Friday, December 30, 2011

"My job is to make arms and legs"

We should be incredibly grateful for people like Alberto Cairo.

The video below is from TED and is titled 'Alberto Cairo: There are no scraps of men'. 

Alberto Cairo's clinics in Afghanistan used to close down during active fighting. Now, they stay open. At TEDxRC2 (the RC stands for Red Cross/Red Crescent), Cairo tells the powerful story of why -- and how he found humanity and dignity in the midst of war.

I wish there was a transcript of the talk that I could share as Alberto has some of the most powerful words entwined in his story.

The video is only 20 minutes long, but I think it is an amazing 20 minute experience.

Enjoy.

Monday, December 26, 2011

What Is YOUR Vision For 2012?

"People who soar are those who refuse to sit back, sigh and wish things would change. They neither complain of their lot nor passively dream of some distant ship coming in. Rather, they visualize in their minds that they are not quitters; they will not allow life's circumstances to push them down and hold them under."
- Unknown Author

So what is your vision for 2012? And I am not talking about world peace etc! What is YOUR personal vision for 2012 and when Dec 2012 rolls around and you reflect on your year, how will you measure your success.

Are you using a Vision Board to visualize your year ahead? Seriously I am not trying to be funny here, the fact is Visualization is a part of all of our lives. Ever heard of a Vision Statement? Almost every company I know has one. A Vision Board simply allows one to use imagery rather than text.

Personally I do not use a Vision Board although I acknowledge the potential merits of using one. Nor do I have a Vision Statement. What I do is simple but it works for me. I divide my year into 2, Family and Work. Then I come up with 5 MAXIMUM measurable objectives for Family and Work.

For example, if one of my Family objectives is "to be a better Father", whilst noble is not really measurable. So instead I could have a think about what being a "better Father" means i.e. reading my son a bedtime story each night. That way at the end of each week I would know if I achieved the objective. Similarly, if my objective "was to become more healthy in 2012" how would I know if I achieved it or not?  Hence I would find it of greater benefit to create a measurable objective i.e. "to exercise 4 times a week at my local gym"

Please note:
  1. These are my own two categories. You need to decide what works for you.
  2. My definition of family includes, other personal activities. The reason that I use the term "Family", is because with 2 young sons much of my personal time is centered around my family.
So why do I only choose 5 objectives for my 2 categories. It is simple... 10 objectives are already too many to simply remember (for me anyway) and anymore would not be effective (the law of diminishing returns).

At the end of the day this exercise is a personal choice. Some of you may set New Year's resolutions, some may be very happy with the status quo. Either way, the choice is obviously yours however I leave you with this thought. Why is it we so often plan to the n'th degree various strategies in our work life and yet seldom do we see the same effort applied to our personal lives?

Perhaps the cat was on to something... "One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter." - Alice in Wonderland by Lewis Carroll

Saturday, December 17, 2011

The Problem With Profit!

Profit is everything right? Wrong!

I could have called this article "what small business owners can teach managers in large corporates", but:
a) that is a crap title for an article
b) does not do justice to the importance of understanding how simply looking at profit can be so dangerous.

Take this example. A stand alone business unit of a publicly listed company ran its own Profit and Loss (P&L) that was consolidated up to the parent company. On one particular month the business unit sold (I am going to make the numbers up for purposes of confidentiality) $4mil worth of product to various retailers. The Cost of Goods was around $2mil and the Expenses were around $1.5mil. So if you do the simple maths you can see the EBITDA (operational profit) was $500K or 12.5%. Good business right? Well not quite. You see the same month the business had forecast sales of $6mil, although because of lead times to manufacture the product the forecast was required by the Inventory Manager to purchase the stock 5 months before the stock was shipped to the retailers. Unfortunately the business had actually forecast $6mil for 3 months in a row but about 1 month out of the first of the $6mil months the retail market tanked and whilst the Sales team were trying to come up with initiatives to make up the shortfall, the reality was the retailers were reducing their spend. So the long and short of it was that the business was having to pay for stock that is was not selling. In essence we have here a negetive cash position i.e. more money is going out than is coming in. In fact the reality was that if this business unit had not been part of a much bigger company it would have been in serious financial trouble with an inability to pay creditors.

But wait a minute, the business made an operation profit of 12.5%. So to summarise - a profitable business in serious financial trouble.

Putting the market challenges aside one of the key contributors to such a problem is the lack of all round financial skills that managers learn in large corporations.

Whilst larger companies can teach some great business skills they often don't teach great all round financial skills. Small business owners come to know the saying "Cash is King" very early on. However in large companies Cash Management can be part of Accounts Receivable, Treasury and often the domain of the Chief Financial Officer. Hence many employees, even General Managers with P&L responsibility, don't learn great financial skills as Managing Cash flow may be outside their remit. What they learn is primarly centered around the Profit and Loss.

So the next time you see a profit number, ask the question, "How does the cash position relate to the profit number?". If you do, and are in a large corporate, you are already ahead of many of your peers (and in many cases those above you). If you are in a small business and have not asked the question, God help you because your Bank Manager won't.

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I appreciate there may be readers who are questioning the forecasting, inventory management, supply chain, sourcing process etc that should assist in helping to manage the stock risk. The purpose of this article is not to overlook the various stock control mechanisms but to illustrate the problem with only focusing on profit.

Friday, December 9, 2011

My finger used to hurt when I dialled the phone!




My youngest son is 7 weeks old. I was thinking the other day about how different my upbringing was compared to the world he has entered. Feeling a little nostalgic I thought I would put pen to blog.

Then (I was born early 70’s) Now
School Assignments
(Text)
If we had a school assignment the school would call the local library to ensure that the assignment books could only be loaned for 3 days max. That way everyone had a chance of reading the books. Google it.
School Assignments
(Images)
As above, but we used to have to use tracing paper to outline and colour in the pictures we were going to use. Google Images.
Phone Big phone with a round plastic dialling button. Lots of Zero’s sucked as it hurt your finger when you went around the whole way and hit the metal piece. For the kids it looked like this : link I’m skyping from my tablet.
Tablet Was the dosage pharmaceutical companies used for how humans took a drug. It’s not a computer but it is. It is also “magical”.
Flying on an aeroplane This was a BIG DEAL back then. My parents actually bought me a suit for the first time I went on a plane. Its a flying bus with seatbelts.
Computer Games We had a ZX Spectrum in the early 80’s. You had to load a tape that took 15min+ to load the game. Play in real time with someone else on the other side of the world.
Portable Computer The first first portable computer I ever used was an Olivetti M21. It weighed about 15KGs. It had a 8MHz CPU and 640Kb of memory My Samsung Galaxy II weighs 116g has a Dual-core 1.2 GHz and up to 32gb internal memory. Specs.
Music Player Something that played a vinyl record or a tape. My phone.
Music Shop A shop that sold vinyl records, tapes and later cd’s. You used to browse the collections by flicking through the collections with your fingers. The internet.
Cars My fathers car had 4 wheels, an engine, a steering wheel and he would fix it by opening the hood and doing things :) My car has wheels, an engine, a steering wheel and when it needs fixing a mechanic opens the hood and then I am required to pay a fee that helps to pay off the debt of a small 3rd world nation.

I appreciate this post is atypical of my normal Execution & Strategy type posts but there is nothing like a little reflection to bring about a smile. I am sure many of you have thought similar things about your past vs present. Feel free to share your thoughts in the comments section.

Sunday, November 27, 2011

Metrics + No Consequences = Don't Bother

Regular readers of my blog will know that I have a keen interest in the area of metrics and their misuse.

This article pertains to project execution however there may some readers who see relevance in their day to day business environment.

Management guru Peter Drucker said, "What's measured improves". Whilst I agree with the sentiment, my view is that creating metrics (measurements) is a futile exercise if there are no consequences, should the metrics be continually missed or ignored, or alternatively should they be exceeded with little to no recognition.

We all live with metrics everyday, outside of business, and miraculously seem to (in the main) be able to meet the objectives. For example, traffic speed limits. Typical traffic roads rules include set speeds for various roads. Government authorities impose speed limits, for various reasons, that road users are required to obey. Should anyone break the speed limit, and are measured doing so, the repercussion may be a fine or loss of driving points (if relevant to the given country) etc. Should one choose to continually break the speed limit, and get caught, the severity of the action taken by the authorities may be increased i.e. increased monetary fines, potential loss of licence etc. In summary should a driver choose to ignore the set metric, there are consequences. In part (I appreciate not all) this helps ensure the majority of road users keep within the set parameters thereby helping to ensure an orderly road system.

Yet in the everyday business world there is often a chasm between the set metric and the outcome.

I have seen a numerous projects and "transformation programs" where a key platform of the recommendations is the introduction of new metrics aligned to the deliverables (prize). I have seen these same companies set up fantastic spreadsheets tracking the progress in line with the new metrics. However time and time again the prize emblazoned on the PowerPoint presentation does not materialize. Please do not get me wrong, there are multiple reasons why a project / program does not achieve its objectives (including setting the wrong objectives and metrics to start with) however in my opinion the lack of consequences for not adhering to the new measurements is often a considerable reason for a project's performance.

I am not suggesting firing anyone and everyone for missing a number or objective however I am suggesting that if a metric is in place and it is ignored or missed by a mile then there should be an action plan to get things back on track, including resetting the metric or objective if appropriate. Likewise, it is equally important to recognize those who do meet and / or exceed the set requirement. Again, I have seen many employees work ridiculous hours to achieve a specific objective only to end up incredibly demotivated because their effort in achieving the metric was overlooked.

Part of the action plan may be the need to review the metrics or objectives themselves. How many times have you looked at a Balanced Scorecard and scratched your head wondering who is really responsible for achieving what? (As an aside here is a great article on this particular issue - link).

My suggestion to anyone reading this is that the next time you are assigning metrics ask yourself, "If this objective / measurement is or is not met, then what?" If the answer is "absolutely nothing"...don't bother.

Sunday, November 13, 2011

What Would You Learn If Your Plane Crashed?

Peter Drucker is quoted as saying, “Follow effective action with quiet reflection. From the quiet reflection will come even more effective action.

When Mr Drucker says "quiet" I am would hazard a guess that he was not talking about a  plane crash. 

However this is exactly Ric Elias's experience. 

Ric Elias had a front-row seat on Flight 1549, the plane that crash-landed in the Hudson River in New York in January 2009. What went through his mind as the doomed plane went down? At TED, he tells his story publicly for the first time.

The video is titled: Ric Elias: 3 things I learned while my plane crashed





Time for a little quiet reflection.

Sunday, November 6, 2011

Sales: Are You Delivering?

Over the last two weeks I have had a couple of interesting experiences that demonstrate a classic example of a business not executing appropriately across the total business (or value chain).

Recently I purchased two products from two separate online retailers. The first item was a TV and the second item was a Smart Phone.

Both online retailers touted their ability to deliver significant savings to the customer (i.e. me) due to their low cost business models. And to be fair, the prices on both products were far lower that I had seen in traditional retail outlets. Additionally both online retailers provided free delivery. So in summary, the proposition to me was brilliant. I was purchasing well known products, through reputable online retailers at below market prices and I did not need to leave the comfort of my lounge chair. How could I go wrong????

Retailer 1: The TV
The website gave the option to choose the delivery date. I purchased on a Monday and chose to receive the product 2 days later on the Wednesday. At 10am Wednesday morning I received a call from the delivery driver saying he will be at my house at approximately 12 to 12:30pm. At 12:30pm my new TV was delivered.
Experience Rating - Excellent
Probability of repeat purchase - High

Retailer 2: The Smart Phone
After I purchased the item, I received a confirmation email that included the line "Products listed as "In Stock" are usually dispatched within 3 business days." 3 Days came and went very quickly. In fact 7 days came and went very quickly. I called the order inquiry line.... and was asked to leave a message. Then I sent an email, to which I received a response saying "There have been slight delivery delays on some Samsung phones in the last week. We pride ourselves on the speed of our service and delivery and almost always our Canon, Apple, Nikon and Samsung products are dispatched within 48 hours. There have been some airline issues for International flights ...." yada yada yada. Long story short, my phone will be delivered next week - 15 days post the purchase date.
Experience Rating - Crap
Probability of repeat purchase - Low


Now lets break this down into a very simple value chain analysis. (Note: Please do not email me saying this is not a proper Value Chain. I understand this. This is merely for illustrative purposes).

Retailer A:
TV
Retailer B: Smart Phone
1 Source product Achieved Achieved
2 Price product and highly competitive rates Achieved Achieved
3 Provide comprehensive and easily to navigate on line retail environment Achieved Achieved
4 Accept payment for product (nice way of saying take upfront payment) Achieved Achieved
5 Provide delivery window Achieved Achieved
6 Deliver product within specified time frame Achieved FAIL

This is an excellent example of how failing in execution can minimize one's competitive advantage. Here we have two like businesses with similar business models. And yet one has an significantly increased probability to generate further income from its customer (me).

Why is this? In a previous article (Under promise and over deliver) I quoted Tom Peters, "Formula for success: under promise and over deliver". In the case of Retailer B, simply delivering would be a win (sorry I could not resist).

The reason the the final outcome, that is repeat purchasing, is so different is the ability to execute the total Sales process.

Sales is not simply getting extracting money from a buyer. It is understanding the total value chain that is required to generate repeat purchasing. The inability to execute against any step along the Sales value chain reduces a company's competitive advantage. In the case of Retailer B, as a consumer would you care about the problems with the international flights or the outsourced freight supplier i.e. the retailers logistics. No, as a customer you would care about making sure the product you have paid for arrives on time. Quite simply the customer expectation is "deliver what is promised"!

It does not take a genius to develop a strategy of selling high volume product at competitive pricing. However it does take great execution to deliver a competitive advantage.

Wednesday, October 26, 2011

It Takes Just One Bad Apple....

Bad Apple
The reason I haven't posted in over a week is that my beautiful wife has just given birth to my new son. During my wife's stay at hospital she was given fantastic attention by a multitude of mid-wives (staff)... except for one. I won't go into too much detail but the rudeness of this particular staff member was disgraceful. And it was this particular mid-wife that inspired this post.

You see, this one mid-wife almost destroyed all the goodwill built up by all her fellow team. When I think about the number of staff members that interacted with my wife, i.e. doctors, mid-wives, porters, cleaners, catering etc the number easily exceeds 20 people. And yet it only took 1 person to leave a sour taste of the experience.

What strikes me is that this is not unusually and demonstrates:
a) The critical importance of a business' Front Line Staff.
b) The damage 1 can do to many.

How many times have you experience poor customer service? It is neither here nor there whether it is face-to-face or over-the-phone. It also does not matter whether it is a billion dollar bank or a small business. The reality is that poor customer service can have a material impact on the bottom line. Some facts include (Source Link A & Link B):
  1. It takes 12 positive experiences to make up for one unresolved negative experience – “Understanding Customers” by Ruby Newell-Legner
  2. A 5% reduction in the customer defection rate can increase profits by 25 – 95% – Bain & Company
  3. A customer is 4 times more likely to defect to a competitor if the problem is service related than price or product related – Bain & Company
  4. 68% of customers leave because they were upset with the treatment they received whilst speaking to customer services – US Chamber of Commerce
  5. 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1st Financial Training services
  6. A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people – White House Office of Consumer Affairs
  7. Companies that make customer service a high priority see twelve times the return on sales than those companies with a low emphasis on service - 
  8.  International Customer Service Association
Unfortunately I do not have any facts on the impact of social media i.e. Facebook, Twitter, Blogs etc particularly in the area of mass communication of poor service or experiences.

Back to the hospital! This particular hospital has four values, three of which are, Compassion, Respect and Excellence. Clearly the hospital's strategy and ability to execute were not aligned for the mid-wife in question. Like all organisations, this hospital could have a 95% (1 in 20 as stated above) success rate in employees adopting the values element of the corporate strategy however the impact of that one person literally wiped out the entire 95% achievement for us as customers.

A search on Google or Amazon will give you countless books and articles on Customer Service practices etc. Additionally there are a plethora of consultancies and training companies focused on the area of Customer Service. However for all you Execs, Managers out there always keep one simple fact in mind....It Takes Just One Bad Apple!

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As a side note the forth of the core values at the hospital was Accountability. We were very impressed by the Customer Service Manager who did an exit interview with us re my wife's stay. As returning to the hospital is not in our near term plans it would be very interesting to see how the feedback we provided is used to minimize the potential negative impact of the one bad apple by living the core value of Accountability.

Sunday, October 16, 2011

Benchmarking: The Good, The Bad, The Ugly

Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. (source)

As many of you may have experienced, it is common practice for companies and/or their specific business units to undertake Benchmarking exercises, often by paying exhorbent fees to Professional Services companies to provide the required facts.

I recently came across an old video of Tom Peters discussing Benchmarking in a presentation (note: the video is at bottom of this post). Tom states, "... I hate Benchmarking! Benchmarking is Stupid! Why is it stupid? Because we pick the current industry leader and then we launch a five year program, the goal of which is to be as good as whoever was best five years ago, five years from now."

Tom has a point. And it is a good one. This is the "Ugly" in Benchmarking. There is no use setting your objective based on trying to achieve a specific measure if the reality is the best-in-class company is going to continually move the goal posts forward. This is why innovation is so important. If you only chase the leading benchmark you will always be a follower. To quote Steve Jobs, "Innovation distinguishes between a leader and a follower." Or as Seth Godin wrote, "The reason it is so hard to follow the leader is this: The leader is the leader precisely because he did something remarkable. And that remarkable thing is now taken - so it's no longer remarkable when you decide to do it."

However I do not totally agree with Tom. As the first part of the definition states, Benchmarking is the process of comparing one's business processes and performance metrics... In my view is this is critical. Obvious, but critical. I liken it to going on a journey. It is impossible to get to point B or C if you do not know where your starting point i.e. point A, is. Hence, in my view, this is the "Good" in Benchmarking as having a solid factbase about your own business (and not necessarily everybody else's)  is an essential starting point of executing any strategy.

The 2 minute video below, includes the Tom Peters quote above:



BTW. There is no "Bad". It just made for a good blog title :)

Wednesday, October 12, 2011

Steve Jobs: More Henry Ford than Leonardo da Vinci

There have been a number of articles recently comparing Steve Jobs to various famous figures, for example Steve Jobs v Einstein or Steve Jobs v Leonardo da Vinci.

However what surprises me is that I have come across very little in the way of comparisons to one of the greatest business people and marketer's of the 20th Century, Henry Ford. The reason that I am surprised is that I find considerable similarities between Apple and Ford (with particular reference to the Model T Ford).

SIMILARITIES:

1) Existing Concepts:

Company Product Comments
Ford Automobiles The concept of the first automobile dates to 1672.
Apple Mouse See Xerox Parc re concept.
Apple Apple Mac See: History of Personal Computers
Apple iPod Apple acknowledges the concept dates to 1979
Apple iPhone See: History of Smartphones
Apple iTunes Apple purchased the rights to SoundJam MP.
Apple iPad See: How The Tablet Computers Have Evolved

To summarise the table above, neither Ford nor Apple invented the concept related to the product for which they are famous.

2) Lack of Product Customisation:

Both Ford and Jobs are famous for not creating multiple customisations of their products in response to consumer requests.

In Henry Ford´s 1923 autobiography ‘Henry Ford - My life and work he quotes himself as saying, “Any customer can have a car painted any colour he wants so long as it is black”.

Likewise Steve Jobs and Apple haVE been criticized countless times for their strict control over their closed business model (ecosystem).

3) Mass Market Focus

Henry Ford:
"I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God's great open spaces."
Steve Jobs:
Steve Jobs and Bill Gates were interviewed at 'D5: All Things Digital' conference in Carlsbad, California, in 2007. When asked what each has contributed to the computer and technology industry Bill Gates said of Steve Jobs: “What Steve’s done is quite phenomenal, and if you look back to 1977, that Apple II computer, the idea that it would be a mass-market machine, you know, the bet that was made there by Apple uniquely—there were other people with products, but the idea that this could be an incredible empowering phenomenon, Apple pursued that dream. Then one of the most fun things we did was the Macintosh and that was so risky. People may not remember that Apple really bet the company. Lisa hadn't done that well, and some people were saying that general approach wasn’t good, but the team that Steve built even within the company to pursue that, even some days it felt a little ahead of its time—I don’t know if you remember that Twiggy disk drive and…"
4) Visionaries:

Both Henry Ford and Steve Jobs were incredible visionaries. Whether it was the Henry Fords’ foresight to create a process and production line that allowed for an affordable car or Steve Jobs remarkable ability to see the mass potential of an existing product through great design (Steve Jobs: Design is not just what it looks like and feels like. Design is how it works.) both men were visionary in their thinking and execution.

SUMMARY:

Leonardo da Vinci was an astonishing inventor and whilst neither Henry Ford or Steve Jobs invented the concepts of their most famous products,  they  (and their businesses) shared a number of characteristics, not the least being their ability to execute their vision.

Wednesday, October 5, 2011

The Speech Every Graduate or Exec Should Watch.

Today is a sad day. The world has lost an incredible innovator.

The speech by Steve Jobs below is one of my all time favorite speeches. Steve Jobs RIP.



“Don’t be sad because it’s over. Smile because it happened. — Dr. Seuss"

Wednesday, September 28, 2011

Fact: The world focuses on Strategy and not Execution!

It goes without saying that I am huge proponent of the execution of strategy and not simply strategy per se. As Morris Chang (CEO of TSMC)  said, “Without strategy, execution is aimless. Without execution, strategy is useless.”

I have noted previously, that there is a continual focus on strategy in management and academic literature and very little in the way of execution. Well now thanks to the wonders of technology and in particular Google's Ngram Viewer we can now see the facts behind this claim.

Below is a chart of a comparison of the words Strategy and Execution that occurred in English books published between the years 1800 and 2008 (I was unable to produce a chart up to 2011).

Click chart for a detailed view

A picture tells a thousand words!

Monday, September 26, 2011

It's time to ban 'Blackberry Behavior'!

'Blackberry Behavior' definition: A manner in which a user responds to an email with a one word reply.
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People listen..."Just because you send it from a blackberry (or other device - even your pc) a one word email is not acceptable!".

I have had enough of one word emails. And I am delighted to say that it turns out I am not the only one.

I have noticed a correlation between the more senior a manger becomes (particularly in their own mind) the shorter their emails become. This seems to be corroborated in an article from Online The Wall Street Journal (WSJ) titled Five Signs You're a Bad Boss, where the first sign listed was "Most of your emails are one word long".

Interestingly enough I have also noticed that managers who are particularly respected by their employees have a tendency not to write the one word emails.

For whatever reason there seems to be some sort of acceptance that sending an email from a mobile device in particular - Blackberry being the Godfather of email from the mobile device - that one word emails are OK. No, wrong etc etc... again "Just because you send it from a blackberry (or other device - even your pc) a one word email is not acceptable!"

If you search "email etiquette" in Google you are provided a plethora of content that points to the demise of basic communication standards. I think the example given in the WSJ article provides an excellent example of the pathetic standard set by even more pathetic managers:

"When Christina Marcus emailed an idea for a project to a former boss, he responded "Y." Thinking he was questioning her idea, she spent 20 minutes crafting a response. Turns out, the "Y" meant "yes," not "why." " Ms. Marcus eventually left the firm."

So what can we do to improve this blight on society. Simple:
  1. companies could create email etiquette policies that ban one word emails
  2. mobile device makers and the email software providers could make sending one word emails impossible
  3. anyone typing an email could use common sense (and heaven forbid, some manners)!!!
For those reading this and thinking no one could misinterpret one word emails, I would like to point you to a great blog article and suggest you to try a little reflection:  http://www.unboxedthoughts.com/2011/02/18/the-blackberry-effect-brevity-breeds-message-confusion/ 

Friday, September 16, 2011

How do you define success?

It is interesting how people define success. Here are two poems that give a slightly different view of defining success in one's life.

Poem 1:
“Success”
Inaccurately attributed to Ralph Waldo Emerson*

To laugh often and much;
To win the respect of intelligent people
and the affection of children;
To earn the appreciation of honest critics
and endure the betrayal of false friends;
To appreciate beauty, to find the best in others;
To leave the world a bit better, whether by a healthy child,
a garden patch or a redeemed social condition;
To know even one life has breathed easier because you have lived.
This is to have succeeded.

Poem 2:
Author Unknown

                         At age 4, success is...not peeing in your pants.
                            At age 12, success is...having friends.
                               At age 16, success is...having a driver's license.
                                 At age 20, success is...having sex.
                                  At age 35, success is...having money.
                                   At age 40, success is...finding meaning & purpose to life.
                                   At age 45, success is...finding meaning & purpose to life.
                                At age 50, success is...having money.
                             At age 60, success is...having sex.
                          At age 70, success is...having a driver's license.
                       At age 75, success is...having friends.
                    At age 80, success is...not peeing in your pants.


Isn't life a funny thing :)


*If you are interested in reading further about the origins of the Poem titled "Success" and the original author Bessie Anderson Stanley see: link

Saturday, September 10, 2011

You cannot cut yourself to growth!

I recently attended a Turnaround Management Association (TMA) conference that whilst many would find uninspiring (i.e. my wife), I found very interesting. As with so many conversations and presentations related to discussing a Turnaround, you will often hear the phrase "stop the bleeding". Typically this refers to stopping a cash hemorrhage on a business that is putting the company in financial distress. And, again, typically, this will lead to considerable cost cuts in the business to reduce the cash outflow.

Whilst I firmly support the need to cut costs where necessary, should a company be in financial distress, this is only a short term solution. Quite simply:

"You cannot cut yourself to growth!"

Underpinning any Turnaround effort is the need for a growth strategy. Simply cutting costs when competitors are actively trying to capture market share is a recipe for disaster. Don't get me wrong I have no issue with a smaller, leaner organisation coming out of a cost reduction program however this in itself does not create a sustainable advantage.

From a timing perspective, "stopping the bleeding", needs to be undertaken as quickly as possible where a company is in financial distress. In part, the benefit of stabilizing the cash flow situation is to allow the organisation breathing space to develop a growth strategy. This is particularly relevant where companies are in  a critical and often sudden state of financial distress.

Remember at the end of the day it is called a Turnaround and not a Standstill. At the forefront of any Turnaround professionals' mind must be a focus on reducing costs and setting the business on a path for growth. Simply cutting costs does not grow the business. 

Sunday, September 4, 2011

Are you a Bad Leader?

Leadership is a contentious issue. As journalists all over the world poured praise on Steve Jobs after his decision to retire as CEO of Apple, the question of his leadership style also generated its fair degree of scrutiny (Forbes article).

A quick check at Harvard Business Review shows that searching using the word "Leadership" generates 7404 results, including:
HBR's 10 Must Reads on Leadership
Social Intelligence and the Biology of Leadership
Leadership That Gets Results
and so on and so on and so on.....

However what fascinates me is that the majority of the materials written all suggest ways and means for one to become a great leader. However very little appears to be dedicated to the opposite i.e. Bad Leadership.

Of the very little that has been written on this subject Barbara Kellerman's book Bad Leadership: What It Is, How It Happens, Why It Matters is a standout (for me anyway). Kellerman outlines seven types of Bad Leadership:
  1. Incompetent: lacks the will or skill (or both) to sustain effective action with regard to at least one important leadership challenge 
  2. Rigid: stiff and unyielding; unable or unwilling to adapt to new ideas, new information, or a changing of the landscape 
  3. Intemperate: lacks self-control 
  4. Callous: uncaring or unkind; ignores or disregards the needs, wants, and wishes of others, especially subordinates 
  5. Corrupt: lies, cheats, or steals; puts self above any other interest 
  6. Insular: minimizes or disregards the health and welfare of anyone outside the group or organization for which they are directly responsible 
  7. Evil: outright disregard for even the human worth of others; egregious inhumanity. 
So why is it that so little is written about the subject of Bad Leadership. Is it because by nature we humans are naturally optimistic and hence are not interested in understanding a negative view of a positive subject? Or is it because we see Bad Leadership everyday whether it be at work or watching the daily dose of political madness and hence have little interest in understanding what we see everyday? In other words we crave a positive understanding of leadership because we simply do not see enough of it in our daily lives.

I have a big problem with the lack of focus on Bad Leadership and the continual focus on 'how to become a great leader'. I liken it to going to the doctor. Imagine telling the doctor you want to get better but you don't want to know what is wrong. By ignoring the traits of Bad Leadership we ignore what needs to improve. By focusing only on the notion of improving our leadership abilities we do not focus on negative areas that may need addressing.

So now for a little soul searching. Are you a Bad Leader?

Sunday, August 28, 2011

So you are thinking of selling to Private Equity!

Private Equity
Congratulations. You have built an impressive business and have decided that in order to accelerate growth you would like an investment in capital from a sophisticated investor such as a Private Equity firm. Alternatively you may be looking to sell the whole business to a PE firm.

Below are a number of suggestions that may assist in the execution of your strategy.

Before I go on, a big thanks to the anonymous, but experienced Private Equity blogger of www.carriedinterest.com who put much of the list together.
  1. Work out why you are selling and let that drive the structure. People often sell businesses with a focus only on the money and then later look back with regret after six months playing golf. It may be that a partial exit is better for you than a sale would be.

  2. Hire advisers who buy and sell businesses for a living.  Yes, they'll charge a lot more than Fred who does your tax return, or the neighbourhood lawyer who sold your house, but it will be money well spent.  

  3. Dividend out all excess cash well before the sale process begins. Smart buyers will always go after the cash sitting in your business.

  4. Try to resolve outstanding or pending litigation. It may even be worth taking a financial hit to remove litigation which could scare off potential buyers or result in a tough warranty/indemnity/escrow regime.

  5. Address leadership succession issues well before the sale process begins. No smart investor wants to buy a business from a retiring founder. (See my previous post on this topic).

  6. If your inventory controls are loose, complete a professionally supervised stock take. Your goal is to build buyer confidence, and that means avoiding surprises.

  7. Make an effort to collect overdue debtors. It's unlikely that the buyer will pay for accounts receivable which are dated (depending on your industry, this typically means 90+ days).

  8. Sell obsolete or slow moving inventory, as well as any surplus assets. Again, the buyer probably won't give you value for these, so try and monetise them before you start marketing your business.

  9. Remove those embarrassing “personal" assets from the balance sheet. Come on, you know what I'm talking about. Your daughter's computer, the boat you never used for customer sales events, the car you ex-wife drives . . . time to clean it all up.

  10. Ensure that property leases are arms-length. Buying a company where the seller is also the landlord is an uncomfortable, but common, situation. If your company's buildings are sitting in the family trust, at least put in place a proper lease on typical market terms.

  11. Run a competitive sale process.  Getting an offer from several buyers will not only almost always drive up the sale price, but it may also give you a range of different transaction structures to consider.  

  12. Get your books in order. Ideally you should have three years of audited accounts ready to show the buyers.

  13. Get your premises in order. Sounds very obvious, but do not want to give a terrible firm impression due to dirty workshops, offices with 20 year old lighting and carpets, no signage on buildings, etc. As part of this, consider whether your OH&S practices would stand up to outside scrutiny. 

  14. Assume that potential buyers will want to read your board minutes from the past 12 months . . . write them accordingly.

  15. Make sure that employment contracts are in place for all important members of the management team.

  16. Ensure that the accounts are in order - both statutory and management accounts. It is worth making an investment in a decent accounting firm to ensure that the accounts are in as good condition as they can be before buyers pitch up. If can be very embarrassing for a seller to find that their earnings are much lower than they had thought because there is a stock write-off, an uncollectable debt, or whatever hiding in the books.

Wednesday, August 24, 2011

Who inspires you?


As consumers, we are constantly bombarded with CEO autobiographies that laud the given CEO’s accomplishments in the business sector.

I am happy to admit I have read my fair share of these books however whilst the stories were interesting, I can honestly say that I am rarely inspired by the CEOs themselves.

I am not too sure why this is. Perhaps having worked with so many individuals I am accutely aware that there are highly skilled people who do not become CEO because of luck, timing, internal politics etc. Likewise I have seen less skilled people become CEO because of luck, timing, internal politics etc.

When I reflect on who inspires me it is not people in the business sector. For me Nelson Mandela and Mohandas Gandhi are inspirational.

Nelson Mandela: The key attribute that I find inspiring about Nelson Mandela is that after been imprisoned for most of his adult life he still practiced forgiveness of his oppressors and the betterment of the whole of society. I wonder if I was in the same position would I be as forgiving?

Mohandas Gandhi: In a world where violence is (and was) prevalent, Mohandas Gandhi changed the entire political regime through peaceful methods. If you reflect on the bravery shown to stand up to an armed force with nothing but the will not to fight back, is for me, an astounding feat.

When I look back at all the materials from my MBA and the business literature available, I find it interesting that attributes that corporates should aspire to i.e. treating employees with fairness and equality, as well as demonstrating bravery in decision making (not simply following the herd because a new best seller says so) seem to be missing in action. I have a plethora of materials on Strategy, Financials, Marketing etc however very little on the skills of people whose accomplishments will be told in the pages of history. And yet it was these skills that helped execute a change strategy on a scale very few people will ever know.

So who inspires you and why?

Saturday, August 20, 2011

Could you build a windmill?

This is the inspirational story of William Kamkwamba on building a windmill. William demonstrates the fantastic example of how the ingenuity of one person can have a positive and profound effect on their surrounding community.

The video below is from TED June 2007. There is also a book titled The Boy Who Harnessed the Wind that is a highly recommended read.

If you want further information see:
a) William's website - http://williamkamkwamba.typepad.com/
b) Wikipedia article - http://en.wikipedia.org/wiki/William_Kamkwamba
c) TED page - http://www.ted.com/speakers/william_kamkwamba.html

Enjoy the video.



Monday, August 15, 2011

The US debt ... now imagine it was a business Turnaround.

There have been countless articles written about the current state of the US debt.... so here's another one. Except I thought I would put my "business hat" on and look at it from a Turnaround perspective. 

Before I go on, please note:
  1. I have absolutely no interest in taking a political stance. I am merely putting a business lens on the situation.
  2. I am obviously simplifying the scenario and solution, considerably, for the purposes of the article.

So let’s set up the scenario.

We have a company that is over geared (too much debt) and making a loss (deficit) as its expenses are significantly greater than its revenue. Unable to continue its current operations through its existing cashflow, the company has recently gone to the bank in order to increase its Line Of Credit (debt ceiling). However this was seen as not solving the company’s problems and hence the bank is reluctant to agree to the company’s request. Given the current state of the business it is unsurprising that the bank would like to increase the interest rates of its lending to the company as it believes the current situation is riskier than the past (AAA to AA+ rating downgrade).

Assignment:  The bank has asked for a review of the situation in order to bring the company back to profitability as quick as possible and ensure the existing debt is paid down.

So here we have a typical case of a company in distress and the requirement is to implement a Turnaround program. 

Question 1: Can we increase revenue? When undertaking a Turnaround assignment one of the first questions that needs to be asked is “Can we increase prices and not lose volume?”. Whilst price elasticity is always a consideration it never ceases to amaze me how  companies do not increase prices for fear of losing business however when they are forced to raise prices due to their financial distress they are able to get the price increases through and remain at similar volumes. This will not be the case for all businesses but the rule applies – in a Turnaround if you can increase prices whilst maintaining similar volumes (i.e. increase revenue), THEN DO IT!

Question 2: Can we reduce costs? From a P&L perspective, reducing costs is relatively easy when you are only looking at lines on a spreadsheet. However the reality is cost reductions usually involve impacts to people i.e. not merely numbers on a spreadsheet and hence the decision making process often becomes emotive and clouded. Additionally sacred cows tend to rear their expensive heads during cost reduction programs. However the reality is that when a business is in a turnaround phase ALL costs need to be reduced. It’s not easy and it hurts emotionally but when the business is at stake it is better to make the cuts than end up in a situation where bankruptcy is declared. So a similar rule (see Question 1) applies – in a Turnaround if you can reduce costs whilst ensuring the business operations continue, THEN DO IT!

To summarise: If the US was a business any CEO recruited to Turnaround the financials would try to increase revenue and reduce costs.... both at the same time. Sacred cows would be thrown out the door and the clear objective of bringing the company back to profitability would be ingrained in the change management program across all levels of the organisation. The increase in the Line Of Credit would not be required as the company would be able to manage itself in its given cashflows. Finally, as the debt is paid back, the interest rate that the bank lends at is reduced as the risk associated with the company is reduced.

Again I appreciate the fact that I have over simplified the situation and like so many out others out there I sure I may be deemed as just an armchair expert but to quote George Burns, “Too bad that all the people who really know how to run the country are busy driving taxi cabs and cutting hair.

Tuesday, August 2, 2011

Listen..... and build your network.

I recently had a phone hook-up with Jacob Esparza at tech start-up Huklup [hook-loop]. Jacob had contacted me after reading an article of mine - http://www.executionandstrategy.com/2011/04/my-no-1-networking-lesson.html. We had a great conversation about building a network and becoming a connector which brings me to this week’s article.

Networking is something that is easier to talk about than to do.  As I stated in my previous article my key networking rule is very simple -  when you meet someone, don't think about what the person can do for you but think about what you can  do for them personally.  I always stress to anyone who asks my advice on networking to remember that the more you give the more you will get back. 

I have heard a number of times various contacts talk about “time wasters” after being connected for the first time.  Please note that the comment about the “time wasters” has nothing to do with the person's background, experience, credentials etc. It was because they approached the meeting in the wrong way. It turns out these “time wasters” engage in a one way talk fest. 

Remember the saying “you are born with 2 ears and 1 mouth”. This applies to building your network.

Monday, July 25, 2011

Seeing is believing... and birds might fly!

The reason I am putting this video from TED up this week is because I believe that this is a brilliant and effective example where actions speak louder than words. How many times have you tried to make a persuasive argument only to have it knocked back.

Typically a successful argument, suggestion etc requires persuading the audience that "perceiving is believing". However this is clearly not the same as "seeing is believing", which I find to be far more successful when trying to get various parties on side. 

To illustrate my point I often refer to the example John Kotter describes in his book The Heart of Change. John describes a process he calls See, Feel and Change using the "Gloves on the Boardroom Table" illustration.

"A large organization had an inefficient purchasing process, and one mid-level executive believed that money was constantly being wasted with each of the organization's factories handling their own purchases. He thought there could be tremendous savings from consolidating the procurement effort. He put together a "business case" for change but it went nowhere. His boss said that senior executives didn't feel it was truly a big problem, especially with so many other daily challenges taking up their time. So the manager had an idea: he collected the 424 different kinds of work gloves the factories collectively purchased and tagged each one with its different price and supplier. He carted the gloves in and dumped them on the boardroom table before a senior executive team meeting. He first showed the pile to his boss, who was taken aback by this powerful visual display of the waste inherent in having dozens of different factories negotiate different deals for the items they needed! The boss showed the CEO, who scrapped the meeting agenda to talk about procurement because what he was looking at was so memorable, so compelling, and so real. It galvanized the executives to action. Ultimately, they overhauled their procurement process and saved a great deal of money."

And now for the TED video (below). Just imagine for one second that the speaker was doing the presentation WITHOUT the bird and only had visuals on a PowerPoint (or other like medium) to get across his invention. Would you be left with the same WOW factor as you get when you "see and believe". 


Tuesday, July 19, 2011

How talented are you really?

We are forever being bombarded with literature on People Excellence (click here for examples). Personally I have worked with literally hundreds of people over my career and to be honest I think employees (people) are, in the main, all average. In other words I believe the majority of us have similar abilities. Don’t get me wrong, I do believe that:

  1. Most people go to work and want to do a good job 
  2. Most people enjoy being recognised for doing their job 
  3. There are superstars out there in particular fields and by the nature of their job they are easy to identify i.e.  Programmers, Surgeons, Athletes 
  4. The majority of people in “general management” type roles i.e. Marketing, Sales, Operations, HR  have similar ability (however unpalatable that may sound).
  5. There is a big difference between working hard and being a "superstar". NOTE: This is a big distinction for me. There are people whose hard work and determination are what makes them rise above the rest. However this is a considerable difference to natural ability.

What prompted me to think and write about this was a fascinating article on the HBR blog titled Great People Are Overrated. In particular the reference to the research by Boris Groysberg (see Chasing Stars) - "After examining the careers of more than 1,000 star analysts at Wall Street investment banks, and conducting more than two hundred frank interviews, Groysberg comes to a striking conclusion: star analysts who change firms suffer an immediate and lasting decline in performance. Their earlier excellence appears to have depended heavily on their former firms' general and proprietary resources, organizational cultures, networks, and colleagues. There are a few exceptions, such as stars that move with their teams and stars that switch to better firms. Female stars also perform better after changing jobs than their male counterparts do. But most stars who switch firms turn out to be meteors, quickly losing luster in their new settings."

Often “people” are blamed or praised regarding the unsuccessful or successful outcome (execution) of a new strategy. However if we are, in the main, average (similar ability) then the truth is that the outcome of any corporate function, strategic or not, comes from the sum of its parts, as well as external factors, and not simply people. Yet how many more times do I need to be told that without great people, failure is imminent. Perhaps a more apt description to articulate the statement would be – the outcome will be dependent on people trying there best to do a good job plus a multitude of other factors that may or may not be in your control (Global Financial Crisis anyone!).

Perhaps the 30th President of the USA, (John) Calvin Coolidge (1872 - 1933) was on to something when he said, "Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

Saturday, July 16, 2011

Meet a true revolutionary

Whilst the Khan Academy may be USA curriculum centric its potential benefits are potentially revolutionary on a global scale. I am in awe of what 1 person (Sal Khan) has been able to achieve.



http://www.khanacademy.org/

Tuesday, July 12, 2011

Do you know what a paradigm shift is....Really?

The following is an excerpt from The 7 Habits of Highly Effective People by Stephen R. Covey.

I remember a mini-paradigm shift I experienced on Sunday morning on a subway in New York. People were sitting quietly – some reading newspapers, some lost in thought, some resting with their eyes closed. It was a calm and peaceful scene.

Then suddenly a man and his children entered the subway car. The children were so loud and rambunctious that instantly the whole climate changed.

The man sat down next to me and closed his eyes, apparently oblivious to the situation. The children were yelling back and forth, throwing things, even grabbing people’s papers. It was very disturbing.

And yet, the man sitting next to me did nothing.

It was difficult not to feel irritated. I could not believe that he could be so insensitive a to let his children run wild like that and do nothing about it, taking no responsibility at all. It was easy to see everyone else on the subway felt irritated.

So finally, with what I felt was unusual patience and restraint, I turned to him and said, “Sir, your children are really disturbing a lot of people. I wonder if you couldn’t control them a little more”

The man lifted his gaze as if to come to consciousness of the situation tor the first time and said softly,” Oh, you’re right. I guess I should do something about that. We just came back from the hospital where their mother died an hour ago. I don’t know what to think, and I guess they don’t how to handle it either.”

WOW. Very powerful!

Only problem is that is not scientific. Why scientific? Well “a paradigm shift (or revolutionary science) is, according to Thomas Kuhn in his influential book The Structure of Scientific Revolutions (1962), a change in the basic assumptions, or paradigms, within the ruling theory of science.” (see Wikipedia for explanation).

I actually have no issue with Covey calling his example a paradigm shift. Personally I think it is more powerful than say simply “a different perspective”. However it does illustrate how easy a specific terminology can be turned into buzzwords. In the same Wikipedia article the following appears, “In his book, Mind The Gaffe, author Larry Trask advises readers to refrain from using it, and to use caution when reading anything that contains the phrase. It is referred to in several articles and books as abused and overused to the point of becoming meaningless.

Like many of you I often read documents, papers, articles and books that are filled with vomitous amounts of jargon and buzz words. Whilst I do not have a fact base on the correlation of jargon related strategic papers and the successful execution of the given strategies it would be nice to, just one day, read a document written in basic coherent English. Now that would be a paradigm shift J

Friday, July 1, 2011

Accountabilities - How are you measured?

The Merriam-Webster Dictionary defines Accountability as "an obligation or willingness to accept responsibility or to account for one's actions"

I have seen many organisations often bundle together high level generic organisation Accountabilities with individual Accountabilities into generic KPI’s that are then imposed on almost all employees. This methodology fails to hold individuals accountable for their role.

A simplistic example:
Hypothetically imagine you or I were to go to have a surgical procedure. From the moment we entered the hospital it is the “hospital” and all staff involved responsibility to ensure my health is looked after. HOWEVER we do not hold the person at the administration desk accountable for my surgery. Likewise we do not hold the Theatre Nurse accountable for the actual procedure. We hold the Theatre Nurse accountable for ensuring the Doctor has all appropriate surgical instruments etc. Likewise we do not hold the Surgeon accountable for changing my bed pan.

Now imagine if everyone’s KPI at the hospital was the same e.g. “Ensure the health of all our patients.” How would you know who is doing a good job or a great job? How do you know when something goes wrong where the accountabilities lie?

This example can be applied across organisations today. How many of you have a Sales, Margin or Profit number next to your name but your accountabilities are not directly related to impacting the financials? Of course everyone plays a role in the organisations ability to meet its financial objectives however if the metrics are not aligned with Accountabilities then there will forever be lack of role clarity, poor communication and finger pointing i.e. it was someone else’s “responsibility”!

Sunday, June 19, 2011

Half the money I spend on advertising is wasted; the trouble is I don't know which half.

John Wanamaker is attributed with saying "Half the money I spend on advertising is wasted; the trouble is I don't know which half"

Perhaps if Groupon was around in John's era he may have had a little more insight. Before I go on I need to stress I am in no way advocating the use of Groupon as a sales tool. However, I always advocate measuring how a business spends its money....in any department.

I recently came across this article on Techcrunch which I think is fantastic. Have a read - http://techcrunch.com/2011/06/18/ribman-groupon-bashing/

So, why did I love the article? Simple. Look at the level of analysis that Carey Friedman, the restaurant owner of Grandpa Eddies BBQ, goes to in understanding the success of the campaign.

Marketing managers are forever chastised for wasting money:
http://www.marketingeye.com.au/blog/when-your-marketing-is-a-waste-of-money.html
http://www.1to1media.com/weblog/2010/10/stop_the_marketing_waste.html

and if you are keen for a little academic reading:
http://www.sciencedirect.com/science/article/pii/S0167811696000365

If you read the Techcrunch article comments you will see a number of posters are critical about the ROI of the campaign. That may be fair enough, but how many small business owners spend money on advertising (I am using the term advertising loosely here) and have no idea of the cost, outcome (at the detailed level) and hence ROI.

It is not only small businesses that waste marketing money. Anyone remember the $500mil impact the Microsoft Vista campaign. Here are many many more examples of poor marketing spend execution - http://tinyurl.com/3uyoasu

I tip my hat to Carey Friedman. If more small business owners were as fastidious about their marketing spend, as Carey Friedman, then there would be far fewer business owners wondering which half of their advertising was wasted.

Friday, June 17, 2011

IBM 100 years (ish) of innovation

I know it is easy to critical of big corporations and IBM is no exception however this clip on YouTube is brilliant in highlighting the innovation, in terms of both product and people, the company has developed.

Thursday, June 2, 2011

Managing People... What Really Matters.

I am the first to admit I do not excel on the emotional side of people management. Thankfully I can also say (with certainty) I am not the worst. I know this because I have had the the pleasure (sarcastic) to witness comments like "FIFO - Fit In or F... Off" etc etc in various management meetings.

A recent HBR blog post by Tony Schwartz titled "The Only Thing That Really Matters" is well worth the read.

I appreciate there are many out there who do not, for what ever reason, subscribe to the emotional side of people management however the example given in the article of Doug Conant, the outgoing CEO of Campbell Soup is a fantastic case study for demonstrating how managing people is more than KPIs and bottom line results. To quote the article, "Doug Conant .... is a rare example of a CEO who truly appreciates the relationship between personal value and the bottom line."

Many organisations and consultancies are fantastic at developing strategy. But when people are so often treated merely as an expense on the P&L, is it little wonder that that the execution does not deliver the famed "size of the prize"? Perhaps if more managers followed the examples laid out by Tony Schwartz the outcome of many strategies may be materially improved.

Wednesday, May 25, 2011

Human Resources (HR): What went wrong?

Q:How many HR officers does it take to change a light bulb?

A: Four. One to assess the risk of the light bulb changing process, another to consult the light bulb and its stakeholders, yet another to ensure that the health and safety procedures are being adhered to while the bulb is being changed, and a fourth to actually change it.
Source: www.theage.com.au

I need to start with a caveat. My beautiful wife is a HR Manager and is exceptional at her job. This article refers to all other HR folks out there :)

I recently advised a client on a new start-up business. I was talking about the org structure and told him that at the start-up stage not to worry about bringing in any HR personnel as they are a cost center and there would be little to no value add. On reflection I wondered if others agreed with my point of view not only about a start-up environment but also an established corporate environment.

So I did a little research and WOW some authors have not held back. Have a look at these articles:
Why everyone hates HR
The truth about the HR department
What if HR never becomes strategic?

and the grand daddy of them all (note: this article is 6 years old and has been constantly referred to in numerous articles and blogs)

Why we hate HR

There is even a PHD paper based on the above article:
Teaching Guide for “Why We Hate HR”

Finally an article about HR getting a "seat at the table" the readers comments do not hold anything back.

I am sure if I did a search on other professions / roles I would find similar articles, however I was surprised at the venom in some of the comments.

My own personal belief is that there are two sides to this story but that ultimately the execution of a solid HR strategy does not rest with the HR managers but with the CEO's who employ the function and weak managers who palm off responsibility. As blogger Suzanne Lucas at Evil HR Lady says "Why am I evil? Well, I'm not, but that's the perception of all of us in HR. Need to fire someone? Come to HR. Need to explain to someone why, even after working their rear end off all year, that their annual increase is 2.7%? Come to HR. Need to come up with new mountains of paperwork? Come to HR. So, come join me on the Evil Side."

Don't get me wrong. I have worked with a number of HR managers who could not run a bath let alone a business but to lump the whole profession in the "crap basket" is unfair. Owners, CEO etc have to take responsibility for the implementation of their corporate strategy and if part of that strategy is centered around people (i.e. the whole thing) then I suggest they shine the torch on their own inactions in the HR department. Allowing any department to become a haven for bureaucratic policing is a failure in executing the right strategy. As Einstein said, “Bureaucracy is the death of all sound work."

As for the start-up. I stand by my advice. Sorry HR but in a start-up environment I believe it is a cost the business cannot afford.