A Handy Guide to ‘Management Bullshit’

Leadership Through Policy – KKR Case Study

Ken Mehlman has shown leadership through example recently, with his announcement to extend their green program to a fifth of their global portfolio. In doing so, these companies will reduce their environmental impacts in the areas of waste, paper, chemical use, and energy and water consumption in am measurable way. Ken Mehlman is a member of Kohlberg, Kravis, Roberts & Co. LLP, a private equity firm which recently sold shares to the public and became a listed company on NYSE.

Ken Mehlman is the man responsible for the global external affairs activities of the firm, and by extension, carries the responsibility in ensuring that their owned subsidiaries comply to a decent standard of ethics and social responsibility. After a brief pilot programme at 3 of its investments yielded successful results, KKR has announced that they will now engage one fifth of their portfolio in using the same green strategies. This is a significant move that is relatively unmatched across the breadth of the private equity industry, and therefore Ken Mehlman is a fine example of a leader who doesn’t wait for others to make a decision before acting.

Says the KRR founder in a recent discussion: “The business case for environmental management has never been stronger,”. “The Green Portfolio Program highlights that environmental performance and business performance can go hand-in-hand. We are very excited about the momentum to date and the fact that we have taken this effort global in such a short period of time.”

Cynics may argue that this fund is only engaging in ethical activities in order to attract capital from the ever-growing band of ethical-investors who limit their savings for only the most reputable and up-standing companies to invest in. I would disagree, firmly on the basis that such investors prefer to invest in shares on a one-on-one basis, and would not risk pooling funds into a Private Equity firm that could still spend its money wherever it liked.

So I give a hats off to Ken for setting a good standard that I hope will continue to extend across the KKR group and across the Private Equity industry as a whole!

CMI National Conference Promotional Code/Discount Voucher

Standard Pricing & Options (Starting from just £250)	Member (£)	Non member (£)
Full delegate	325.00	550.00
Conference day only	250.00	500.00
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Gold Medal Dinner table for 10 (20% discount for non members)	850.00	1000.00

Customer Relationship Management

What is customer relationship management, and why is it important to UK Leaders?

Customer Relationship Management, or “CRM“, is the way a business goes about creating, maintaining or even sometimes repairing the relationship it has with its customers.

The customers are the vital life-blood of any modern organisation. Customer-centric product development is a decades-old concept, but lately several new aspects of companies have become potentially large growth area when the customer-focused principles and tools of CRM are applied to them.

One of the key pillars of CRM is collecting useful data about your customers in a way that does not damage the customer relationship itself. This is what I will discuss today.

How can I collect information about my customers?

Collecting information can be done in many different ways, with some being far more thorough, and others can happen without the customer even realising!

1. Creating customer accounts.

Online services and business2business organisations will already force new customers to ‘create an account’ to make their intial purchase. Doing so will allow you to easily collect some basic profile data on your customer and track all their purchases. This information can be used to create a demographic view of your current customers. If you currently allow customers to anonymously purchase from you, without giving up any information about themselves whatsoever, you are at a competitive disadvantage, and I would recommend you to try and implement an account-orientated point of sale model in the near future.

2. Generating email lists.

Many small and large businesses such as restaurants have recently realised that using email marketing is affordable, easy and impressively successful in attracting repeat customers to their businesses. Simple ‘Free drink if you join our mailing list’ offers are quickly taken up by customers, and this can lead to a positive and lengthy relationship with the customer through making good use of email marketing tools. Enticing offers such as money off coupons makes can be sent to these subscribers for an extremely low cost, and will be read with far more enthusiasm than expensive leaflets through the door. A combination of interesting and genuinely tempting deals in  the emails will lead to a suprising good retention rate. The success of money-saving emails such as that produced by MoneySavingExpert.com shows that customers won’t generally perceive it as spam if it offers them good value. Once a sizable email list has been built up – it can of course be part of a coordinated customer relationship management strategy.

3. Keeping it simple – Writing it down!

Several businesses, including fast food chains, actually have their employees key in to their till; the nationality and estimated age of each customer they serve. Just these two simple bits of anonymous data are perfect for analysing WHO is actually buying your product. Are your prices putting off young students? Does your brand draw in customers from a diverse range of ethnic backgrounds? You will be able to find out the answer to these types of questions with only a few snippets of information.

Once the data has been collected – proper analysis can begin, which I may cover in a future blog post. Stay tuned!

Leader Of The Week – Lauren Smith

This is just a short post to share a proud shout-out for Leadership Expert’s leader of the week – Lauren Smith, nominated by a fellow collegue in her workplace.

Lauren Smith, an auditor for a large professional services firm, has demonstrated effective teaming while working with me this week, and so I have decided to commend her publicly!

Often in times of pressure in the workplace, leadership roles become rather liquid, and formal management titles begin to dissolve. This can result in new and un-tested team members being thrown into a position of responsibility and taken right out of their comfort zone, and this could have a negative or positive effect on the group. I’m happy to say that in Lauren’s case, she’s really brought a cheerful and kind spirit to the group, and I look forward to working with her in the future.

If you know of someone in your team or workplace that you believe has taken an excellent step in their leadership development. Why not contact me and commend them via this website also.

Simon Oates ~ Leadership Expert

“The Awakening” – Personal Development Essay

I thought I’d share with you today a famous essay written by an unknown author, which has been featured in many personal development books, but through the power of the internet, I can share with you today.

The Awakening

“A time comes in your life when you finally get…when, in the midst of all your fears and insanity, you stop dead in your tracks and somewhere the voice inside your head cries out…ENOUGH! Enough fighting and crying and blaming and struggling to hold on. Then, like a child quieting down after a tantrum, you blink back your tears and begin to look at the world through new eyes.

This is your awakening.

You realize it’s time to stop hoping and waiting for something to change, or for happiness, safety and security to magically appear over the next horizon.

You realize that in the real world there aren’t always fairy tale endings, and that any guarantee of “happily ever after” must begin with you…and in the process a sense of serenity is born of acceptance.

You awaken to the fact that you are not perfect and that not everyone will always love, appreciate or approve of who or what you are…and that’s OK. They are entitled to their own views and opinions.

You learn the importance of loving and championing yourself…and in the process a sense of new found confidence is born of self-approval.

You stop complaining and blaming other people for the things they did to you – or didn’t do for you – and you learn that the only thing you can really count on is the unexpected.

You learn that people don’t always say what they mean or mean what they say and that not everyone will always be there for you and everything isn’t always about you.

So, you learn to stand on your own and to take care of yourself…and in the process a sense of safety and security is born of self-reliance.

You stop judging and pointing fingers and you begin to accept people as they are and to overlook their shortcomings and human frailties…and in the process a sense of peace and contentment is born of forgiveness.

You learn to open up to new worlds and different points of view. You begin reassessing and redefining who you are and what you really stand for.

You learn the difference between wanting and needing and you begin to discard the doctrines and values you’ve outgrown, or should never have bought into to begin with.

You learn that there is power and glory in creating and contributing and you stop maneuvering through life merely as a “consumer” looking for you next fix.

You learn that principles such as honesty and integrity are not the outdated ideals of a bygone era, but the mortar that holds together the foundation upon which you must build a life.

You learn that you don’t know everything, it’s not you job to save the world and that you can’t teach a pig to sing. You learn the only cross to bear is the one you choose to carry and that martyrs get burned at the stake.

Then you learn about love. You learn to look at relationships as they really are and not as you would have them be. You learn that alone does not mean lonely.

You stop trying to control people, situations and outcomes. You learn to distinguish between guilt and responsibility and the importance of setting boundaries and learning to say NO.

You also stop working so hard at putting your feelings aside, smoothing things over and ignoring your needs.

You learn that your body really is your temple. You begin to care for it and treat it with respect. You begin to eat a balanced diet, drinking more water, and take more time to exercise.

You learn that being tired fuels doubt, fear, and uncertainty and so you take more time to rest. And, just food fuels the body, laughter fuels our soul. So you take more time to laugh and to play.

You learn that, for the most part, you get in life what you deserve, and that much of life truly is a self-fulfilling prophecy.

You learn that anything worth achieving is worth working for and that wishing for something to happen is different than working toward making it happen.

More importantly, you learn that in order to achieve success you need direction, discipline and perseverance. You learn that no one can do it all alone, and that it’s OK to risk asking for help.

You learn the only thing you must truly fear is fear itself. You learn to step right into and through your fears because you know that whatever happens you can handle it and to give in to fear is to give away the right to live life on your own terms.

You learn to fight for your life and not to squander it living under a cloud of impending doom.

You learn that life isn’t always fair, you don’t always get what you think you deserve and that sometimes bad things happen to unsuspecting, good people…and you lean not to always take it personally.

You learn that nobody’s punishing you and everything isn’t always somebody’s fault. It’s just life happening. You learn to admit when you are wrong and to build bridges instead of walls.

You lean that negative feelings such as anger, envy and resentment must be understood and redirected or they will suffocate the life out of you and poison the universe that surrounds you.

You learn to be thankful and to take comfort in many of the simple things we take for granted, things that millions of people upon the earth can only dream about: a full refrigerator, clean running water, a soft warm bed, a long hot shower.

Then, you begin to take responsibility for yourself by yourself and you make yourself a promise to never betray yourself and to never, ever settle for less than you heart’s desire.

You make it a point to keep smiling, to keep trusting, and to stay open to every wonderful possibility.

You hang a wind chime outside your window so you can listen to the wind.

Finally, with courage in you heart, you take a stand, you take a deep breath, and you begin to design the life you want to live as best as you can.”

I hope you take as much from this essay as possible. I think it holds many truths that every one of us needs to hear. You probably won’t find a single individual who actually lives by every single ideal listed here, so everyone has some room for improvement and something to gain from reading this essay!

I invite you to share the link to this page with as many people as you can to spread some positivity around the world right now!

http://www.leadership-expert.co.uk/the-awakening/

How To Avoid Information Overload – Case Study

Information overload respresents one of the greatest threats to a CEO’s productivity. The purpose of having a single, commanding ‘leader’ such as a managing director or CEO is to ensure that one mind has the ‘big picture’ of the company or project is sound. If the same leader becomes bogged down with day-to-day micromanagement of information and reporting, the consequences can be disasterous. However, if a leader chooses to select precisely the right information, success can be achieved.

Case Study Example: TheCarConnection.com

TheCarConnection.com is a car information website, containing for example, details of 2010 Volvo and Chevy HHR specs. Typing in a vehicle model such as Cadillac SRX will bring up reviews of the car, as well as detailed specifications and photo galleries. This serves as an excellent example of a vast quantity of information, that I can use to explain a leadership tip. The website contains all information you could possibly want in deciding whether to buy a car or not.

If you were a CEO in this situation, instead of approaching the website in a hands on way, looking through the pictures, expert reviews specifications etc one by one, you should assign subordinates to do so and report back to you in a way that will make comparison quick and easy. In TheCarConnection’s case, the format of the website itself actually makes it easy to compare vehicles, but in the real world – saving yourself time at the top can really pay dividends in the long term.

Stock Option Trading – Escaping Volatility In Modern Equity Markets.

I believe that managers should always be financially aware, and not ignorant of the economy and financial markets. I hope this post will serve as a simple introduction to stock options trading, to help raise that ‘general’ finance knowledge that all leaders should be armed with.

Stock option trading in ‘Put’ options can be used to remove risk from owning shares, or to speculate upon it. It is simply a financial instrument that allows the transfer of risk from the risk-adverse investor, to a risk-tolerant investor.

What is a Stock Option?

A stock option is an agreement between two parties, that one will be obligated to buy or sell a stock at a fixed price, should the other party choose to enforce the right. The two parties are called the writer and the buyer. The writer is the party obligated to buy or sell the underlying stock at a pre-determined price, and the buyer is the party that receives the right to force the other party to do so, and will pay a premium for this extra power.

A ‘Call’ option gives a speculator the right to purchase a share at a fixed price, and provides the opportunity for profit if the market price of the stock increases. A ‘Put’ option gives a risk-adverse investor the right to sell their share at a fixed price, which will represent the maximum loss they can make. It is this option that can be used to reduce risk faced by equity-owning businesses, and the mechnics of which will be explained below.

An Example.

Lets say a shareholder of Apple Inc is holding 1 share worth $10. This investor will be worried that the share price could fall considerably, and would like to pay a premium in order to eliminate the risk of it falling below $8.

This investor will want to buy a ‘Put’ option agreement that will give them the right to sell the Apple stock at $8 in one years time. If as long as the investor holds this right, then their maximum loss within the year is $2 regardless of how badly the share performs in the market, because if the stock drops to $5 in value, then the investor will take up the right and sell to writer for $8 and make only a $2 loss.

As mentioned before, this is not a win-win agreement. The buyer of the option will need to pay a premium of $1 (for example) to the writer to compensate for the transfer of risk. This means that the buyer is opting to face a guaranteed expense in order to protect against a significant loss. It is effectively an insurance scheme.

The writer, who is accepting a guaranteed $1 income but facing the risk of making significant losses if the market crashes, is clearly betting the the price of the share will remain at its current level, or drop by only a small amount, and that the option will never need to be exercised.

Complexity

It will become clear that options are complicated instruments compared to simply owning shares, and thus a thorough knowledge is needed to be able to value the right of an options and give an edge to the trader. Companies such as Trading Concepts Inc offer options trading mentoring that seeks to first educate investors before they enter this potentially lucrative market. It’s always a good decision to become immersed in something before commiting your business to a particular strategy. So I’d recommend that if hearing about options has triggered an interest, then you do some research and learn more!

Do Leaders and Credit Cards Mix?

If a CEO is flashing the plastic, is he improving morale?

When I speak of leaders and credit cards, I am of course talking about the way in which senior managers rack up expenses during the course of business, paid for by the ever popular business credit cards, whether they’re an Amex, Mastercard or VISA, the affect is the same.

Why are company credit cards used?

Credit Cards are often offered to senior managers because they allow them to get on with their job without having to worry about using up their own cash (or having cash difficulties) in paying for business expenses that will be ultimately paid back by the company. These pieces of plastic also give prospective clients the impression that the company is very generous and willing to spend whatever it takes to win their custom. It comes as now surprise then, that these credit cards are associated with the wining and dining of clients, and smoozing in general. Not a brilliant image from the point of view of employees.

Are There Downsides?

Especially employees who would have their own applications for a credit card flatly rejected based on their position and rank. As a result, company credit cards can, and often do, become the source of tension between lower and upper management, further crystalising a ‘them versus us’ culture.

The credit cards also encourage over-indulgance. The same greed that is often cited as the cause of the credit crisis and late recession – a topic that is still on the minds of the public, your employees, and even your clients. To be using a company credit card in a luxurious or indulgent manner is to make the statement that ‘We are financially strong even in a recession’, which could have both positive and negative effects.

The positive signalling effect is clear – clients wish to place their business with providers whom they believe with still be around next year. However employees who may have survived a recent round of redundancies may be shocked and disgusted if they see a manager paying for a 4 or even 5 star hotel with their company credit card. While many business indulgences are actually necessary to create a brand image and encourage a client or customer to buy; excess can lead to a mis-balance of the priority of brand image, versus the raw budgetary restrictions of a company.

What’s The Solution?

An extremely professional approach should be taken with credit cards. It can be very difficult to remain formal and strict with senior managers, because of the company’s desire to keep them happy. But in tough times, everyone must bare sacrificies, and the flamboyance with VISAs should be curtailed as part of an overall re-evaluation. All expenses should be subject to audit, and the threshold for audits should be at an amount no greater than £20. Even £15 items purchased by credit card, can, in reality be wasteful and sending out the wrong message.

Article Written By Simon Oates December 2009