do not believe financial firms can help them. More than half (51 percent) think that investment firms don’t care about people like them – those who don’t have a lot of money. And 46 percent feel that by turning to firms and advisors, they might end up spending more money than they make.
About the Study
Few generations have been so thoroughly scrutinized and misunderstood as Generation X. The members of the MTV Generation have been consumers almost since birth, but their importance grows as they transition into investors, homeowners and parents. To provide fresh insights into this generation, Charles Schwab conducted The Gen X Money Mindsets Study – it incorporates more than 2,000 online and face-to-face interviews nationally and an additional 3,000 interviews in America’s largest cities. This effort produced six unique profiles of Gen X attitudes and mindsets toward life and money – and toward understanding how those mindsets guide the group’s financial behaviors.
A segmentation study creates profiles of a population by using statistical analysis to define groups of individuals around certain characteristics.
About Kelton Research
Kelton Research is a full service market research consultancy with offices in Los Angeles, New York, and Washington DC. Kelton serves as a strategic partner to both Fortune 500 corporations and smaller companies, utilizing a wide range of qualitative and quantitative methodologies to drive tactical recommendations for clients. For more information about Kelton’s services, please call (310) 479-4040 or visit www.keltonresearch.com.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.0 million client brokerage accounts, 1.2 million corporate retirement plan participants, 262,000 banking accounts, and $1.4 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Schwab Institutional division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products.
Contact for more information:
Matt Hurwitz,Charles Schwab, 415-636-3700
matt.hurwitz@schwab.com
http://www.informationweek.com/management/showArticle.jhtml?articleID=204201055&pgno=2&queryText=
http://www.businesswire.com/portal/site/schwab/index.jsp?epi-content=GENERIC&beanStrID=schwabNdm&viewID=news_view&ndmConfigId=1002458&newsId=20080211005651&newsLang=en&vnsId=4608
Transforming Marketing - by Mohanbir Sawhney
Mohanbir S. Sawhney is the Tribune Professor of Technology and the Director of the Center for Research in Technology and Innovation at the Kellogg School of Management.
The post is based on an article in CMO magazine (a publication of CXO Media, Inc.), September 2004
Seven-point manifesto for chief marketing officers to transform marketing:
1. Market the marketing department.
It is the CMO’s responsibility to define and communicate the “value proposition” of marketing to everyone in the organization by understanding the needs of internal customers. To do this, CMOs need to learn the languages of CFOs, CEOs and R&D and then clearly define how marketing adds value to the company. They need to identify a few key, high-level marketing priorities, and they need to link these priorities to the company’s growth and profitability objectives.
2. Change the marketing mind-set.
The traditional marketing mind-set is a command-and-control mind-set that relies on selling to passive customers whose demand and perceptions can be influenced and manipulated. In an age of information democracy, passive customers are dwinlding. CMOs need to evolve their organizations to a “connect and collaborate” mind-set—where the company collaborates with customers to create, deliver and share value. Cocreation of value with customers requires creating a shared vocabulary, shared interests, shared platforms and shared trust with customers.
3. Earn credibility through customer expertise.
Marketers often complain about the lack of authority and lack of influence over their colleagues in engineering, operations or finance. The simple fact is—nobody will give you a seat at the table; you have to earn it. And the best way to gain power is through knowing your customers better than anyone else in the organization. Customer expertise will provide marketers with the courage of conviction they need to promote their point of view to other parts of the organization. Remember that you cannot outsource customer understanding to market research vendors and then be an expert on customers. You have to get in front of customers and get inside their lives.
4. Focus on the customer experience.
Too many marketing organizations limit themselves to the products and services that they make, without realizing that it is the total customer experience that matters most in differentiating yourself and delighting customers. Focusing on the customer experience requires marketers to think holistically about every single customer touch point and every stage in the customer lifecycle. It also demands a total quality approach to designing and improving the customer experience. It is the CMO’s responsibility to ensure that every employee in the firm understands how he or she impacts the customer experience. Good customer experience incidents and poor customer experience incidents need to be captured and shared with all employees.
And it is the responsibility of marketing to orchestrate the customer experience across all channels, partners, business units and stages in the customer buying cycle.
5. Think in process terms.
Marketing has traditionally thought of its activities in terms of the infamous four P’s (product, price, promotion and place). This is a functional view of marketing activities, and it fosters the mistaken impression that marketing functions are independent activities. Instead, marketing activities should be conceptualized as a set of logically related value-creation processes. Drawing insights from the business process reengineering literature, marketing needs to be organized around processes, not functions like channel marketing, audience marketing or product marketing. These value-creation processes include the processes for understanding, defining, realizing, delivering, capturing, communicating and sustaining value. Each process has a set of activities and deliverables, and these processes together constitute the new work of marketers.
6. Create an ROI culture.
Marketing must conform to the adage, “If you can’t measure it, you can’t manage it.” CMOs need to promote a return on investment mind-set that should permeate every marketing initiative. Marketing initiatives need to be derived from marketing objectives, and marketing initiatives need to be evaluated on a set of objective metrics. In simple terms, marketers need to define where they want to go (objectives), how they will get there (strategy), what it will take to get there (resources), and how they know if they get there (metrics). Creating an ROI culture does not mean every marketing initiative has to be quantified in terms of incremental revenue. Marketers can rely on intermediate metrics that follow customers through the “hierarchy of effects”—from creating awareness to changing perceptions, to creating demand, to enhancing loyalty and retention. More difficult but equally important questions that CMOs need to tackle include ways to optimize marketing spending across channels and establishing the financial payoffs of longer-term marketing investments.
7. Embrace technology.
Marketing activities largely remain manual. This situation is beginning to change with the development of exciting new technologies for marketing resource management (MRM), marketing analytics and customer intelligence gathering. CMOs need to embrace these technologies to improve the visibility of marketing operations, to improve the efficiency of marketing processes, and to institutionalize best practices that have been encoded in software and tools.
Marketing is the most fascinating area of management, marketers need to combine qualitative insights and intuition with quantitative analysis and rigor.
Marketing is the key to continued business success in a competitive world. However, marketing needs to change with the times if it is to stake its claim as the function that creates the most value for the organization. As marketing leaders, CMOs need to combine their passion for customers with a business value mind-set, creativity with rigorous analysis and brand-building strategies with hard-nosed tactical execution.
For full article
http://magnostic.wordpress.com/best-of-cmo/a-manifesto-for-marketing/
The post is based on an article in CMO magazine (a publication of CXO Media, Inc.), September 2004
Seven-point manifesto for chief marketing officers to transform marketing:
1. Market the marketing department.
It is the CMO’s responsibility to define and communicate the “value proposition” of marketing to everyone in the organization by understanding the needs of internal customers. To do this, CMOs need to learn the languages of CFOs, CEOs and R&D and then clearly define how marketing adds value to the company. They need to identify a few key, high-level marketing priorities, and they need to link these priorities to the company’s growth and profitability objectives.
2. Change the marketing mind-set.
The traditional marketing mind-set is a command-and-control mind-set that relies on selling to passive customers whose demand and perceptions can be influenced and manipulated. In an age of information democracy, passive customers are dwinlding. CMOs need to evolve their organizations to a “connect and collaborate” mind-set—where the company collaborates with customers to create, deliver and share value. Cocreation of value with customers requires creating a shared vocabulary, shared interests, shared platforms and shared trust with customers.
3. Earn credibility through customer expertise.
Marketers often complain about the lack of authority and lack of influence over their colleagues in engineering, operations or finance. The simple fact is—nobody will give you a seat at the table; you have to earn it. And the best way to gain power is through knowing your customers better than anyone else in the organization. Customer expertise will provide marketers with the courage of conviction they need to promote their point of view to other parts of the organization. Remember that you cannot outsource customer understanding to market research vendors and then be an expert on customers. You have to get in front of customers and get inside their lives.
4. Focus on the customer experience.
Too many marketing organizations limit themselves to the products and services that they make, without realizing that it is the total customer experience that matters most in differentiating yourself and delighting customers. Focusing on the customer experience requires marketers to think holistically about every single customer touch point and every stage in the customer lifecycle. It also demands a total quality approach to designing and improving the customer experience. It is the CMO’s responsibility to ensure that every employee in the firm understands how he or she impacts the customer experience. Good customer experience incidents and poor customer experience incidents need to be captured and shared with all employees.
And it is the responsibility of marketing to orchestrate the customer experience across all channels, partners, business units and stages in the customer buying cycle.
5. Think in process terms.
Marketing has traditionally thought of its activities in terms of the infamous four P’s (product, price, promotion and place). This is a functional view of marketing activities, and it fosters the mistaken impression that marketing functions are independent activities. Instead, marketing activities should be conceptualized as a set of logically related value-creation processes. Drawing insights from the business process reengineering literature, marketing needs to be organized around processes, not functions like channel marketing, audience marketing or product marketing. These value-creation processes include the processes for understanding, defining, realizing, delivering, capturing, communicating and sustaining value. Each process has a set of activities and deliverables, and these processes together constitute the new work of marketers.
6. Create an ROI culture.
Marketing must conform to the adage, “If you can’t measure it, you can’t manage it.” CMOs need to promote a return on investment mind-set that should permeate every marketing initiative. Marketing initiatives need to be derived from marketing objectives, and marketing initiatives need to be evaluated on a set of objective metrics. In simple terms, marketers need to define where they want to go (objectives), how they will get there (strategy), what it will take to get there (resources), and how they know if they get there (metrics). Creating an ROI culture does not mean every marketing initiative has to be quantified in terms of incremental revenue. Marketers can rely on intermediate metrics that follow customers through the “hierarchy of effects”—from creating awareness to changing perceptions, to creating demand, to enhancing loyalty and retention. More difficult but equally important questions that CMOs need to tackle include ways to optimize marketing spending across channels and establishing the financial payoffs of longer-term marketing investments.
7. Embrace technology.
Marketing activities largely remain manual. This situation is beginning to change with the development of exciting new technologies for marketing resource management (MRM), marketing analytics and customer intelligence gathering. CMOs need to embrace these technologies to improve the visibility of marketing operations, to improve the efficiency of marketing processes, and to institutionalize best practices that have been encoded in software and tools.
Marketing is the most fascinating area of management, marketers need to combine qualitative insights and intuition with quantitative analysis and rigor.
Marketing is the key to continued business success in a competitive world. However, marketing needs to change with the times if it is to stake its claim as the function that creates the most value for the organization. As marketing leaders, CMOs need to combine their passion for customers with a business value mind-set, creativity with rigorous analysis and brand-building strategies with hard-nosed tactical execution.
For full article
http://magnostic.wordpress.com/best-of-cmo/a-manifesto-for-marketing/
Wednesday, February 13, 2008
Innovation - Looking for Opportunity
The distinction between innovation and invention is rather important. (Joshua Lerner and Marco Iansiti, Evidence Regarding Microsoft and Innovation, AEI-Brookings Joint Center Publication (2002)).
Invention, by itself is not as important as innovation. F. Scott Kieff, argued that society will benefit more from the commercialization of inventions (which turns them into innovations) than by inventions themselves, because of: 1) positive externalities resulting from the diffusion, refinment process, 2) consumer access to new technologies.
Innovation has to be a managerial skill of entrepreneurs. Innovation has to be a managerial skill of all managers.
What is an innovation: Successful innovators take ideas and turn them into opportunities by adding a business model that creates sustainable economic value for all stakeholders. They then go one step further, implement the business model and create a sustainable business.
Innovators have to look for ideas. They have to look at some of the disruptive changes in their industry that might serve as the source of innovation. The areas they can look at are:
Technology: What are the key emerging technologies, and how are they being used inside and outside the industry, company, and region to create proprietary advantage?
Business Models: Are there new business models emerging that one can adopt or adapt to deliver radical improvements in the way business is being done?
Will these improvements drive profitable growth by creating proprietary advantages in the way you do business? Can you expand not just your "share of market" but also your "share of wallet" by adding new business models—for example, if you currently have a product business, can you add information, services, or solutions? Can you expand into adjacent businesses by either taking over activities that used to be done by someone else in your industry, expanding into new markets, or adding new products?
Industry Dynamics: Are there fragmented industries where significant value can be delivered through consolidation? Are there shifts in power (e.g., entry or exit of a key player or consolidation of several players) that threaten your existing position or create opportunities to partner in your existing business or enter a new one?
Globalization: What's happening in another part of the world that you could adopt or adapt in your environment? What are the proprietary advantages that you have based on your access to people, information, materials, or capital? Are new markets or businesses emerging in other parts of the world that create opportunities or threats?
Offshoring and Outsourcing: Are there opportunities to create value by outsourcing or offshoring activities that you currently perform inside your organization? Are there activities that you currently source from outside that you should be doing inside to create proprietary advantage?
Regulatory, Macroeconomic, Political, Societal: Are there impending (or early) shifts in regulation, political power, or society that threaten to disrupt entrenched power bases and provide opportunities for new entrants?
A disruptive change can be viewed from 2 very different perspectives—as an opportunity or as a threat. In fact, entrepreneurs often view disruptive change as a source of opportunity. When they see a disrupted business environment—whether that disruption is from new technologies, new business models, or new regulations—they ask, "How can I leverage these changes to create value?"
Disruptions in the business environment cause economic shifts that destabilize industries, companies, and even countries.But established companies often approach innovation and disruption much differently. Having worked hard to align strategy and organization to support the current business, they develop tunnel vision, encouraging employees, customers, suppliers, and partners to work together to deliver today's business results. Even when disruptive opportunities are identified, tightly aligned organizations, business models, and industry relationships make it tough to respond quickly and effectively. As a result, executives in established firms often frame disruption as a threat. When they see changes happening, they work to defend their existing business model and ask, "How can I insulate against these disruptive threats and preserve my current business model?"
The right way of managing change is to turn disruptive change into a source of ideas.
Jeff Timmons, whose book New Venture Creation has been a bestseller for over a decade, calls good ideas a "tool in the hands of an entrepreneur." Indeed, finding good ideas is the first step in the innovation process. Successful serial entrepreneurs are able to recognize patterns before an opportunity takes shape. They search for ideas at the intersection of markets, industries, and emerging technologies. They look for disruptors that will "unfreeze" a stable industry and the companies that compete within them. They look for business models that worked well in one market and can be adapted and applied in another. They recognize that they must listen to customers but must sometimes introduce and educate the marketplace to new approaches.
Entrepreneurs identify ideas by raising their head above day-to-day operations and expanding their vision. They then prioritize and narrow the many ideas they generate into a potential opportunity that addresses a compelling problem for customers who are able—and willing—to pay. The following guidelines can help to leverage disruption to turn ideas into opportunities to create sustainable business advantage.
Listen to—and learn from—the market: Identify sources of significant problems that cannot be solved using today's product and service offerings. Focus first on the problem—not the solution. Be sure that you don't just listen to your current customers. They have the same tunnel-vision problems that you do and may even actively push to keep you from considering new approaches. Keep in mind Henry Ford's classic comment as he struggled to take advantage of new technologies in the early 1900s: "If I asked people what they wanted," he said, "they would have said, 'Faster horses.'
Expand your horizons: Set aside a portion of every week for broadening your perspective. Identify important global and local trends that signal potential revolutionary shifts in customer behavior. Look for new business models and technologies that can radically transform product, market, and industry economics and power. Benchmark inside and outside your industry, remembering to benchmark the rate of change in value delivered—not just a single point in time. Clarify and challenge the biases and business models in your firm and in your industry.
Identify potential disruptors that could be a source of opportunity: Identify people with a broad range of perspectives on potential disruptive opportunities. Working individually, analyze the disruptive trends within the key categories discussed earlier.
Select ideas for further evaluation: Now bring the individuals together. Working as a team, have each person share his or her analysis of disruptors. Discuss what you have learned from the analysis and brainstorm business ideas that leverage disruptors to create value for you and for your customers, partners, and other stakeholders. Identify the potential value of promising ideas and a process for prioritizing and choosing among them. Do a "back-of-the-envelope" assessment of each idea.
Turn promising ideas into opportunities: Identify a promising opportunity and develop a business plan that highlights both long-term and short-term ("go-to-market") opportunity. Define product-market positioning at entry and the capabilities and resources required. Define a plan for evolving strategy and capabilities to exploit long-term value potential.
Implement to reduce risk and manage uncertainty: Successful entrepreneurs are not risk seekers. Instead, they have learned to manage risk by identifying key assumptions and uncertainties in their business plan and then staging commitments and implementation to reduce uncertainty while building a sustainable business. Established firms must adopt a similar approach to risk management when venturing into uncharted territories. You can't simply use the same approach that you use to incrementally evolve a mature business. Some firms create separate new venture groups responsible for leading radical business innovation and disruptive change. Others maintain a closer connection to established business groups to facilitate future integration of new businesses into the established business. We've seen examples of success using both approaches. The key is to become skilled at the entrepreneurial innovation process as you search for ideas in the face of disruption, turn ideas into opportunities, choose opportunities to pursue, successfully launch new businesses, and grow and evolve them to create sustainable proprietary advantage.
Source:
Jumpstarting Innovation:
Using Disruption to Your Advantage
Published: September 4, 2007
Author: Lynda M. Applegate
http://hbswk.hbs.edu/item/5636.html
-------------------------
Jeff Timmon's Book
New Venture Creation
Jeffrey A. Timmons · Stephen Spinelli
McGraw-Hill/Irwin, 700 pages
Description: [From McGraw-Hill] Timmons & Spinelli's, New Venture Creation: Entrepreneurship For The 21st Century, 6/e is a perforated paperback text that covers the process of getting a new venture started, growing the venture, successfully harvesting it and starting again. Through text, case studies, and hands-on exercises, the book guides students in discovering the concepts of entrepreneurship and the competencies, skills, know-how and experience that are sufficient to pursue different entrepreneurial opportunities. The authors recognize that there is no substitute for actually starting a company, but believe that it is possible to expose students to many of the vital issues and immerse them in key learning experiences.
Interview with Timmons, 2004
http://www.journalofbusinessstrategy.com/articles/JeffreyTimmons.shtml
Invention, by itself is not as important as innovation. F. Scott Kieff, argued that society will benefit more from the commercialization of inventions (which turns them into innovations) than by inventions themselves, because of: 1) positive externalities resulting from the diffusion, refinment process, 2) consumer access to new technologies.
Innovation has to be a managerial skill of entrepreneurs. Innovation has to be a managerial skill of all managers.
What is an innovation: Successful innovators take ideas and turn them into opportunities by adding a business model that creates sustainable economic value for all stakeholders. They then go one step further, implement the business model and create a sustainable business.
Innovators have to look for ideas. They have to look at some of the disruptive changes in their industry that might serve as the source of innovation. The areas they can look at are:
Technology: What are the key emerging technologies, and how are they being used inside and outside the industry, company, and region to create proprietary advantage?
Business Models: Are there new business models emerging that one can adopt or adapt to deliver radical improvements in the way business is being done?
Will these improvements drive profitable growth by creating proprietary advantages in the way you do business? Can you expand not just your "share of market" but also your "share of wallet" by adding new business models—for example, if you currently have a product business, can you add information, services, or solutions? Can you expand into adjacent businesses by either taking over activities that used to be done by someone else in your industry, expanding into new markets, or adding new products?
Industry Dynamics: Are there fragmented industries where significant value can be delivered through consolidation? Are there shifts in power (e.g., entry or exit of a key player or consolidation of several players) that threaten your existing position or create opportunities to partner in your existing business or enter a new one?
Globalization: What's happening in another part of the world that you could adopt or adapt in your environment? What are the proprietary advantages that you have based on your access to people, information, materials, or capital? Are new markets or businesses emerging in other parts of the world that create opportunities or threats?
Offshoring and Outsourcing: Are there opportunities to create value by outsourcing or offshoring activities that you currently perform inside your organization? Are there activities that you currently source from outside that you should be doing inside to create proprietary advantage?
Regulatory, Macroeconomic, Political, Societal: Are there impending (or early) shifts in regulation, political power, or society that threaten to disrupt entrenched power bases and provide opportunities for new entrants?
A disruptive change can be viewed from 2 very different perspectives—as an opportunity or as a threat. In fact, entrepreneurs often view disruptive change as a source of opportunity. When they see a disrupted business environment—whether that disruption is from new technologies, new business models, or new regulations—they ask, "How can I leverage these changes to create value?"
Disruptions in the business environment cause economic shifts that destabilize industries, companies, and even countries.But established companies often approach innovation and disruption much differently. Having worked hard to align strategy and organization to support the current business, they develop tunnel vision, encouraging employees, customers, suppliers, and partners to work together to deliver today's business results. Even when disruptive opportunities are identified, tightly aligned organizations, business models, and industry relationships make it tough to respond quickly and effectively. As a result, executives in established firms often frame disruption as a threat. When they see changes happening, they work to defend their existing business model and ask, "How can I insulate against these disruptive threats and preserve my current business model?"
The right way of managing change is to turn disruptive change into a source of ideas.
Jeff Timmons, whose book New Venture Creation has been a bestseller for over a decade, calls good ideas a "tool in the hands of an entrepreneur." Indeed, finding good ideas is the first step in the innovation process. Successful serial entrepreneurs are able to recognize patterns before an opportunity takes shape. They search for ideas at the intersection of markets, industries, and emerging technologies. They look for disruptors that will "unfreeze" a stable industry and the companies that compete within them. They look for business models that worked well in one market and can be adapted and applied in another. They recognize that they must listen to customers but must sometimes introduce and educate the marketplace to new approaches.
Entrepreneurs identify ideas by raising their head above day-to-day operations and expanding their vision. They then prioritize and narrow the many ideas they generate into a potential opportunity that addresses a compelling problem for customers who are able—and willing—to pay. The following guidelines can help to leverage disruption to turn ideas into opportunities to create sustainable business advantage.
Listen to—and learn from—the market: Identify sources of significant problems that cannot be solved using today's product and service offerings. Focus first on the problem—not the solution. Be sure that you don't just listen to your current customers. They have the same tunnel-vision problems that you do and may even actively push to keep you from considering new approaches. Keep in mind Henry Ford's classic comment as he struggled to take advantage of new technologies in the early 1900s: "If I asked people what they wanted," he said, "they would have said, 'Faster horses.'
Expand your horizons: Set aside a portion of every week for broadening your perspective. Identify important global and local trends that signal potential revolutionary shifts in customer behavior. Look for new business models and technologies that can radically transform product, market, and industry economics and power. Benchmark inside and outside your industry, remembering to benchmark the rate of change in value delivered—not just a single point in time. Clarify and challenge the biases and business models in your firm and in your industry.
Identify potential disruptors that could be a source of opportunity: Identify people with a broad range of perspectives on potential disruptive opportunities. Working individually, analyze the disruptive trends within the key categories discussed earlier.
Select ideas for further evaluation: Now bring the individuals together. Working as a team, have each person share his or her analysis of disruptors. Discuss what you have learned from the analysis and brainstorm business ideas that leverage disruptors to create value for you and for your customers, partners, and other stakeholders. Identify the potential value of promising ideas and a process for prioritizing and choosing among them. Do a "back-of-the-envelope" assessment of each idea.
Turn promising ideas into opportunities: Identify a promising opportunity and develop a business plan that highlights both long-term and short-term ("go-to-market") opportunity. Define product-market positioning at entry and the capabilities and resources required. Define a plan for evolving strategy and capabilities to exploit long-term value potential.
Implement to reduce risk and manage uncertainty: Successful entrepreneurs are not risk seekers. Instead, they have learned to manage risk by identifying key assumptions and uncertainties in their business plan and then staging commitments and implementation to reduce uncertainty while building a sustainable business. Established firms must adopt a similar approach to risk management when venturing into uncharted territories. You can't simply use the same approach that you use to incrementally evolve a mature business. Some firms create separate new venture groups responsible for leading radical business innovation and disruptive change. Others maintain a closer connection to established business groups to facilitate future integration of new businesses into the established business. We've seen examples of success using both approaches. The key is to become skilled at the entrepreneurial innovation process as you search for ideas in the face of disruption, turn ideas into opportunities, choose opportunities to pursue, successfully launch new businesses, and grow and evolve them to create sustainable proprietary advantage.
Source:
Jumpstarting Innovation:
Using Disruption to Your Advantage
Published: September 4, 2007
Author: Lynda M. Applegate
http://hbswk.hbs.edu/item/5636.html
-------------------------
Jeff Timmon's Book
New Venture Creation
Jeffrey A. Timmons · Stephen Spinelli
McGraw-Hill/Irwin, 700 pages
Description: [From McGraw-Hill] Timmons & Spinelli's, New Venture Creation: Entrepreneurship For The 21st Century, 6/e is a perforated paperback text that covers the process of getting a new venture started, growing the venture, successfully harvesting it and starting again. Through text, case studies, and hands-on exercises, the book guides students in discovering the concepts of entrepreneurship and the competencies, skills, know-how and experience that are sufficient to pursue different entrepreneurial opportunities. The authors recognize that there is no substitute for actually starting a company, but believe that it is possible to expose students to many of the vital issues and immerse them in key learning experiences.
Interview with Timmons, 2004
http://www.journalofbusinessstrategy.com/articles/JeffreyTimmons.shtml
High Performance Business - Accenture Articles
High Performance Business
The Wall Street Journal High Performance Business Articles Sponsored by Accenture
Read all about it! Accenture teams with The Wall Street Journal for a series of articles exploring the many facets of High Performance Business. Written by seasoned business journalists, the articles feature company examples, insights from business experts and highlights of Accenture's High Performance Business Research—all in the context of today's business challenges.
The articles, starting with the most recent, are:
How Talent Creates a Competitive Edge and Powers Organizations to Success (November 15, 2007)
Good Intuition Still Helps, but Successful Marketing Today Is More of a Science (July 13, 2007)
Corporations Need a Global Mindset to Succeed in Today's Multipolar Business World (June 18, 2007)
Corporate Resilience Comes from Planning, Flexibility and the Creative Management of Risk (May 2, 2007) Podcast available.
Serial, Timely Transformations Help Successful Companies Stay Ahead of the Curve (February 13, 2007) Podcast available
A Modular Approach in Business Simplifies Internal Processes, Boosts Innovation and Brings Sustained Competitive Advantage (June 29, 2006)
A Three-Prong Strategy Smooths the Path to Profitable M&As (June 7, 2006)
Intelligent Use of Information is a Powerful Corporate Tool (April 27, 2006)
The Key to Sustainable Success is Unfettered Innovation (March 27, 2006)
A Vital Building Block in Attaining That Competitive Edge Calls for the Creation of a Unique Corporate Anatomy (May 2, 2005)
Sustained Success Hinges on Mastering Key Business Functions and Creating Distinctive Capabilities (April 19, 2005)
YOu can access the articles from
http://www.accenture.com/Global/High_Performance_Business/WSJHPBArticles.htm
The Wall Street Journal High Performance Business Articles Sponsored by Accenture
Read all about it! Accenture teams with The Wall Street Journal for a series of articles exploring the many facets of High Performance Business. Written by seasoned business journalists, the articles feature company examples, insights from business experts and highlights of Accenture's High Performance Business Research—all in the context of today's business challenges.
The articles, starting with the most recent, are:
How Talent Creates a Competitive Edge and Powers Organizations to Success (November 15, 2007)
Good Intuition Still Helps, but Successful Marketing Today Is More of a Science (July 13, 2007)
Corporations Need a Global Mindset to Succeed in Today's Multipolar Business World (June 18, 2007)
Corporate Resilience Comes from Planning, Flexibility and the Creative Management of Risk (May 2, 2007) Podcast available.
Serial, Timely Transformations Help Successful Companies Stay Ahead of the Curve (February 13, 2007) Podcast available
A Modular Approach in Business Simplifies Internal Processes, Boosts Innovation and Brings Sustained Competitive Advantage (June 29, 2006)
A Three-Prong Strategy Smooths the Path to Profitable M&As (June 7, 2006)
Intelligent Use of Information is a Powerful Corporate Tool (April 27, 2006)
The Key to Sustainable Success is Unfettered Innovation (March 27, 2006)
A Vital Building Block in Attaining That Competitive Edge Calls for the Creation of a Unique Corporate Anatomy (May 2, 2005)
Sustained Success Hinges on Mastering Key Business Functions and Creating Distinctive Capabilities (April 19, 2005)
YOu can access the articles from
http://www.accenture.com/Global/High_Performance_Business/WSJHPBArticles.htm
Talent Creates a Competitive Edge - Wall Street Journal Article
Home High Performance Business
How Talent Creates a Competitive Edge and Powers Organizations to Success
If companies are able to master the four capabilities of defining, discovering, developing and deploying talent, they too can become talent-powered organizations.
Originally published in The Wall Street Journal, November 15, 2007
You can access this article from
http://www.accenture.com/Global/High_Performance_Business/HowSuccess.htm
How Talent Creates a Competitive Edge and Powers Organizations to Success
If companies are able to master the four capabilities of defining, discovering, developing and deploying talent, they too can become talent-powered organizations.
Originally published in The Wall Street Journal, November 15, 2007
You can access this article from
http://www.accenture.com/Global/High_Performance_Business/HowSuccess.htm
Timely Transformations - High Performance
High Performance Business
Serial, Timely Transformations Help Successful Companies Stay Ahead of the Curve
The article was Originally published in The Wall Street Journal, February 13, 2007.
Today the paper Mint carried a supplement which is an advertisment of accenture that has this article
The article highlights
1. Capacity to change
2. Confidence to change
3. Will to change
4. Behavioral changes
You can access this article from
http://www.accenture.com/Global/High_Performance_Business/SerialTimelyTransform.htm
Serial, Timely Transformations Help Successful Companies Stay Ahead of the Curve
The article was Originally published in The Wall Street Journal, February 13, 2007.
Today the paper Mint carried a supplement which is an advertisment of accenture that has this article
The article highlights
1. Capacity to change
2. Confidence to change
3. Will to change
4. Behavioral changes
You can access this article from
http://www.accenture.com/Global/High_Performance_Business/SerialTimelyTransform.htm
Tuesday, February 12, 2008
Northstar Wealth Management Solutions
Northstar Wealth Management - Sales and Proposals
Northstar Wealth Management - Planning
Northstar Wealth Management - Product catalog
Northstar Wealth Management - Portfolio construction
Northstar Wealth Management - Client wealth management
Read the full white paper by Infosys on wealth management
http://www.infosys.com/industries/banking-capital-markets/white-papers/wealth-management-2007.pdf
Northstar Wealth Management - Planning
Northstar Wealth Management - Product catalog
Northstar Wealth Management - Portfolio construction
Northstar Wealth Management - Client wealth management
Read the full white paper by Infosys on wealth management
http://www.infosys.com/industries/banking-capital-markets/white-papers/wealth-management-2007.pdf
Marketing BUZZ - UK Based Small Business Marketing Consultant
About The Marketing Buzz
The Marketing Buzz was set up to help UK small and medium sized businesses grow.
The Marketing Buzz was the brainchild of one of UK's Leading Marketing Experts, Mark Burdett. Mark was born in Northamptonshire and now resides in Newcastle upon Tyne. With over 18 years worth of marketing experience Mark has worked on highly successful campaigns for companies including Norwich Union, Zurich and Kia and has a proven track record of profitable marketing for businesses and companies of all types and size.
If you want to grow your business.......................you'll want The Marketing Buzz.
From help with advertising, article writing, branding, copywriting, direct mail, e-mail marketing, internet marketing, SEO, pay per click, banner advertising, directory advertising, market research, marketing planning and strategy, networking, public relations, sales, telemarketing, website design and yellow pages advertising to getting more business from your existing customers The Marketing Buzz can help.
Contact address
Calling: 01207 272100
Emailing: contactus@themarketingbuzz.co.uk
Writing to: The Marketing Buzz
11 Cricket Terrace
Burnopfield
Newcastle upon Tyne
Tyne & Wear
NE16 6QL
Website: http://www.themarketingbuzz.co.uk/
The Marketing Buzz was set up to help UK small and medium sized businesses grow.
The Marketing Buzz was the brainchild of one of UK's Leading Marketing Experts, Mark Burdett. Mark was born in Northamptonshire and now resides in Newcastle upon Tyne. With over 18 years worth of marketing experience Mark has worked on highly successful campaigns for companies including Norwich Union, Zurich and Kia and has a proven track record of profitable marketing for businesses and companies of all types and size.
If you want to grow your business.......................you'll want The Marketing Buzz.
From help with advertising, article writing, branding, copywriting, direct mail, e-mail marketing, internet marketing, SEO, pay per click, banner advertising, directory advertising, market research, marketing planning and strategy, networking, public relations, sales, telemarketing, website design and yellow pages advertising to getting more business from your existing customers The Marketing Buzz can help.
Contact address
Calling: 01207 272100
Emailing: contactus@themarketingbuzz.co.uk
Writing to: The Marketing Buzz
11 Cricket Terrace
Burnopfield
Newcastle upon Tyne
Tyne & Wear
NE16 6QL
Website: http://www.themarketingbuzz.co.uk/
The Secret To Getting Your Press Release Published
The Secret To Getting Your Press Release Published
by MarketingBuzz
You have a newsworthy story that you want to release to the world in the form of a press release. It is well written and you are expecting it to bring you and your company free exposure. It is formatted correctly and it really says what you want it to say.
So then if youve done all of these things there is a good chance of your press release being acted upon right? NO. Well, not yet anyway.
You see you can have the best press release in the World but unless it is sent to the right person then there is still every chance it will not be dealt with (or at least dealt with in the way you want it to be).
This article is therefore all about making sure you contact the right person. There are many ways to do this and these include.
1. Buy a Media Guide. Publications such as the Guardian Media Guide or BRAD will contain useful information about who to contact in the press.
2. Get someone to do it for you. You can subscribe to a media contact service or use online press release agencies.
Both are perfectly valid options to making sure your press release reaches the right person but surely the best thing about PR is that it is free. Therefore to make sure it remains free how about option number 3?
3. Do it Yourself. In the UK during the 80s and 90s we went through a DIY explosion (not literally) with people wanting to do things themselves. This usually involved walking around Homebase or B&Q at a weekend buying things like shelves and drills, taking them home and then drilling through a cable and having no electric until Monday morning (or was that just me?)
Anyway, the Norties has produced a different breed of person. DIY has been replaced with GSI (or the get someone in generation). I mean why should you do it yourself when someone else can do it for you?
Well when it comes to PR and your business because it is cheaper, it is not as hard as your think, it is better in the long run and it gives you an amazing sense of achievement.
So then let us start with the basics. How exactly can you do it yourself?
You can use the internet to find publications or types of media you want to target (these could be magazines, local papers, television channels, websites and many more)
The internet is great as many of the media will have websites of their own containing useful information about who works there and who you need to contact. This could be list of journalists, editors or support staff. Basically find out their contact information and contact them.
You can do this by emailing your Press Release and making a phone call to make sure they have it. You can call them and ask for their e-mail address, then follow that up once sent.
You can send them your Press Release in the post and follow it up with an email or telephone call
You have to be persistent but once youve made contact and established they are the right person you can keep in touch with them.
What is vital when it comes to PR and business in general is that we prefer to deal with people we like. If you make a good first impression with the media getting future PR published will be so much easier. Your contact may actually come to you for stories. Remember, the media need you more than you need them. No stories equals No sales. The Top Tips when it comes to contacting the right person are therefore:
1. Make it personal. Get your key contacts name and use it.
2. Be persistent. Phone them, email them, fax them and send them post. Keep doing this until you get a definite NO. What might not be news worthy today could be just what they are looking for tomorrow.
3. What is in it for them? People who work in the media dont have time to waste so when you are speaking to them get to the point and tell them the benefits of dealing with you.
4. Ask questions. If they arent interested ask them if they know who will be. Journalists and people in the media have many contacts and one of them could be just the person to help you (and you to help them).
5. It might be a numbers game. Dont just send your press release to one person at a publication. Until youve established your main contact send it to anyone who might be interested such as editors, journalists, deputy editors etc
6. Stay in touch. When youve established a good contact stay in touch and become their expert in your field. That way when they need something for your industry they will come to you. Send them a birthday or Christmas email. You would be amazed how the little things make the most difference.
7. Be remembered. The media love people with passion, with something to stay, people who are controversial, who are tenacious and who have opinions. Dont be boring as you will be instantly forgettable. Be remembered and be published.
Make contacts with the right people in the media and PR can become your best means of Marketing. Remember an article published by the media will generally produce much better results than an advert in the same publication as PR acts as a third party endorsement. It is the media almost recommending or endorsing your services or products.
About the Author
The Marketing Buzz are Business Marketing Experts and offer all types of Marketing Services to Help You Grow Your Business.
Article Source: Content for Reprint
Monday, February 11, 2008
Master Lead Times To Maximize Publicity Coverage
Master Lead Times To Maximize Publicity Coverage
by Diana Ratliff
Getting your news story featured in the newspaper or talked about on the radio is iffy at the best of times â?? getting coverage on the day or week thatâ??s optimal for your business is even more problematic. But you can optimize your chances for timely coverage by mastering the concept of media lead times.
Lead time refers to the time a reporter needs to prepare a story for publication. Most media, including radio, newspapers, magazines and television, have some sort of lag between when a story idea or press release is accepted and when it is actually aired or printed. This could range from a couple of days to a few weeks, depending partly on the urgency or timeliness of the story and partly on the particular publishing constraints of the medium chosen.
For example, in print, a reporter may need to do further research and check sources, then prepare the story for the editor, and then make whatever tweaks or edits the editor requires. The story will also need typeset, proofread or any of a number of other tasks to get the story ready for public consumption â?? and if itâ??s a magazine or newspaper, thereâ??s distribution time too.
So if you want to get publicity for your latest trendy gadget or most innovative new service, you need to plan ahead, keeping your preferred release date in mind as well as the appropriate time frame for media preparation. Aside from being smart, itâ??s also simple consideration to the writer or reporter.
Lead times vary by media, but the following guidelines are fairly reliable.
* Daily newspapers will need a few days to a few weeks for feature stories. The same is true of calendars and newspapers online.
* Daily newspapers will need one to two days for hard news.
* Monthly magazines usually require two to three months from the date they receive your story idea or press release.
* Major national magazines (like Newsweek or Good Housekeeping) usually require four to six months of release date.
* Radio is often very flexible, with the timeliness of your news playing a more major role. You may get a call today for an interview spot tonight. However, coveted syndicated radio shows require more lead time.
* Similarly, you can sometimes get same-day coverage on television if your news is timely, especially if thereâ??s a local angle. Television variety shows require more advance notice than news shows.
Again, these are general guidelines; if you want to ensure that you donâ??t miss a deadline for a specific publication or media outlet, call or visit their website and request a media kit from their advertising department. Since advertisers need to know when their ads need to be submitted, the lead time will be clearly stated in that kit.
Smart media-seekers make use of several other strategies to maximize the chances of receiving coverage.
For example, rather that submitting news that may or may not be of interest, some people actually tailor news releases to fit the demands of their target publications. One way to do this is to check out a media outletâ??s Editorial calendar for the month. This will allow you to see precisely what they are looking for that month. Armed with that information, you can then call the publication, ask for the reporter assigned to that story and contact them explaining how you can contribute.
Another strategy is to plan your publicity to coincide with what the media is looking for during certain times of the year, as described below.
January to March Publicity Topics:
Annual trends, previews and predictions. Tie-ins to Super bowl, Easter and the Academy Awards can be well received.
April to June Publicity Topics:
No holidays to worry about, so just about anything goes. Events you could associate with are baseball startup, end of school (beginning of summer), Memorial Day and summer vacations.
July to September Publicity Topics:
Typically a slow time of year for the media. Light news, back to school and trends are popular topics to tie into. Events include July 4th, summer movies, travel, and entertainment, and back-to-school topics.
October to December Publicity Topics:
A very busy period for the media â?? and as you might suspect, strong tie-ins to the holidays maximize your chances of exposure. Post-holiday and end of-year topics are also good (the week between Christmas and New Yearâ??s Day is traditionally very slow).
About the Author
Internet entrepreneur Diana Ratliff reveals the secrets of using offline publicity to generate online traffic in her newest ebook, The Publicity Traffic System.
Article Source: Content for Reprint
Formatting Your Press Release
Formatting Your Press Release
by thinkbox
Once you know the basics involved in writing a Press Release, you'll find it 's a pretty simple process to put one together. In fact, if you conform to "industry standards" and include the information that reporters and editors are expecting to find, your press release stands a very good chance of actually being used.
Here are the formatting rules you need to follow:
Use mixed case. Never submit a press release in all UPPER case letters. It 's much more difficult to read that way.
Always follow the rules of grammar and style. Errors in grammar and style affect your credibility. Excessive errors will cause your press release to be rejected.
Don't use HTML. When sending your press release to online Media, do not embed HTML or other markup languages in it. Including such formatting will negatively impact the readability of your press release.
Use more than one paragraph. If you can say everything in only a few sentences, then chances are you do not have a newsworthy story. (*Note: You may hear that your press release should "never" be more than one page long.
I have found that a press release should be as long as it takes to tell your story. If that means one and a-half or two pages, then that 's how long it should be. Do your best to keep it short and sweet, but don't take out important information just to make it fit on one page.)
Include a summary paragraph for online submissions. Some online news services request that you include a one-page summary of your press release. This is because some distribution points only receive your headline, summary and a link to your press release.
If you are submitting to online services, not including the summary paragraph may reduce the effectiveness of your press release. This is not usually necessary with print, television or radio media.
Write your press release on a word processor instead of composing it online. When you've finished writing it, print it out, and proofread it. Rewrite, edit, and proofread again, until you've got it exactly how you want it, and there are no mistakes.
Because most people have a harder time proofreading their own writing, ask someone you trust to proofread it for you.
Do not include your e-mail address in the body of your release - especially when submitting your press release online, or publishing your press release on your website or in your blog.
You can include your email address in the contact information if you wish, but if it goes online be prepared to be spammed. Most online media services will have a place for your email address in the submission process, for your protection, and most of your local media will prefer a telephone number to contact you with.
Here is a basic template you can use when writing your Press Release:
Starting at the top of the page, on your company letterhead, write the words "PRESS RELEASE" in all capital letters, centered and bolded.
Hit the enter-bar twice, so you go down two lines.
On the left hand side of the page, write the date you want the information to be released, or if it 's "FOR IMMEDIATE RELEASE" write that, again in all CAPS and bolded.
On the same line, but to the far right, write the words "CONTACT INFORMATION" again, bolded and in capital letters. Go down to the next line, and list the contact person and their phone number.
It 's always a good idea to have two contact people whenever possible and two phone numbers for each of them -for example, the office number and cell phone numbers. You can also put your email address here.
Hit the enter-bar twice again, and type in your headline. (It needs to be centered and bolded, but not necessarily in all CAPS). Your headline needs to be short, snappy and relevant. You want it to grab the reader 's attention.
Go down two spaces again.
The body of your press release should be double spaced and typed in an easy to read size 12 font, such as Times New Roman or Arial. Leave lots of white space in your press release - use at least one to two inch margins around your page.
The first paragraph of your press release needs to provide the reader with enough basic information to make them keep reading. It should answer the "W" questions - who, what, when, and where and why. As you've only got a few sentences, make every word count.
The second paragraph of your press release will answer the "so what" question. It needs to explain who is going to be interested in this information and why they should care about it. The second paragraph is an ideal place to include a quote, or a touchie-feely "Kodak" moment to add human interest to your story.
The third (and often final) paragraph of your press release should answer any other questions the reporter or journalist might still have about your story. Here is where you can include information about your company, or any technical stuff.
Make your press release long enough to say what you need to say. If it goes beyond one page, then centered under the last line on the first page, write the word "MORE" in all caps and bold it.
Then on the second page, on the top right hand side of the page, write "Page 2" and on the line under that, write the title of your press release again.
That 's all there is to it.
Although the information you provide will be different each time you write a press release, the basic format will always stay the same.
You've now got enough information to be able to write your first press release. So, write on and good luck!
About the Author
AL MENDOZA has been doing Internet Marketing since 1998 and earns his living 100% online. Mr. Mendoza has authored several publications and ecourses. He is the CEO of MarketingThinkbox.com
Article Source: Content for Reprint
The Do 's and Don'ts of Writing A Press Release
The Do 's and Don'ts of Writing A Press Release
by MarketingBuzz
What do you need to do before you even put pen to paper and start writing a press release?
Although writing a successful press release is pretty straightforward, unless you do it correctly your hard work will be rewarded with the STB technique. That is your press release will be Screwed up into a tiny ball and it will be Thrown into the nearest Bin by the person you sent it to. And whilst the STB technique is seldom discussed I am afraid the vast majority of press releases fall foul to its nasty end. However, yours will not.
So let us start with some things you need to think about and so before writing your press release.
To begin with you need to think about why you are actually writing the release in the first place. Is it to tell the world about something amazing that has happened that you simply have to share with them? Is it to update your customers (or potential customers) with news of a new product or service you have? Or is it to increase business? A wise man (I think it was big chinned Football guru Jimmy Hill) once said you cannot get to where you are going until you know where you are. Wise words indeed and words that should be listened to if you want your press release to be acted upon.
The second thing you need to consider is who are you going to send it to? Before you even consider putting pen to paper you have to know who the release is going to be sent to as this will have a vital impact on what you say and how you say it. I mean do you really think Richard Attenborough would have sent the same press release about Jurassic Park to the National History Museum as he would have to a tabloid newspaper? No he most certainly would not have. Instead the headline to one might have been Tyrannosaurus Rex makes triumphant return in the land of the lost giants whereas the other headline might have been do you think he Dino Saw Us? Mad Professor opens new theme park. Basically you need to make sure you know where your release will be sent so it can be tailored to that audience.
Please also make your press release interesting and newsworthy to the people you are sending it to. If you dont you know what will happen (see STB above).
The final thing you have to do before writing your press release is to know that the person you are sending it to does not care about you and does not care about your business. All they care about is does what you are writing about interest them and more importantly will it be of interest and useful to their readers, listeners, viewers or site visitors. And whilst this may seem a harsh thing to say it is true. If you dont believe me send out a press release not taking this into account and watch the results. Oh yes, and listen hard enough and you might hear the STB!
So there you go just a few things you should be doing before writing your press release. And here are a few things you most definitely should not do:
Do not ramble. Journalists dislike press releases that dont get to the point. If you can get to the point and do not ramble on, your release has a much better chance of being published. If however you are about to sit down and write war and peace then go walk the dog, make a cup of tea or do whatever it takes to get you out of this mindset.
Do not lie. Remember this is not your CV! Keep the contents of your release factual, correct and do not be tempted to tell anything but the truth.
Do not make mistakes. If journalists hate one thing more than rambling its errors, spelling mistakes and releases that are not grammatically correct. With spell check there is no excuse nowadays.
And one final thought, (very Jerry Springer) STBs will no longer be an option for you and your business we will leave them for your competitors.
About the Author
The Marketing Buzz are Small Business Marketing Experts and offer all types of Marketing Services to Help You Grow Your Business.
Article Source: Content for Reprint
Managerial Skills - Introduction
---------------
Dictionary meaning
Main Entry: skill
Function: noun
Etymology: Middle English skil, from Old Norse, distinction, knowledge; probably akin to Old English scylian to separate, sciell shell — more at shell
Date: 13th century
2 a: the ability to use one's knowledge effectively and readily in execution or performance b: dexterity or coordination especially in the execution of learned physical tasks
3: a learned power of doing something competently : a developed aptitude or ability
http://www.merriam-webster.com/dictionary
skill: Definition
Ability and capacity acquired through deliberate, systematic, and sustained effort to smoothly and adaptively carryout complex activities or job functions involving ideas (cognitive skills), things (technical skills), and/or people (interpersonal skills).
http://www.businessdictionary.com/definition/skill.html
Noun: skill skil
An ability that has been acquired by training
- accomplishment, acquirement, acquisition, attainment
Ability to produce solutions in some problem domain
"the skill of a well-trained boxer"
- science
http://www.wordwebonline.com/en/SKILL
Skill
The familiar knowledge of any art or science, united with readiness and dexterity in execution or performance, or in the application of the art or science to practical purposes; power to discern and execute; ability to perceive and perform; expertness; aptitude; as, the skill of a mathematician, physician, surgeon, mechanic, etc.
Phocion, . . . by his great wisdom and skill at negotiations, diverted Alexander from the conquest of Athens. --Swift.
Where patience her sweet skill imparts. --Keble.
http://www.dictionary.net/skill
------------------
Out of the above dictionary definitions, skill denotes the ability to perform a task effectively and efficiently. The ability to use one's knowledge effectively and readily in execution or performance points out it. The meaning, "The familiar knowledge of any art or science, united with readiness and dexterity in execution or performance," also denotes it.
So managerial skill is to be understood as the ability to perform managerial tasks effectively with readines and dexterity. Skills requires knowledge and it has to be acquired by practice. A skilled person is one who has done the job effectively number of times and in the process of doing so improved his efficiency at the job.
Various authors identified certain tasks of management discipline or subject as managerial skills.
I am presently using the following two books to develop material on managerial skills.
Leadership Skills by William R. Tracey, Amacom 1990
Main Chapters
1. Forecasting: prelude to planning
2. Strategic planning
3. Budgeting
4. Marketing
5. Innovating
6. Resolving conflict
7. Disciplining
8. Rewarding
9. Improving Productivity
10. Managing costs
11. Managing time
12. Managing change
13. Managing ethics
14. Developing yourself
15. Leading
Basic Managerial Skills for All, E.H.McGrath, S.J.,Prentice Hall of India, 1989
Main Chapters
How to Read
How to Write
How to Learn
How to Speak
How to Listen
HOw to Become Real You
How to Run a Meeting
How to Teach and Train
How to Manage
In the How to Manage chapter a number of managerial skills are pointed out.
Planning a project
How to manage by objectives
How to draw up action plans for objectives
How to supervise
Managing time
How to plan a change
Creativity: a managerial skill
Decision making
Motivation
How to reduce interpersonal conflict
How to secure cooperation
How to promote good discipline
intergroup conflict resolution
How to negotiate
How to maintain grace under pressure
Management process is covered by Koontz, O'Donnel and Weihrich under the heads: Planning, Organizing, Staffing, Leading and Controlling. According to authors, the concepts, principles, theory, and techniques are organized and can be organized under the classification used by them. Managerial skills can also be covered under these heads to provide clarity to the management student and the management practioner on the performance tasks of managers.
Koontz, O'Donnel and Weihrich, Management, Seventh Edition, McGraw Hill International Book Company, Tokyo, 1980
Dictionary meaning
Main Entry: skill
Function: noun
Etymology: Middle English skil, from Old Norse, distinction, knowledge; probably akin to Old English scylian to separate, sciell shell — more at shell
Date: 13th century
2 a: the ability to use one's knowledge effectively and readily in execution or performance b: dexterity or coordination especially in the execution of learned physical tasks
3: a learned power of doing something competently : a developed aptitude or ability
http://www.merriam-webster.com/dictionary
skill: Definition
Ability and capacity acquired through deliberate, systematic, and sustained effort to smoothly and adaptively carryout complex activities or job functions involving ideas (cognitive skills), things (technical skills), and/or people (interpersonal skills).
http://www.businessdictionary.com/definition/skill.html
Noun: skill skil
An ability that has been acquired by training
- accomplishment, acquirement, acquisition, attainment
Ability to produce solutions in some problem domain
"the skill of a well-trained boxer"
- science
http://www.wordwebonline.com/en/SKILL
Skill
The familiar knowledge of any art or science, united with readiness and dexterity in execution or performance, or in the application of the art or science to practical purposes; power to discern and execute; ability to perceive and perform; expertness; aptitude; as, the skill of a mathematician, physician, surgeon, mechanic, etc.
Phocion, . . . by his great wisdom and skill at negotiations, diverted Alexander from the conquest of Athens. --Swift.
Where patience her sweet skill imparts. --Keble.
http://www.dictionary.net/skill
------------------
Out of the above dictionary definitions, skill denotes the ability to perform a task effectively and efficiently. The ability to use one's knowledge effectively and readily in execution or performance points out it. The meaning, "The familiar knowledge of any art or science, united with readiness and dexterity in execution or performance," also denotes it.
So managerial skill is to be understood as the ability to perform managerial tasks effectively with readines and dexterity. Skills requires knowledge and it has to be acquired by practice. A skilled person is one who has done the job effectively number of times and in the process of doing so improved his efficiency at the job.
Various authors identified certain tasks of management discipline or subject as managerial skills.
I am presently using the following two books to develop material on managerial skills.
Leadership Skills by William R. Tracey, Amacom 1990
Main Chapters
1. Forecasting: prelude to planning
2. Strategic planning
3. Budgeting
4. Marketing
5. Innovating
6. Resolving conflict
7. Disciplining
8. Rewarding
9. Improving Productivity
10. Managing costs
11. Managing time
12. Managing change
13. Managing ethics
14. Developing yourself
15. Leading
Basic Managerial Skills for All, E.H.McGrath, S.J.,Prentice Hall of India, 1989
Main Chapters
How to Read
How to Write
How to Learn
How to Speak
How to Listen
HOw to Become Real You
How to Run a Meeting
How to Teach and Train
How to Manage
In the How to Manage chapter a number of managerial skills are pointed out.
Planning a project
How to manage by objectives
How to draw up action plans for objectives
How to supervise
Managing time
How to plan a change
Creativity: a managerial skill
Decision making
Motivation
How to reduce interpersonal conflict
How to secure cooperation
How to promote good discipline
intergroup conflict resolution
How to negotiate
How to maintain grace under pressure
Management process is covered by Koontz, O'Donnel and Weihrich under the heads: Planning, Organizing, Staffing, Leading and Controlling. According to authors, the concepts, principles, theory, and techniques are organized and can be organized under the classification used by them. Managerial skills can also be covered under these heads to provide clarity to the management student and the management practioner on the performance tasks of managers.
Koontz, O'Donnel and Weihrich, Management, Seventh Edition, McGraw Hill International Book Company, Tokyo, 1980
Friday, February 8, 2008
Soft Skills Training - Skill Deficit Issues
Symmary of
Behavior Management: Getting to the Bottom of Social Skills Deficits
By: Judith Osgood Smith (1995)
One of the most puzzling and frustrating problems encountered by parents and teachers of students with learning disabilities (LD) is not the student who obviously acts out or engages in overtly antisocial behaviors, but rather the one who simply fails to perform the appropriate behavior for a given circumstance or setting. This problem is frequently labeled a social skill deficit (Gresham & Elliott, 1989).
Students with LD may exhibit social skill deficits that are either skill-based or performance-based.
In other words, either the skill may not be in the student's repertoire or the student may have acquired the skill but it is not performed at an acceptable level.
Effective intervention requires identification and remediation of the specific type of deficit exhibited by the student.
Skill-based deficits
A skill-based deficit exists when a student has not learned how to perform a given behavior.
For example, a student who has not learned to do long division could be said to have a long division skill deficit. Similarly, a student who hasn't mastered the skill of greeting others appropriately may have a skill deficit in that area.
A critical issue is whether the student actually possesses the desired skill. If not, it is unreasonable to demand that it occur or scold the student if it doesn't.
We may determine if a student has a skill deficit by observing whether the desired skill has ever been performed. If not, one may hypothesize that the skill is not in the student's repertoire. This may be tested further by providing strong incentives to perform the desired behavior. If the student fails to perform under these conditions, it is likely that the problem stems from a skill deficiency.
Don't scold or reprimand the student for having a skill based deficit; instead, teach the skill.
Teaching social skills
Generally, a skill-based deficit is due to lack of opportunity to learn or limited models of appropriate behavior (Gresham & Elliott, 1989).
In these instances, direct instruction, or skill training, is necessary.
The same principles apply to teaching social skills as to academic skills: provide ample demonstration/modeling, guided practice with feedback, and independent practice.
Hazel, Schumaker, Sherman, and SheldonWildgen (1981) listed eight fundamental social skills which can be taught through direct instruction:
Giving positive feedback (e.g., thanking and giving compliments),
Giving negative feedback (e.g., giving criticism or correction),
Accepting negative feedback without hostility or inappropriate reactions,
Resisting peer pressure to participate in delinquent behavior,
Solving personal problems,
Negotiating mutually acceptable solutions to problems,
Following instructions, and
Initiating and maintaining a conversation.
They recommended teaching these skills by providing definitions, illustrations with examples, modeling, verbal rehearsal, behavioral rehearsal, and additional practice.
Similarly, Walker, Colvin, and Ramsey (1995) recommended a nine step direct instructional procedure, the ACCEPTS instructional sequence. The steps include:
1. Definition of the skill with guided discussion of examples,
2. Modeling or video presentation of the skill being correctly applied,
3. Modeling or video presentation of incorrect application (non example),
4. Review,
5. Modeling or video presentation of a second example with debriefing,
6. Modeling a range of examples, coupled with hypothetical practice situations,
7. Modeling or video presentation of another positive example if needed,
8. Role playing, and
9. Informal commitment from student to try the skill in a natural setting.
Intervention for skill-based deficits should focus on direct instruction of the skill.
Effective instructional methods include demonstration/modeling with guided practice and feedback.
Performance-based deficits
A performance-based deficit exists when the student possesses a skill but doesn't perform it under the desired circumstances. This may occur if there is a problem with either motivation or with ability to discriminate as to when to exhibit the appropriate behavior.
Motivational deficit
When a motivational deficit exists, the student possesses the appropriate skill, but doesn't desire to perform it. A motivational deficit may be hypothesized if observations reveal that the student has acquired the desired skill, but motivational conditions are not sufficiently strong to elicit it.
In situations such as this, behavioral interventions are effective.
Discrimination deficit
A student with a discrimination deficit has the desired skill in his or her repertoire, is motivated to behave properly, but can't discriminate, (i.e., doesn't know when to exhibit the desired behavior). A discrimination deficit may be confirmed if the student frequently performs the desired behavior, but fails to perform it under specific conditions. This may be due to an inability to glean relevant information from social situations. When a discrimination deficit exists, the student possesses the desired behavior but may not be sure as to when, where, and how much to engage in that behavior.
A deficit in social cognition may be apparent in a student who is oblivious to social cues or who lacks understanding of the social demands of a situation (Bryan, 1994).
According to Smith and Rivera (1993), "educators must help students learn to discriminate among the behavioral options in each school situation and match that situation with the proper behavior pattern".
Some social skill problems occur simply because students do not understand how to read environmental cues that indicate whether or not a behavior is acceptable. In short, when there is a discrimination deficit, we must help the student size up the social situation and determine what to do. If the student cannot discriminate, we must teach what is acceptable in a given circumstance.
Lavoie (1994) introduced a problem solving approach to teaching discrimination called the social autopsy. A social autopsy is the examination or inspection of a social error in order to determine why it occurred and how to prevent it from occurring in the future. When a student makes an academic error, we provide the right answer and use the mistake as an opportunity to learn. I n other words, we teach the student how to "fix" the mistake. Similarly, Lavoie (1994) suggested that instead of punishing the student for making a social mistake, we should analyze it and use it as an opportunity to learn . The process involves asking the student, "What do you think you did wrong? What was your mistake?" By actively involving the student in discussion and analysis of the error, a lesson can be extracted from the situation which enables the student to see the cause effect relationship between his or her behavior and the consequences or reactions of others.
Underlying the social autopsy are the following principles:
Teach all adults who have regular contact with the student to perform social autopsies. This includes family members, custodial staff, cafeteria workers, bus drivers, teachers, secretaries, and administrators. This will foster generalization by ensuring that the student participates in dozens of autopsies daily.
Conduct social autopsies immediately after the error occurs. This will provide a direct and instantaneous opportunity to demonstrate the cause and effect of social behaviors.
Use social autopsies to analyze socially correct behaviors as well as errors. This will provide reinforcement which may assist the student in repeating the appropriate behavior in another setting.
Help students identify and classify their own feelings or emotions.
There are several advantages of this method: (a) It uses the sound learning principles of immediate feedback, drill and practice, and positive reinforcement; (b) It is constructive and supportive rather than negative or punishing; (c) It provides an opportunity for the active involvement of the student, rather than an adult controlled intervention; and (d) It generally involves one-on-one assistance to the student.
To summarize, limited awareness of the conventions of behavior and inability to decode the hidden curriculum and social cues contribute to deficits in discrimination of social skills. Interventions for students with these problems should be geared toward helping the student analyze the components of social situations so that discrimination can occur.
Conclusion
In conclusion, remediation must be directly related to the type of social skill deficit. If the student has a skill-based deficit, the appropriate intervention strategy is to teach the deficient skill. If motivation is a problem, behavioral interventions are appropriate. If the student has difficulty discriminating what is the acceptable behavior for a given circumstance, we must provide the information needed so that discrimination is possible and assist the student in analyzing positive social behaviors as well as social errors. Interfering behaviors must also be considered. Educators and parents can do much to alleviate social skills problems by discerning whether social skills deficits are skill based or performance based and designing interventions accordingly.
-----
This article prepared in the context of learning disabilities has applications in managerial skills training and soft skills training.
http://www.ldonline.org/article/6165
Behavior Management: Getting to the Bottom of Social Skills Deficits
By: Judith Osgood Smith (1995)
One of the most puzzling and frustrating problems encountered by parents and teachers of students with learning disabilities (LD) is not the student who obviously acts out or engages in overtly antisocial behaviors, but rather the one who simply fails to perform the appropriate behavior for a given circumstance or setting. This problem is frequently labeled a social skill deficit (Gresham & Elliott, 1989).
Students with LD may exhibit social skill deficits that are either skill-based or performance-based.
In other words, either the skill may not be in the student's repertoire or the student may have acquired the skill but it is not performed at an acceptable level.
Effective intervention requires identification and remediation of the specific type of deficit exhibited by the student.
Skill-based deficits
A skill-based deficit exists when a student has not learned how to perform a given behavior.
For example, a student who has not learned to do long division could be said to have a long division skill deficit. Similarly, a student who hasn't mastered the skill of greeting others appropriately may have a skill deficit in that area.
A critical issue is whether the student actually possesses the desired skill. If not, it is unreasonable to demand that it occur or scold the student if it doesn't.
We may determine if a student has a skill deficit by observing whether the desired skill has ever been performed. If not, one may hypothesize that the skill is not in the student's repertoire. This may be tested further by providing strong incentives to perform the desired behavior. If the student fails to perform under these conditions, it is likely that the problem stems from a skill deficiency.
Don't scold or reprimand the student for having a skill based deficit; instead, teach the skill.
Teaching social skills
Generally, a skill-based deficit is due to lack of opportunity to learn or limited models of appropriate behavior (Gresham & Elliott, 1989).
In these instances, direct instruction, or skill training, is necessary.
The same principles apply to teaching social skills as to academic skills: provide ample demonstration/modeling, guided practice with feedback, and independent practice.
Hazel, Schumaker, Sherman, and SheldonWildgen (1981) listed eight fundamental social skills which can be taught through direct instruction:
Giving positive feedback (e.g., thanking and giving compliments),
Giving negative feedback (e.g., giving criticism or correction),
Accepting negative feedback without hostility or inappropriate reactions,
Resisting peer pressure to participate in delinquent behavior,
Solving personal problems,
Negotiating mutually acceptable solutions to problems,
Following instructions, and
Initiating and maintaining a conversation.
They recommended teaching these skills by providing definitions, illustrations with examples, modeling, verbal rehearsal, behavioral rehearsal, and additional practice.
Similarly, Walker, Colvin, and Ramsey (1995) recommended a nine step direct instructional procedure, the ACCEPTS instructional sequence. The steps include:
1. Definition of the skill with guided discussion of examples,
2. Modeling or video presentation of the skill being correctly applied,
3. Modeling or video presentation of incorrect application (non example),
4. Review,
5. Modeling or video presentation of a second example with debriefing,
6. Modeling a range of examples, coupled with hypothetical practice situations,
7. Modeling or video presentation of another positive example if needed,
8. Role playing, and
9. Informal commitment from student to try the skill in a natural setting.
Intervention for skill-based deficits should focus on direct instruction of the skill.
Effective instructional methods include demonstration/modeling with guided practice and feedback.
Performance-based deficits
A performance-based deficit exists when the student possesses a skill but doesn't perform it under the desired circumstances. This may occur if there is a problem with either motivation or with ability to discriminate as to when to exhibit the appropriate behavior.
Motivational deficit
When a motivational deficit exists, the student possesses the appropriate skill, but doesn't desire to perform it. A motivational deficit may be hypothesized if observations reveal that the student has acquired the desired skill, but motivational conditions are not sufficiently strong to elicit it.
In situations such as this, behavioral interventions are effective.
Discrimination deficit
A student with a discrimination deficit has the desired skill in his or her repertoire, is motivated to behave properly, but can't discriminate, (i.e., doesn't know when to exhibit the desired behavior). A discrimination deficit may be confirmed if the student frequently performs the desired behavior, but fails to perform it under specific conditions. This may be due to an inability to glean relevant information from social situations. When a discrimination deficit exists, the student possesses the desired behavior but may not be sure as to when, where, and how much to engage in that behavior.
A deficit in social cognition may be apparent in a student who is oblivious to social cues or who lacks understanding of the social demands of a situation (Bryan, 1994).
According to Smith and Rivera (1993), "educators must help students learn to discriminate among the behavioral options in each school situation and match that situation with the proper behavior pattern".
Some social skill problems occur simply because students do not understand how to read environmental cues that indicate whether or not a behavior is acceptable. In short, when there is a discrimination deficit, we must help the student size up the social situation and determine what to do. If the student cannot discriminate, we must teach what is acceptable in a given circumstance.
Lavoie (1994) introduced a problem solving approach to teaching discrimination called the social autopsy. A social autopsy is the examination or inspection of a social error in order to determine why it occurred and how to prevent it from occurring in the future. When a student makes an academic error, we provide the right answer and use the mistake as an opportunity to learn. I n other words, we teach the student how to "fix" the mistake. Similarly, Lavoie (1994) suggested that instead of punishing the student for making a social mistake, we should analyze it and use it as an opportunity to learn . The process involves asking the student, "What do you think you did wrong? What was your mistake?" By actively involving the student in discussion and analysis of the error, a lesson can be extracted from the situation which enables the student to see the cause effect relationship between his or her behavior and the consequences or reactions of others.
Underlying the social autopsy are the following principles:
Teach all adults who have regular contact with the student to perform social autopsies. This includes family members, custodial staff, cafeteria workers, bus drivers, teachers, secretaries, and administrators. This will foster generalization by ensuring that the student participates in dozens of autopsies daily.
Conduct social autopsies immediately after the error occurs. This will provide a direct and instantaneous opportunity to demonstrate the cause and effect of social behaviors.
Use social autopsies to analyze socially correct behaviors as well as errors. This will provide reinforcement which may assist the student in repeating the appropriate behavior in another setting.
Help students identify and classify their own feelings or emotions.
There are several advantages of this method: (a) It uses the sound learning principles of immediate feedback, drill and practice, and positive reinforcement; (b) It is constructive and supportive rather than negative or punishing; (c) It provides an opportunity for the active involvement of the student, rather than an adult controlled intervention; and (d) It generally involves one-on-one assistance to the student.
To summarize, limited awareness of the conventions of behavior and inability to decode the hidden curriculum and social cues contribute to deficits in discrimination of social skills. Interventions for students with these problems should be geared toward helping the student analyze the components of social situations so that discrimination can occur.
Conclusion
In conclusion, remediation must be directly related to the type of social skill deficit. If the student has a skill-based deficit, the appropriate intervention strategy is to teach the deficient skill. If motivation is a problem, behavioral interventions are appropriate. If the student has difficulty discriminating what is the acceptable behavior for a given circumstance, we must provide the information needed so that discrimination is possible and assist the student in analyzing positive social behaviors as well as social errors. Interfering behaviors must also be considered. Educators and parents can do much to alleviate social skills problems by discerning whether social skills deficits are skill based or performance based and designing interventions accordingly.
-----
This article prepared in the context of learning disabilities has applications in managerial skills training and soft skills training.
http://www.ldonline.org/article/6165
Thursday, February 7, 2008
Lehman Brothers Spinoff 1994
American Express announced in January 1994 that Lehman Brothers would be spun off. According to the announcement, the spinoff is expected to be completed in May or June,at which time Lehman will become independent, with its employees owning about 10 percent of Lehman's stock after investing $160 million.
Lehman Brothers, a specialist in corporate finance and trading, has been a leading underwriter on Wall Street, gaining considerable business in recent years. It has been owned by American Express since 1984.
Over the last two years, American Express has retreated from the Wall Street securities business to concentrate on its charge-card, travel and financial planning operations.
In 1992, American Express sold the Boston Company, a money manager and specialist in mutual-fund record keeping. In March 1993, American Express sold its Shearson retail brokerage operation to the Primerica Corporation, which owned Smith Barney, Harris Upham & Company, for $1 billion and a share of future profits.
American Express said it would buy $890 million of newly issued common stock in Lehman, then pass that stock to American Express shareholders as a special dividend. It will invest another $200 million in Lehman preferred shares, which it will hold as an investment. It will have no representation on the Lehman board.
In exchange for the capital infusion, American Express anticipates recouping more than $400 million in cash from the deal. It will receive 50 percent of any Lehman net income exceeding $400 million over eight years, with a limit of $50 million a year. It will also receive up to $50 million annually for three years from revenue and earnings-related participations due Lehman from Travelers as part of the Shearson deal last year.
The capital infusion would bring Lehman's equity base to $3.3 billion.
"Our objective has been to bring Lehman Brothers to the point where it could sustain a stand-alone 'A' credit rating based on its earnings, capital structure and management strength," Mr. Golub, Chairman and CEO of American Express said.
With the planned equity fusion, American Express has been assured by the major rating companies that Lehman will receive its A.
The American Express Company had completed the spinoff of its Lehman Brothers brokerage unit to shareholders by 31st May. The travel and financial services company had distributed its 98.2 million common shares in Lehman Brothers through a tax-free dividend to shareholders. American Express stockholders of record on May 20 received one Lehman share for every five of their shares. Lehman stock, which has been trading on the New York Stock Exchange on a when-issued basis since May 2. It closed on 31st May at $18.
Sources:
http://query.nytimes.com/gst/fullpage.html?res=9C00E4D91130F936A15752C0A962958260
http://query.nytimes.com/gst/fullpage.html?res=9402E6D7103BF932A35755C0A962958260
Lehman Brothers, a specialist in corporate finance and trading, has been a leading underwriter on Wall Street, gaining considerable business in recent years. It has been owned by American Express since 1984.
Over the last two years, American Express has retreated from the Wall Street securities business to concentrate on its charge-card, travel and financial planning operations.
In 1992, American Express sold the Boston Company, a money manager and specialist in mutual-fund record keeping. In March 1993, American Express sold its Shearson retail brokerage operation to the Primerica Corporation, which owned Smith Barney, Harris Upham & Company, for $1 billion and a share of future profits.
American Express said it would buy $890 million of newly issued common stock in Lehman, then pass that stock to American Express shareholders as a special dividend. It will invest another $200 million in Lehman preferred shares, which it will hold as an investment. It will have no representation on the Lehman board.
In exchange for the capital infusion, American Express anticipates recouping more than $400 million in cash from the deal. It will receive 50 percent of any Lehman net income exceeding $400 million over eight years, with a limit of $50 million a year. It will also receive up to $50 million annually for three years from revenue and earnings-related participations due Lehman from Travelers as part of the Shearson deal last year.
The capital infusion would bring Lehman's equity base to $3.3 billion.
"Our objective has been to bring Lehman Brothers to the point where it could sustain a stand-alone 'A' credit rating based on its earnings, capital structure and management strength," Mr. Golub, Chairman and CEO of American Express said.
With the planned equity fusion, American Express has been assured by the major rating companies that Lehman will receive its A.
The American Express Company had completed the spinoff of its Lehman Brothers brokerage unit to shareholders by 31st May. The travel and financial services company had distributed its 98.2 million common shares in Lehman Brothers through a tax-free dividend to shareholders. American Express stockholders of record on May 20 received one Lehman share for every five of their shares. Lehman stock, which has been trading on the New York Stock Exchange on a when-issued basis since May 2. It closed on 31st May at $18.
Sources:
http://query.nytimes.com/gst/fullpage.html?res=9C00E4D91130F936A15752C0A962958260
http://query.nytimes.com/gst/fullpage.html?res=9402E6D7103BF932A35755C0A962958260
Lehman Brothers - Strategy - 1997
Lehman's story since its spinoff in May 1994 is a lesson in the difficulties of rebuilding a weakened investment bank, even in the strongest bull market in history.
Wall Street is in the throes of a round of consolidation. It is mating season in the brokerage business. Commercial banks, reacting to a loosening of Federal Reserve rules that had limited their securities businesses, are rushing to get into the booming securities markets.
Dean Witter, Discover has merged with Morgan Stanley, Bankers Trust New York is buying Alex. Brown, and Swiss Bank said last month that it would acquire Dillon, Read. Oppenheimer and Montgomery Securities are practically advertising for partners.
While some analysts feel Lehman is also looking for an acquirer, Richard S. Fuld, Lehman's 51-year-old chairman and chief executive, says no such thing is going on. ''We are building a strong independent investment bank.'' ''We are certainly not looking to be bought.''
Under Mr. Fuld, Lehman has sought to bolster its equity, banking and high-yield bond businesses while maintaining and extending its established franchise in the world's bond markets. It is also gathering a new fund of at least $1.5 billion to invest in merchant banking ventures. Two years before, most of its experts in that business left to set up Cypress Partners, an independent buyout firm.
Lehman had historically had the lowest profit margins of all the big firms in New York. They are now trying to get more profit out of the company.
Lehman has certainly made big strides since it regained its independence, raising its return on equity to close to 14 percent for the last year and nearly 16 percent in the quarter ended Feb. 28, 2007, from as low as 3 percent just after it parted ways with American Express. It has also clambered up the industry rankings in some securities markets.
The firm has been able to cut costs. Some of the credit for that goes to Fuld.
But Lehman still lags behind many big competitors in profitability. It is still struggling to recreate franchises that ebbed away after a famous and painful struggle in the early 1980's between its traders, led by Lewis L. Glucksman, and its investment bankers, led by Peter G. Peterson. The struggle is described in detail by Ken Auletta in his 1986 best seller, ''Greed and Glory on Wall Street: The Fall of the House of Lehman'' (Warner publications). In the struggle, the traders triumphed, but Mr. Peterson and other bankers left. The banking franchise became weak. The firm, to insure its survival, had to stagger into a 1984 merger with Shearson-American Express.
Mr. Fuld and his closest partner T. Christopher Pettit (both were proteges of Mr. Glucksman in Lehman's commercial paper department) led the firm back to independence in 1994.
But there were growing tensions between them over the daily running of the firm. Mr. Fuld, wanted to delegate to a larger operating committee made up of several managing directors. He felt that it was important to broaden the ranks of top management and to draw in a younger generation of leaders. Mr. Pettit, the president and chief operating officer, wanted to continue running the firm with a loyal coterie.
In April 1996, Mr. Pettit stepped down from his posts, as Lehman promoted some of its younger tyros, and left the firm altogether last November. He died in February 2007 in a snowmobile accident.
In the present set up, there is no chief operating officer at Lehman, and Mr. Pettit's former duties have been taken over by an enlarged operating committee and to some extent by John L. Cecil, the chief administrative officer and cost-cutter. The firm is struggling to push up profits by building new and existing businesses as well as by controlling costs and making big bets.
Pure investment banks are increasingly going in one of two directions. Some are striving to combine a nationwide retail broking operation with investment banking business in the mold of Merrill Lynch, as Morgan Stanley and Dean Witter are doing. Some others are joining big commercial banks selling out. Alex. Brown and Dillon, Read are following that mode.
Lehman tried the Merrill Lynch route in its marriage to Shearson and its American Express parent, and Mr. Fuld and his colleagues vehemently deny any interest in repeating that experience. The different management styles of the Shearson, Lehman and American Express components did not work well together, and the combined firm never succeeded in generating the expected synergies and profits.
Mr. Fuld adamantly maintains that there is still a place for the independent investment bank serving institutional clients around the globe. As an independent entity focused on institutional customers, he said, Lehman can be more agile and stay better focused on its customers' needs and its chosen businesses and markets.
Lehman is using the bull market to restore its advisory and equity capital-raising businesses. Lehman executives say there have already been some successes. Marc L. Paley, who helps to manage Lehman's stock underwriting business, reels off such recent coups as the $963 million issue for Unibanco, a $660 million issue for Qualcomm and issues of $150 million for Prentiss Properties Trust and $200 million for Premier Parks as examples of fruits of efforts in a much tough market.
Among other efforts, Lehman has broadened its high-yield bond business and its ability to finance acquisitions, seeking to make sure that it catered to more of its clients' needs. The broadening is to provide one-stop shopping. ''There are a number of clients who value one-stop shopping,'' said Robert D. Redmond, a managing director in the firm's high-yield and leveraged finance division.
Sallie L. Krawcheck, an analyst at Sanford Bernstein & Company, projects that in more ''normal'' markets, Lehman's return on equity would be close to 10 percent, rather than the 16 percent of the most recent quarter and they still have to put in more efforts to improve their profitability in line with the industry leaders.
Source:
http://query.nytimes.com/gst/fullpage.html?res=9801E3D6153DF930A35755C0A961958260&sec=&spon=&pagewanted=all
While It's Merger Season on Wall St., Some Question the Firm's Intentions
New York Times, June 3, 1997
For more about Richard Fuld, Current CEO of Lehman
http://nrao-mgmt-smi-handbook.blogspot.com/2008/02/richard-s-fuld-ceo-lehman-brothers-2008.html
For post about recent strategy at Lehman
http://nrao-mgmt-smi-handbook.blogspot.com/2008/02/lehman-brothers-strategy.html
Wall Street is in the throes of a round of consolidation. It is mating season in the brokerage business. Commercial banks, reacting to a loosening of Federal Reserve rules that had limited their securities businesses, are rushing to get into the booming securities markets.
Dean Witter, Discover has merged with Morgan Stanley, Bankers Trust New York is buying Alex. Brown, and Swiss Bank said last month that it would acquire Dillon, Read. Oppenheimer and Montgomery Securities are practically advertising for partners.
While some analysts feel Lehman is also looking for an acquirer, Richard S. Fuld, Lehman's 51-year-old chairman and chief executive, says no such thing is going on. ''We are building a strong independent investment bank.'' ''We are certainly not looking to be bought.''
Under Mr. Fuld, Lehman has sought to bolster its equity, banking and high-yield bond businesses while maintaining and extending its established franchise in the world's bond markets. It is also gathering a new fund of at least $1.5 billion to invest in merchant banking ventures. Two years before, most of its experts in that business left to set up Cypress Partners, an independent buyout firm.
Lehman had historically had the lowest profit margins of all the big firms in New York. They are now trying to get more profit out of the company.
Lehman has certainly made big strides since it regained its independence, raising its return on equity to close to 14 percent for the last year and nearly 16 percent in the quarter ended Feb. 28, 2007, from as low as 3 percent just after it parted ways with American Express. It has also clambered up the industry rankings in some securities markets.
The firm has been able to cut costs. Some of the credit for that goes to Fuld.
But Lehman still lags behind many big competitors in profitability. It is still struggling to recreate franchises that ebbed away after a famous and painful struggle in the early 1980's between its traders, led by Lewis L. Glucksman, and its investment bankers, led by Peter G. Peterson. The struggle is described in detail by Ken Auletta in his 1986 best seller, ''Greed and Glory on Wall Street: The Fall of the House of Lehman'' (Warner publications). In the struggle, the traders triumphed, but Mr. Peterson and other bankers left. The banking franchise became weak. The firm, to insure its survival, had to stagger into a 1984 merger with Shearson-American Express.
Mr. Fuld and his closest partner T. Christopher Pettit (both were proteges of Mr. Glucksman in Lehman's commercial paper department) led the firm back to independence in 1994.
But there were growing tensions between them over the daily running of the firm. Mr. Fuld, wanted to delegate to a larger operating committee made up of several managing directors. He felt that it was important to broaden the ranks of top management and to draw in a younger generation of leaders. Mr. Pettit, the president and chief operating officer, wanted to continue running the firm with a loyal coterie.
In April 1996, Mr. Pettit stepped down from his posts, as Lehman promoted some of its younger tyros, and left the firm altogether last November. He died in February 2007 in a snowmobile accident.
In the present set up, there is no chief operating officer at Lehman, and Mr. Pettit's former duties have been taken over by an enlarged operating committee and to some extent by John L. Cecil, the chief administrative officer and cost-cutter. The firm is struggling to push up profits by building new and existing businesses as well as by controlling costs and making big bets.
Pure investment banks are increasingly going in one of two directions. Some are striving to combine a nationwide retail broking operation with investment banking business in the mold of Merrill Lynch, as Morgan Stanley and Dean Witter are doing. Some others are joining big commercial banks selling out. Alex. Brown and Dillon, Read are following that mode.
Lehman tried the Merrill Lynch route in its marriage to Shearson and its American Express parent, and Mr. Fuld and his colleagues vehemently deny any interest in repeating that experience. The different management styles of the Shearson, Lehman and American Express components did not work well together, and the combined firm never succeeded in generating the expected synergies and profits.
Mr. Fuld adamantly maintains that there is still a place for the independent investment bank serving institutional clients around the globe. As an independent entity focused on institutional customers, he said, Lehman can be more agile and stay better focused on its customers' needs and its chosen businesses and markets.
Lehman is using the bull market to restore its advisory and equity capital-raising businesses. Lehman executives say there have already been some successes. Marc L. Paley, who helps to manage Lehman's stock underwriting business, reels off such recent coups as the $963 million issue for Unibanco, a $660 million issue for Qualcomm and issues of $150 million for Prentiss Properties Trust and $200 million for Premier Parks as examples of fruits of efforts in a much tough market.
Among other efforts, Lehman has broadened its high-yield bond business and its ability to finance acquisitions, seeking to make sure that it catered to more of its clients' needs. The broadening is to provide one-stop shopping. ''There are a number of clients who value one-stop shopping,'' said Robert D. Redmond, a managing director in the firm's high-yield and leveraged finance division.
Sallie L. Krawcheck, an analyst at Sanford Bernstein & Company, projects that in more ''normal'' markets, Lehman's return on equity would be close to 10 percent, rather than the 16 percent of the most recent quarter and they still have to put in more efforts to improve their profitability in line with the industry leaders.
Source:
http://query.nytimes.com/gst/fullpage.html?res=9801E3D6153DF930A35755C0A961958260&sec=&spon=&pagewanted=all
While It's Merger Season on Wall St., Some Question the Firm's Intentions
New York Times, June 3, 1997
For more about Richard Fuld, Current CEO of Lehman
http://nrao-mgmt-smi-handbook.blogspot.com/2008/02/richard-s-fuld-ceo-lehman-brothers-2008.html
For post about recent strategy at Lehman
http://nrao-mgmt-smi-handbook.blogspot.com/2008/02/lehman-brothers-strategy.html
China's state investment company to invest $5 bln in Morgan Stanley
China's state forex investment company to invest $5 bln in Morgan Stanley
December 2007
China Investment Corp. (CIC), the nation's state-owned forex investment firm, said that it has agreed to invest 5 billion U.S. dollars in the No. 2 U.S. investment bank Morgan Stanley.
It will purchase equity units that are mandatorily convertible into 9.9 percent of Morgan Stanley common shares.
The equity units carry a fixed annual interest rate of nine percent before conversion on Aug. 17, 2010.
Morgan Stanley reported a larger-than-expected loss in the fourth fiscal quarter due to a 9.4-billion-U.S. dollar write down from its exposure to subprime and other mortgage-related investments.
It lost 3.61 billion U.S. dollars in the fourth quarter, compared to a profit of 2.27 billion U.S. dollars in the same period a year earlier.
"CIC believes that Morgan Stanley has potential for long-term growth, particularly in its investment banking, asset management and wealth management businesses, as well as new business development opportunities in emerging markets," said the statement.
China Investment Corp. was set up in September this year, with an initial capital of 200 billion U.S. dollars from the country's massive foreign exchange reserves.
One-third of the capital would be used to purchase Huijin Investment Co. an investment arm of the Chinese government, and another third would be injected into state-owned banks for shareholding reforms, CIC chairman Lou Jiwei said.
The remaining 70 billion U.S. dollars was earmarked for overseas investment in a wide range of portfolios but would not seek control, he said.
Earlier this month, CIC made its second investment this year of about 100 million U.S. dollars in the initial public offering of the China Railway Group in Hong Kong.Its first investment is 3 billion U.S. dollars in Blackstone group public offering.
http://news.xinhuanet.com/english/2007-12/19/content_7281666.htm
December 2007
China Investment Corp. (CIC), the nation's state-owned forex investment firm, said that it has agreed to invest 5 billion U.S. dollars in the No. 2 U.S. investment bank Morgan Stanley.
It will purchase equity units that are mandatorily convertible into 9.9 percent of Morgan Stanley common shares.
The equity units carry a fixed annual interest rate of nine percent before conversion on Aug. 17, 2010.
Morgan Stanley reported a larger-than-expected loss in the fourth fiscal quarter due to a 9.4-billion-U.S. dollar write down from its exposure to subprime and other mortgage-related investments.
It lost 3.61 billion U.S. dollars in the fourth quarter, compared to a profit of 2.27 billion U.S. dollars in the same period a year earlier.
"CIC believes that Morgan Stanley has potential for long-term growth, particularly in its investment banking, asset management and wealth management businesses, as well as new business development opportunities in emerging markets," said the statement.
China Investment Corp. was set up in September this year, with an initial capital of 200 billion U.S. dollars from the country's massive foreign exchange reserves.
One-third of the capital would be used to purchase Huijin Investment Co. an investment arm of the Chinese government, and another third would be injected into state-owned banks for shareholding reforms, CIC chairman Lou Jiwei said.
The remaining 70 billion U.S. dollars was earmarked for overseas investment in a wide range of portfolios but would not seek control, he said.
Earlier this month, CIC made its second investment this year of about 100 million U.S. dollars in the initial public offering of the China Railway Group in Hong Kong.Its first investment is 3 billion U.S. dollars in Blackstone group public offering.
http://news.xinhuanet.com/english/2007-12/19/content_7281666.htm
Wednesday, February 6, 2008
Investment Bank Rankings - 2007
Based on data up to Nov 28 2007
Global M & A Adviser Rankings
1. Goldman Sachs
2. Morgan Stanley
3. Citi
4. J P Morgan
5. UBS
6 Credit Suisse
7. Merrill Lynch
8. Deutsche Bank
9. Lehman Brothers
10. Rothschild
US M& A Adviser Rankings
1. Goldman Sachs
2. Morgan sStanley
3. Citi
4. J P Morgan
5. Lehman Brothers
6 Merrill Lynch
7. Credit Suisse
8. Deutsche Bank
9. UBS
10.Bank of America
http://blogs.wsj.com/deals/category/investment-banks/league-tables/
Global M & A Adviser Rankings
1. Goldman Sachs
2. Morgan Stanley
3. Citi
4. J P Morgan
5. UBS
6 Credit Suisse
7. Merrill Lynch
8. Deutsche Bank
9. Lehman Brothers
10. Rothschild
US M& A Adviser Rankings
1. Goldman Sachs
2. Morgan sStanley
3. Citi
4. J P Morgan
5. Lehman Brothers
6 Merrill Lynch
7. Credit Suisse
8. Deutsche Bank
9. UBS
10.Bank of America
http://blogs.wsj.com/deals/category/investment-banks/league-tables/
Investment Banking Revenues in 2007
Investment-banking revenue generated in North America, the world’s biggest capital market, rose 8% to $39.8 billion last year from $36.7 billion a year earlier, while European revenue rose just 5% to $30.6 billion, according to Dealogic.
In Europe the U.K. remains the region’s biggest fee pool, though investment-banking revenue fell 2% to $6.6 billion.
Italy experienced the fastest growth, jumping by a fifth to $2.2 billion.
Revenue in France rose 5% and German fees increased 4%.
The biggest fall was in Spain, where investment banking revenue dropped 8% from 2006.
U.S. investment-banking revenue accounted for 46% of the $86.4 billion global fee pool, with Europe contributing 35%.
The Middle East and Africa recorded a 64% rise in investment banking fees to $2.2 billion, growth surpassed only by Latin America, where fees surged 88% to $2.4 billion.
Investment bankers have predicted faster rates of revenue growth in their operations in Europe, Middle East and Africa and have made those regions a priority for 2008.
Wall Street firms have given more autonomy to their European operations and some have shifted the management of global operations to London.
Citigroup’s global fixed-income division is managed from London, as is the world-wide mergers-and-acquisitions operation of Morgan Stanley, which topped the European deal rankings.
In Europe the U.K. remains the region’s biggest fee pool, though investment-banking revenue fell 2% to $6.6 billion.
Italy experienced the fastest growth, jumping by a fifth to $2.2 billion.
Revenue in France rose 5% and German fees increased 4%.
The biggest fall was in Spain, where investment banking revenue dropped 8% from 2006.
U.S. investment-banking revenue accounted for 46% of the $86.4 billion global fee pool, with Europe contributing 35%.
The Middle East and Africa recorded a 64% rise in investment banking fees to $2.2 billion, growth surpassed only by Latin America, where fees surged 88% to $2.4 billion.
Investment bankers have predicted faster rates of revenue growth in their operations in Europe, Middle East and Africa and have made those regions a priority for 2008.
Wall Street firms have given more autonomy to their European operations and some have shifted the management of global operations to London.
Citigroup’s global fixed-income division is managed from London, as is the world-wide mergers-and-acquisitions operation of Morgan Stanley, which topped the European deal rankings.
Vault Ranks for Banks for Jobs
2008
RANK -- Company ------------ Score
1 Goldman Sachs & Company 8.981
2 The Blackstone Group 8.415
3 Morgan Stanley 8.146
4 Lehman Brothers 7.934
5 JPMorgan Investment Bank
6 Merrill Lynch 7.486
7 Citi Markets & Banking 7.225
8 Lazard 7.166
9 Credit Suisse Investment Banking Division 7.110
10 UBS Investment Bank 7.097
11 JPMorgan Chase - Commercial Bank 6.948
12 Deutsche Bank 6.854
13 Bear Stearns & Co. 6.798
14 Citigroup Inc. (Citi) 6.777
15 Bank of America 6.258
16 Greenhill & Co. 6.105
17 Barclays Capital 5.989
18 Wachovia Corporation 5.733
19 Rothschild 5.429
20 HSBC 5.398
21 Houlihan Lokey 5.326
22 Jefferies 5.244
23 Perella Weinberg Partners 5.206
24 Wells Fargo 5.141
25 Royal Bank of Scotland 5.060
RANK -- Company ------------ Score
1 Goldman Sachs & Company 8.981
2 The Blackstone Group 8.415
3 Morgan Stanley 8.146
4 Lehman Brothers 7.934
5 JPMorgan Investment Bank
6 Merrill Lynch 7.486
7 Citi Markets & Banking 7.225
8 Lazard 7.166
9 Credit Suisse Investment Banking Division 7.110
10 UBS Investment Bank 7.097
11 JPMorgan Chase - Commercial Bank 6.948
12 Deutsche Bank 6.854
13 Bear Stearns & Co. 6.798
14 Citigroup Inc. (Citi) 6.777
15 Bank of America 6.258
16 Greenhill & Co. 6.105
17 Barclays Capital 5.989
18 Wachovia Corporation 5.733
19 Rothschild 5.429
20 HSBC 5.398
21 Houlihan Lokey 5.326
22 Jefferies 5.244
23 Perella Weinberg Partners 5.206
24 Wells Fargo 5.141
25 Royal Bank of Scotland 5.060
Richard S Fuld CEO Lehman Brothers 2008
Richard S. Fuld Jr
Chairman and chief executive officer, Lehman Brothers Holdings
Nationality: American.
Born: April 26, 1946, in New York City, New York (Reference for Business).
Education: University of Colorado, BA, 1969; New York University Stern School of Business, MBA, 1973.
Family: Son of Richard Severin Fuld and Elizabeth Schwab; married Kathleen Ann Bailey; children: three.
Career: Lehman Brothers, 1969–1984, managing director; Shearson Lehman Brothers, 1984–1990, vice chairman; Lehman Brothers, 1990–1993, president and co-CEO; 1993, copresident and co-COO; 1993–1994, president and COO; Lehman Brothers Holdings, 1993–1994, CEO; 1994–, chairman and CEO.
Richard Fuld joined Lehman in 1969 as a commercial-paper trader and earned his reputation running the firm's fixed-income business. In the early 1980s at the age of 37 Fuld became the supervisor of both the fixed-income and the equities divisions, overseeing all trading at Lehman. Fuld had met with great success as a trader.
when he was given managerial responsibilities, Fuld had 22 managers reporting to him in divisions that accounted for two-thirds of the company's profits. Fuld excelled, and in 1982 his divisions generated record profits.
Fuld, who earned his MBA from New York University at night, was considered by many in the industry as one of Wall Street's supreme traders. One Lehman partner said of Fuld in Investment Dealers' Digest, "This is a very smart guy, tough as nails" (August 24, 1992). As reported by Fortune, a notorious temper earned Fuld, a weightlifter, the nickname "gorilla" (December 11, 1995).
After the 1990 operations split, Fuld became co-CEO of the Lehman Brothers division, sharing the title with J. Tomilson Hill.
The company finally reclaimed its independence in 1994—having been spun off from American Express 10 years after it was first acquired by the firm.
Fuld was named chairman in April 1994.
After regaining its independence, Lehman raised its return on equity to nearly 14 percent in 1996, from the low of 3 percent reached just after the firm was spun off from American Express.
Fuld changed the leadership in each of the company's three major operating units—investment banking, equities, and fixed income. He focused the company's investments in high-margin businesses like mergers and acquisitions and also equities by recruiting several expensive hires. In January 1997 Fuld approved $48 million for additional executive compensation—a full $46 million of that was earmarked for the investing, banking, and equities divisions, leaving just $2.4 million for the fixed-income division's recruits. His strategy was crystal clear: move Lehman away from its age-old reliance on fixed income.
Such a shift could not happen overnight and Fuld had to withstand pressure. In addressing analysts at a 1997 meeting Fuld said, "The process of building our high-margin businesses and shifting our overall business mix takes time. It starts with leadership at the top, then at the next level, then the talent needed to meet client needs and produce revenues. Once all that is in place, it takes time to get the resources to work together properly to build or expand relationships, and create revenues" (August 25, 1997).
In 2001, amid the global recession and stock-market collapse, Wall Street firms felt the economic pains most of all. Lehman at least outperformed the industry; Fuld's reward was a 2001 compensation package worth $105 million, making him the fourth-highest-paid chief executive in the United States. Most Wall Street chief executives—including those at Goldman Sachs, Morgan Stanley, and J. P. Morgan Chase—reduced their pay packages at the time.
Fuld was a long-term player and knew that better days were ahead. Lehman's rebound continued in the first few years of the millennium, as the firm earned a reputation for its stellar management through three primary accomplishments: First, the company kept employees' salaries in line with earnings, with the ratio of compensation costs to gross revenues hovering around 51 percent. Second, Lehman maintained a strong focus on U.S. government bonds, global fixed income, and credit derivatives at a time when the equities and investmentbanking markets were losing propositions. Finally, the firm retained its best managers by handing them substantial portions of stock in the firm. In 1994 employees owned 4 percent of Lehman; by 2004 they owned 35 percent. In 2001 the firm allocated $544 million for stock-based pay, accounting for 15.8 percent of its total compensation expenses, as compared with the 6.4 percent allocated for such purposes at Merrill Lynch. Fuld's message to new recruits: If you join us, we promise to make you rich—perhaps seriously rich. And he delivered on that promise—by 2002 the company was teeming with self-made millionaires.
In October 2003, Lehman Brothers seized on an opportunity to expand its business. In 2004 Lehman Brothers acquired Neuberger Berman in a deal valued at $2.63 billion.
For Fuld the Neuberger acquisition was the realization of a strategy he had been espousing since the mid-1990s: to diversify the company's business and lessen its reliance on the bondtrading market. The company expected the acquisition to increase its percentage of fee-based revenues from 13 percent to 21 percent. The move put Fuld's company on equal footing with Morgan Stanley, Merrill Lynch, and Goldman Sachs, all of which had significant money-management businesses. In Neuberger Berman, Lehman had obtained a firm with $63.7 billion under management, a well-regarded cadre of mutual funds, and a slice of the sought-after business of financialservices provision to high-net-worth clients.
In 2003 Daily Deal awarded Lehman Brothers the "Top 5 Global M&A Announcements of 2003 Deal of the Year" for its consultation with Travelers for the company's $16 billion merger agreement with St. Paul Companies. All told Lehman consulted on $99 billion worth of U.S. mergers and acquisitions in 2003, increasing its market share by 6.2 points to 18.9 percent, according to Thomson Financial. That gave the firm the lead in mergers and acquisitions in the industry, over Credit Suisse First Boston, Merrill Lynch, and J. P. Morgan Chase. Among major Wall Street firms, Lehman claimed fourth place in mergers and acquisitions overall, up from ninth in 2002. In 2003 the company raised $314 billion in debt and equity issues for clients, cementing its position as the number-two underwriter of securities in the United States—behind Citigroup—up from the number-four spot in 2002.
Lehman Brothers' success stories were largely a byproduct of Fuld's focus on offering a complete array of financial services, including advisement on corporate merging, raising capital, hedging risk, and making debt payments. Fuld's transformation showed foresight. As the economy picked up, bond insurance was expected to soften; Lehman's investmentbanking operations would be the counterbalance to the expected downturn in bonds. Blaine A. Frantz, the senior credit officer at Moody's Investors, told BusinessWeek, "It is a much more diversified shop than it was five or six years ago, and it operates in an extremely disciplined fashion" (January 19, 2004).
In January 2004 when Institutional Investor ranked Fuld first in its annual Best CEOs in America survey in the Brokers & Asset Managers category.
In overseas operations. The company was ranked fourth in European M&A work in 2002, with a market share of 19 percent, but it fell from number eight to number nine in the global rankings for announced mergers. As of early 2004 one of Fuld's goals was to improve the company's overseas market share, partly by appointing two top executives in Asia and Europe to the company's executive committee.
----------------
Fuld's Lecture at Harvard Business School (Reported date 16-10-2006)
In the speech he gave as part of Harvard Business School's Distinguished Speaker Series, Fuld described the five critical qualities he believes every leader must have (HBS, 2006).
"Real leaders earn the right to lead by understanding the business and mechanics of one's own organization," Fuld said, referring to his first quality of leadership. To Fuld, this means doing one's homework, connecting the dots and learning how the pieces fit together. "When you know what you are talking about, others will follow you," Fuld said.
A leader must also be committed to a strategy, and show that commitment. To this end, Fuld believes a leader must pick a strategy and stick with it. However, as he pointed out, if that strategy turns out to be wrong, a leader must have the guts to admit it and come out with a new strategy.
Fuld is quick to share the credit for such successes. The CEO's third quality of leadership, knowing how to leverage teamwork, is central to Lehman Brothers' culture and focuses on the belief that one person cannot deliver the whole Firm.
From the failures of Lehman Fuld realized that the firm suffers when teamwork suffers and as a result, when Fuld became chairman, nearly a decade later, the first thing he did was build the current "One Firm" culture, where teamwork is critical and goals are shared. To do so, he follows a very simple formula: hire great people who will work together, give them the tools and training they need to be successful, hold people accountable, pay them fairly, and expect them to think, act and behave like owners. Fuld backs this last step by paying all employees partly in Lehman Brothers stock, creating a culture of ownership.
Fuld believes so strongly in surrounding himself with the best people that he considers it another critical quality of leadership. According to Fuld, a leader cannot be afraid that he or she might look bad when others look good. "When you want an 'A' job done and when you want to run an 'A' firm, 'B' people are not good enough," said Fuld.
Fuld believes that leaders set the tone, which is why his fifth and final quality of leadership is to lead by example. Fuld said that in addition to his responsibility to the client and to the transaction, he has another responsibility-to teach others. He expects his senior people to do the same throughout the Firm, creating a culture of responsibility and driving results.
Fuld concluded by saying that the reward for a leader lies in others' achievements and that a true leader gets people to perform at a higher, more productive level, benefiting the whole organization.
--------------------
You can access the speech by Fuld at Leeds Business School in 2006 from the page
http://leeds.colorado.edu/about/interior4.aspx?id=542,585,316,417,2231
-----------------------
Richard S. Fuld, Jr. Named to Barron's "The World's Most Respected CEOs" List
26 March 2007
Chairman and Chief Executive Officer Richard S. Fuld, Jr. was named to Barron's "The World's Most Respected CEOs" list. Dick is one of 13 CEOs in the world who has been named to the list every year since its inception. (Lehman 2007)
In its March 26, 2007, issue, Barron's writes:
• "A Lehman Brothers lifer who joined the firm in 1969, Fuld brings passion and competitiveness that are powerful even by Street standards."
• "Since its spinoff in 1994, Fuld has made the bond specialist into a rival to Goldman Sachs and Morgan Stanley."
• "Lehman's stock is up 20-fold since '94. That's good news for employees, who own 30% of the company."
In compiling its third annual list of 30 top corporate leaders from around the world, Barron’s looked at financial and stock market performance, spoke to investors, and assessed leadership and industry stature.
---------------------------
Basic Sources:
Reference for Business, http://www.referenceforbusiness.com/biography/F-L/Fuld-Richard-S-Jr-1946.html
HBS 2006, http://media.www.harbus.org/media/storage/paper343/news/2006/10/16/News/Lehman.Brothers.Ceo.Shares.His.Qualities.Of.Leadership.At.Distinguished.Speaker-2372811.shtml
Lehman 2007, www.lehman.com/who/awards/2007/barrons_respected_ceo.htm
Other References
Auletta, Ken, Greed and Glory on Wall Street: The Fall of the House of Lehman, New York, N.Y.: Warner Books, 1987.
Cooper, Ron, "Can a Troika Take Lehman Up a Level?" Investment Dealers' Digest, August 24, 1992, p. 16.
Horowitz, Jed, "Does Lehman Finally Have It Right?" Investment Dealers' Digest, August 25, 1997, p. 16.
Kerr, Ian, "Fuld's Pay Sheds Light on Lehman," Financial News, March 25, 2002.
Thomas, Landon, Jr., "Lehman to Buy Neuberger Berman for $2.6 Billion," New York Times, July 23, 2003.
Thornton, Emily, "Lehman's New Street Smarts," BusinessWeek, January 19, 2004, p. 62.
Truell, Peter, "Is Lehman Ready to Take the Plunge?" New York Times, June 3, 1997.
Tully, Shawn, "Can Lehman Survive?" Fortune, December 11, 1995, p. 154.
Chairman and chief executive officer, Lehman Brothers Holdings
Nationality: American.
Born: April 26, 1946, in New York City, New York (Reference for Business).
Education: University of Colorado, BA, 1969; New York University Stern School of Business, MBA, 1973.
Family: Son of Richard Severin Fuld and Elizabeth Schwab; married Kathleen Ann Bailey; children: three.
Career: Lehman Brothers, 1969–1984, managing director; Shearson Lehman Brothers, 1984–1990, vice chairman; Lehman Brothers, 1990–1993, president and co-CEO; 1993, copresident and co-COO; 1993–1994, president and COO; Lehman Brothers Holdings, 1993–1994, CEO; 1994–, chairman and CEO.
Richard Fuld joined Lehman in 1969 as a commercial-paper trader and earned his reputation running the firm's fixed-income business. In the early 1980s at the age of 37 Fuld became the supervisor of both the fixed-income and the equities divisions, overseeing all trading at Lehman. Fuld had met with great success as a trader.
when he was given managerial responsibilities, Fuld had 22 managers reporting to him in divisions that accounted for two-thirds of the company's profits. Fuld excelled, and in 1982 his divisions generated record profits.
Fuld, who earned his MBA from New York University at night, was considered by many in the industry as one of Wall Street's supreme traders. One Lehman partner said of Fuld in Investment Dealers' Digest, "This is a very smart guy, tough as nails" (August 24, 1992). As reported by Fortune, a notorious temper earned Fuld, a weightlifter, the nickname "gorilla" (December 11, 1995).
After the 1990 operations split, Fuld became co-CEO of the Lehman Brothers division, sharing the title with J. Tomilson Hill.
The company finally reclaimed its independence in 1994—having been spun off from American Express 10 years after it was first acquired by the firm.
Fuld was named chairman in April 1994.
After regaining its independence, Lehman raised its return on equity to nearly 14 percent in 1996, from the low of 3 percent reached just after the firm was spun off from American Express.
Fuld changed the leadership in each of the company's three major operating units—investment banking, equities, and fixed income. He focused the company's investments in high-margin businesses like mergers and acquisitions and also equities by recruiting several expensive hires. In January 1997 Fuld approved $48 million for additional executive compensation—a full $46 million of that was earmarked for the investing, banking, and equities divisions, leaving just $2.4 million for the fixed-income division's recruits. His strategy was crystal clear: move Lehman away from its age-old reliance on fixed income.
Such a shift could not happen overnight and Fuld had to withstand pressure. In addressing analysts at a 1997 meeting Fuld said, "The process of building our high-margin businesses and shifting our overall business mix takes time. It starts with leadership at the top, then at the next level, then the talent needed to meet client needs and produce revenues. Once all that is in place, it takes time to get the resources to work together properly to build or expand relationships, and create revenues" (August 25, 1997).
In 2001, amid the global recession and stock-market collapse, Wall Street firms felt the economic pains most of all. Lehman at least outperformed the industry; Fuld's reward was a 2001 compensation package worth $105 million, making him the fourth-highest-paid chief executive in the United States. Most Wall Street chief executives—including those at Goldman Sachs, Morgan Stanley, and J. P. Morgan Chase—reduced their pay packages at the time.
Fuld was a long-term player and knew that better days were ahead. Lehman's rebound continued in the first few years of the millennium, as the firm earned a reputation for its stellar management through three primary accomplishments: First, the company kept employees' salaries in line with earnings, with the ratio of compensation costs to gross revenues hovering around 51 percent. Second, Lehman maintained a strong focus on U.S. government bonds, global fixed income, and credit derivatives at a time when the equities and investmentbanking markets were losing propositions. Finally, the firm retained its best managers by handing them substantial portions of stock in the firm. In 1994 employees owned 4 percent of Lehman; by 2004 they owned 35 percent. In 2001 the firm allocated $544 million for stock-based pay, accounting for 15.8 percent of its total compensation expenses, as compared with the 6.4 percent allocated for such purposes at Merrill Lynch. Fuld's message to new recruits: If you join us, we promise to make you rich—perhaps seriously rich. And he delivered on that promise—by 2002 the company was teeming with self-made millionaires.
In October 2003, Lehman Brothers seized on an opportunity to expand its business. In 2004 Lehman Brothers acquired Neuberger Berman in a deal valued at $2.63 billion.
For Fuld the Neuberger acquisition was the realization of a strategy he had been espousing since the mid-1990s: to diversify the company's business and lessen its reliance on the bondtrading market. The company expected the acquisition to increase its percentage of fee-based revenues from 13 percent to 21 percent. The move put Fuld's company on equal footing with Morgan Stanley, Merrill Lynch, and Goldman Sachs, all of which had significant money-management businesses. In Neuberger Berman, Lehman had obtained a firm with $63.7 billion under management, a well-regarded cadre of mutual funds, and a slice of the sought-after business of financialservices provision to high-net-worth clients.
In 2003 Daily Deal awarded Lehman Brothers the "Top 5 Global M&A Announcements of 2003 Deal of the Year" for its consultation with Travelers for the company's $16 billion merger agreement with St. Paul Companies. All told Lehman consulted on $99 billion worth of U.S. mergers and acquisitions in 2003, increasing its market share by 6.2 points to 18.9 percent, according to Thomson Financial. That gave the firm the lead in mergers and acquisitions in the industry, over Credit Suisse First Boston, Merrill Lynch, and J. P. Morgan Chase. Among major Wall Street firms, Lehman claimed fourth place in mergers and acquisitions overall, up from ninth in 2002. In 2003 the company raised $314 billion in debt and equity issues for clients, cementing its position as the number-two underwriter of securities in the United States—behind Citigroup—up from the number-four spot in 2002.
Lehman Brothers' success stories were largely a byproduct of Fuld's focus on offering a complete array of financial services, including advisement on corporate merging, raising capital, hedging risk, and making debt payments. Fuld's transformation showed foresight. As the economy picked up, bond insurance was expected to soften; Lehman's investmentbanking operations would be the counterbalance to the expected downturn in bonds. Blaine A. Frantz, the senior credit officer at Moody's Investors, told BusinessWeek, "It is a much more diversified shop than it was five or six years ago, and it operates in an extremely disciplined fashion" (January 19, 2004).
In January 2004 when Institutional Investor ranked Fuld first in its annual Best CEOs in America survey in the Brokers & Asset Managers category.
In overseas operations. The company was ranked fourth in European M&A work in 2002, with a market share of 19 percent, but it fell from number eight to number nine in the global rankings for announced mergers. As of early 2004 one of Fuld's goals was to improve the company's overseas market share, partly by appointing two top executives in Asia and Europe to the company's executive committee.
----------------
Fuld's Lecture at Harvard Business School (Reported date 16-10-2006)
In the speech he gave as part of Harvard Business School's Distinguished Speaker Series, Fuld described the five critical qualities he believes every leader must have (HBS, 2006).
"Real leaders earn the right to lead by understanding the business and mechanics of one's own organization," Fuld said, referring to his first quality of leadership. To Fuld, this means doing one's homework, connecting the dots and learning how the pieces fit together. "When you know what you are talking about, others will follow you," Fuld said.
A leader must also be committed to a strategy, and show that commitment. To this end, Fuld believes a leader must pick a strategy and stick with it. However, as he pointed out, if that strategy turns out to be wrong, a leader must have the guts to admit it and come out with a new strategy.
Fuld is quick to share the credit for such successes. The CEO's third quality of leadership, knowing how to leverage teamwork, is central to Lehman Brothers' culture and focuses on the belief that one person cannot deliver the whole Firm.
From the failures of Lehman Fuld realized that the firm suffers when teamwork suffers and as a result, when Fuld became chairman, nearly a decade later, the first thing he did was build the current "One Firm" culture, where teamwork is critical and goals are shared. To do so, he follows a very simple formula: hire great people who will work together, give them the tools and training they need to be successful, hold people accountable, pay them fairly, and expect them to think, act and behave like owners. Fuld backs this last step by paying all employees partly in Lehman Brothers stock, creating a culture of ownership.
Fuld believes so strongly in surrounding himself with the best people that he considers it another critical quality of leadership. According to Fuld, a leader cannot be afraid that he or she might look bad when others look good. "When you want an 'A' job done and when you want to run an 'A' firm, 'B' people are not good enough," said Fuld.
Fuld believes that leaders set the tone, which is why his fifth and final quality of leadership is to lead by example. Fuld said that in addition to his responsibility to the client and to the transaction, he has another responsibility-to teach others. He expects his senior people to do the same throughout the Firm, creating a culture of responsibility and driving results.
Fuld concluded by saying that the reward for a leader lies in others' achievements and that a true leader gets people to perform at a higher, more productive level, benefiting the whole organization.
--------------------
You can access the speech by Fuld at Leeds Business School in 2006 from the page
http://leeds.colorado.edu/about/interior4.aspx?id=542,585,316,417,2231
-----------------------
Richard S. Fuld, Jr. Named to Barron's "The World's Most Respected CEOs" List
26 March 2007
Chairman and Chief Executive Officer Richard S. Fuld, Jr. was named to Barron's "The World's Most Respected CEOs" list. Dick is one of 13 CEOs in the world who has been named to the list every year since its inception. (Lehman 2007)
In its March 26, 2007, issue, Barron's writes:
• "A Lehman Brothers lifer who joined the firm in 1969, Fuld brings passion and competitiveness that are powerful even by Street standards."
• "Since its spinoff in 1994, Fuld has made the bond specialist into a rival to Goldman Sachs and Morgan Stanley."
• "Lehman's stock is up 20-fold since '94. That's good news for employees, who own 30% of the company."
In compiling its third annual list of 30 top corporate leaders from around the world, Barron’s looked at financial and stock market performance, spoke to investors, and assessed leadership and industry stature.
---------------------------
Basic Sources:
Reference for Business, http://www.referenceforbusiness.com/biography/F-L/Fuld-Richard-S-Jr-1946.html
HBS 2006, http://media.www.harbus.org/media/storage/paper343/news/2006/10/16/News/Lehman.Brothers.Ceo.Shares.His.Qualities.Of.Leadership.At.Distinguished.Speaker-2372811.shtml
Lehman 2007, www.lehman.com/who/awards/2007/barrons_respected_ceo.htm
Other References
Auletta, Ken, Greed and Glory on Wall Street: The Fall of the House of Lehman, New York, N.Y.: Warner Books, 1987.
Cooper, Ron, "Can a Troika Take Lehman Up a Level?" Investment Dealers' Digest, August 24, 1992, p. 16.
Horowitz, Jed, "Does Lehman Finally Have It Right?" Investment Dealers' Digest, August 25, 1997, p. 16.
Kerr, Ian, "Fuld's Pay Sheds Light on Lehman," Financial News, March 25, 2002.
Thomas, Landon, Jr., "Lehman to Buy Neuberger Berman for $2.6 Billion," New York Times, July 23, 2003.
Thornton, Emily, "Lehman's New Street Smarts," BusinessWeek, January 19, 2004, p. 62.
Truell, Peter, "Is Lehman Ready to Take the Plunge?" New York Times, June 3, 1997.
Tully, Shawn, "Can Lehman Survive?" Fortune, December 11, 1995, p. 154.
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