Wednesday, October 31, 2007

Who will be the next CEO of Merrill Lynch

“Contenders in the running for Stan O’Neal job at Merrill's”

Gregory Fleming

The co-president of Merrill Lynch is well liked in the group and was a key architect of its takeover of BlackRock. He made his name at Merrill doing financial deals, such as the $14.5 billion merger between Wachovia and First Union. However, he does not have the operational experience of running a large investment bank

Laurence Fink

The king of Wall Street’s chief executive shortlist, Mr Fink has previously been viewed as a key contender for the top jobs at Morgan Stanley and Citigroup. Mr Fink runs the BlackRock investment firm, which is 49 per cent-owned by Merrill Lynch. It has extensive interests in mortgage-backed bonds, the main source of the group’s woes and in which it has lost a number of senior executives

John Thain

The chief executive of Euronext NYSE would appear to be the top external candidate for the job. He is a well-regarded chief executive with experience running a big company on Wall Street. He is also a former president of Goldman Sachs, one of the most formidable operations in the financial world

Bob McCann

As head of Merrill’s brokerage unit, Mr McCann has not been tainted by the bond fiasco and retains his credibility. He is well liked within the firm, although he does not have Mr Fink’s deep knowledge of the bond market

Source: Times

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Monday, October 29, 2007

Merrill Lynch chief Stan O'Neal is toppled in wake of $7.9bn writedown

“The knives are out, but who's next for the chop?”

Merrill Lynch, one of the world’s most powerful banks, is preparing to announce the resignation of its chief executive after Stan O’Neal finally succumbed to pressure from the group’s board to leave. The bank’s board has yet to decide on Mr O’Neal’s successor despite being locked in talks over the weekend about the management of the group.

Source: Times October 29, 2007.

Mr O’Neal’s departure comes after the bank announced its worst quarterly loss last week and after his secret merger approach towards Wachovia, a bank almost double its size, without telling the rest of the board.

It is thought that one of Mr O’Neal’s main assassins was Armando Codina, the Cuban billionaire, close ally of President Bush and chairman of Merrill Lynch’s nominating and corporate governance committee.

Mr O’Neal is said to have spent yesterday afternoon negotiating departure terms. Although he is not contractually entitled to a severance package, he is expected to walk away with at least $159 million (£77 million). Merrill Lynch’s compensation committee also has discretion to offer severance pay.

Mr O’Neal, who is 56, is entitled to a retirement benefits fund of $30 million and $120 million in shares and share options. It is estimated that in his five years as chief executive Mr O’Neal has received about $160 million.

It is thought that the Merrill Lynch board will seek a replacement for Mr O’Neal within and outside the bank. Laurence Fink, head of BlackRock, the fund manager part-owned by Merrill, has been named as a favoured candidate but he is not thought to have had many formal conversations with the board as yet about his candidacy.

Gregory Fleming, the Merrill Lynch co-president, has also been named, as has Bob McCann, head of the bank’s brokerage arm.

Externally, John Thain, chief executive of the New York Stock Exchange, is seen as an attractive candidate because of his past experience as co-president of Goldman Sachs.

Mr O’Neal was reported on Friday to have been expecting to be out of a job this weekend. Merrill executives were thought to have been livid that Mr O’Neal had telephoned Ken Thompson, the head of Wachovia, about a possible merger that would have valued the combined group at about $140 billion, with Wachovia by far the bigger partner. The rest of Merrill’s board were not informed of Mr O’Neal’s intention to approach Wachovia. Although a number of the executives on the board were appointed by Mr O’Neal, there is believed to be a sense of frustration about the bank’s losses and Mr O’Neal’s role.

Merrill Lynch shares have lost about a third of their value since the beginning of the year. Last week the bank admitted that bad investment decisions – primarily in bonds backed by sub-prime mortgages – had forced it to write off $7.9 billion, plunging it into its biggest quarterly loss. Wall Street analysts reckon that losses will deepen as the market for the mortgage-backed debt deteriotates.

Daniel Tully, a retired chief executive of Merrill, yesterday described its predicament as sickening. He said: “I’ve been in touch with many, many of our fellow employees and ex-employees and they’re sick, everyone is sick about it, as I am too. It’s awful.”

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Thursday, October 25, 2007

Top ten signs you’re losing IQ

Egonomics borrowed from Dave Marcum and Steve Smith, the authors of egonomics

... Sit in a meeting with a technology team, and you’re likely to watch a battle of intellect. While that raw, IQ horsepower is what drives better ideas, without knowing it those same teams also lose curiosity and group intellect because they mistake being analytical/critical for being progressively smart. In their individual “debates” and battle of wills, they lose group IQ. Once they cross that line, the best idea winning is at the mercy of whose idea wins. And the company lives with the consequence.

“Top 10 signals you’ve crossed the line from contributing expertise to showcasing it”

1. Remind people of your experience frequently.
2. Share strong opinions on most topics, regardless of expertise or experience.
3. Lead with answers rather than questions.
4. Frequently feel impatient with others.
5. Dominate discussions or projects with people who have similar talents.
6. Micromanage to be involved in everything.
7. You’re the only one that has the necessary expertise or experience.
8. No one speaks up when you lead a meeting.
9. You occupy most of the time in most conversations.
10. You take far too long to make your point(s), or repeat them frequently.

Ten truths to prevent crossing the line; or get back the right balance of ego and humility:

1. Just because you once knew, doesn’t mean you still do (or always will).
2. People without your “status” (position, title, degree, etc.) aren’t necessarily less experienced or intelligent.
3. If you’re always outlining your expertise, you’re not learning anything new.
4. Position/title doesn’t mean superior experience, intellect, creativity, etc.
5. Promotion doesn’t mean you’re suddenly smarter than others.
6. Colleagues may already know what you’re talking about.
7. Your opinion isn’t absolutely necessary or even desired every time.
8. Most talents aren’t more or less important than others—just different, depending on the situation.
9. Your talent isn’t wasted if it isn’t used/needed in every situation.
10. Your experience doesn’t mean you’ve learned all the necessary lessons there are to learn.

Ten emotions/attitudes to watch for that you (or someone else) crossed the line:

1. unappreciative
2. invincible
3. self-satisfied
4. controlling
5. contempt
6. patronizing
7. intolerant
8. impatient
9. autocratic
10. condescending

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So you want to be a millionaire

Liz Pulliam Weston on MSN USA writes ...

“So you want to be a millionaire. Me, too -- in fact, I'm already there, and so are a lot of folks who shun lightning-strike fantasies about wealth.”

Liz says ... that a million ain't what it used to be. But that's nothing new. Except for brief periods of deflation, such as during the Great Depression, the generally rising level of prices has always chewed away at the value of a buck. That means you need $1.85 million today to match the buying power of $1 million in 1986, or $7.44 million for the equivalent of a million in 1956. Still, reaching the million-dollar mark put us in the top 10% of all U.S. households. (The minimum net worth to join that 90th percentile, according to the Federal Reserve's latest Survey of Consumer Finances was $831,600 in 2004.) In global terms, we're near the very pinnacle of wealth when you consider that billions of people live on just a few dollars a day.

Wealth Strategy:
- Make financial security a priority.
- Spend less than we earn.
- Save and invest regularly.
- Pay down our debt.
- Own a home.
- Maximize our incomes.

You've got to want it -- and plan for it.
Read Full Article

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Tuesday, October 23, 2007

Only Those Who Do It Can Teach You How

Ricardo Bellino the Brazilian Entrepreneur has a new book out.

You Have 3 Mintutes ... Is it really possible to learn something from a book like this ...”

Extracts from Richard Bellino ... These are professionals whose examples inspire me and continue to inspire me. Being able to live with these mentors has provided me with an invaluable learning experience. With them I was able to learn what is not taught in school; practical lessons in life and work that showed me how to overcome obstacles and succeed. Donald Trump was one of those people. When I looked him up to sell him my idea about building a real estate venture in Brazil, I was given a true lesson in how to negotiate. This lesson, incidentally, was motivation I put to good use when I wrote a book called You Have 3 Minutes! Learn the Secrets of the Pitch from Trump's Original Apprentice. When Trump speaks about things like thinking big or being passionate about what you do, skeptics rush to accuse him of creating a list of obvious ideas. The fact of the matter is, there is no secret and bombastic ingredient capable of making someone an instant success. From this perspective, the greatest revelation in Trump’s book is to show that the ingredients for success are always the same: determination, passion, enthusiasm, effort, and hard work. How to manipulate them and use them in your favor, with utmost efficiency, is what really makes the difference. And that is something only those who do it can teach.

Source: Trump University, read full article

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Friday, October 19, 2007

A life coach in your pocket

Imagine your life and work so tightly entwined you lose track of the boundaries and ... imagine a digital device that keeps track of your behaviour patterns whatever next? Its ironic to actually call this prototype device a personal coach when in fact the very things it prompts you to do are commonsense. Mmm this is a gadget that works well for medical situations but in everyday life, what are the benefits and at what cost do we want to stop thinking for ourselves?

“Imagine a world where a device in your pocket lets you know whether you are managing your time well, talking too much on a sales call, or getting enough sleep.”

And imagine that device being used to deliver on-the-job learning at the point of need — helping to develop employees by allowing them to set specific goals, then giving them objective measures of whether their behaviour patterns match the goals they've set.

Sounds like science fiction? As is often the case these days, the idea is closer to reality than you think. Accenture Technology Labs has developed a prototype Mobile Personal Services Platform (MPSP), which makes it possible to develop applications that can transform a mobile phone into a customised personal coach.

This platform has been enabled by two technological trends: the dramatic increase in the capabilities of mobile smartphones, and the emergence of small, wearable sensors that can be used with these devices to provide data about a user's body, behaviour and physical environment. Our prototype software uses these technologies to give people personalised feedback and advice on everything from nutrition to the art of conversation.

Beyond the workplace

This technology is still some way from coming to market. But when it does, it will have important implications for workplace training and personal self-improvement. Consider how it could provide the coaching that a diabetic might need on the diet and medication regime needed to manage the disease, and even guide that person to the closest (or cheapest) chemist if their medication is running low. The scenarios for which MPSP will enable content providers to deliver next-generation personal services to mobile phones are as varied as the sections in a book store.

A word in your ear
The Palo Alto labs team has been exploring the possible applications of this technology both in the workplace and beyond. The first prototype coaching module we developed is focused on making people more effective in professional conversations, such as team meetings, sales calls or negotiation sessions. Software running on the phone collects voice streams and location data. Wireless connections send the data from the participant's phone to a server that integrates and analyses the data, fusing information from various devices to create a meaningful picture of the conversation.

The system then matches the observed behaviour against performance goals in near real-time, and makes suggestions about how to better achieve behavioural targets. These suggestions can then be relayed to the user, either on the phone's screen or by whispering advice into the user's headset, depending on the user's preferences.

The prototype also generates more detailed feedback for later review on a computer — meaning that a salesperson could sit down at his PC at the end of the day and review his performance, including getting detailed analyses of trends and correlations across all his meetings. For example, it might show that he was more effective in meetings held early in the day, but tended to drone on or interrupt too much in the afternoon.

Sensitive and omnipresent
The mobile phone has ceased to be just a phone. MPSP is part of the next wave of mobility innovation, which will exploit the mobile device as a means to deliver a wide array of innovative services enabled by its constant presence on your body, and its growing awareness of your physical environment. This will enable companies to serve their customers better, help employees improve their professional effectiveness, and allow consumers to adjust their behaviour to achieve personal objectives.

It will also turn the mobile device — which has evolved into a powerful wearable computer complete with ever more sophisticated wireless sensors — into a new type of service channel, personalised to the immediate context and needs.

With the advent of the new generation of mobile platforms and applications, the challenge now is to explore how this can improve the way we work and live; for example, by enabling people to develop a better understanding of their own behaviour, they can begin to improve their personal and professional effectiveness.

As a result, these services could take human performance enhancement to a new level. Traditional training teaches the right thing to do — and then hopes that the trainee executes it correctly (the "say and pray" technique). In contrast, the personal performance coach can measure behaviour against goals, and then alert the user when the execution is veering off course. The technology will eventually go beyond tracking simple conversation patterns, to helping users see subtler cross-contextual issues. For example, it might help a user realise his behaviour becomes less effective when he skips lunch, or that he interrupts people less after a good night's sleep.

Taking mobility further
We can foresee companies in a wide variety of industries exploiting the enhanced awareness of the body, behaviour and physical environment afforded by these devices, and using it to help their employees improve their personal performance or lifestyles. For example, a healthcare company might offer a service that would help someone detect if they were eating healthily, meeting exercise goals they'd set for themselves or suffering from higher blood pressure than normal, and would then make real-time suggestions to address the problem.

The next step for us is to help content providers develop applications, and to provide the necessary back-end data services.

As technologies such as MPSP mature, they will help companies improve productivity, operate more intelligently and capture new market opportunities. But perhaps their greatest impact will be at the individual level, by helping people to become more effective — whether they are trying to develop into more successful negotiators or enjoy happier, healthier lives.

Source: Alex Kass is a researcher at Accenture Technology Laboratories, California.

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Thursday, October 18, 2007

Buy Side Firms To Spend $586 Million on Research Tools

Technology Insight ...

“TOWERGROUP: Global Buy-Side spending on research technology will reach $1.1 BILLION by 2010”

The Tower Group Buy-side research has become a complicated process that aggregates internal analysis, broker research, independent research, outsourced analysis, and the use of other research tools. As a result, investment managers are demanding automation to better manage their expanding research operations and integrate information from multiple sources. As these changes move through the buy-side, brokerage firms are also increasing their focus on automating their research offerings in a bid to drive greater cost efficiencies and more effective distribution of both proprietary and third-party research.

TowerGroup estimates global buy-side spending on research technology will increase at a compound annual growth rate (CAGR) of 22 percent, from $586 million (USD) in 2007 to $1.1 billion by 2010. During this period, U.S. spending will more than double from $372 million to $692 million, while European buy-side firms spending will increase by 20 percent from $144 million to $257 million. Asian spending will also rise substantially, but will remain at one-fifth that of U.S. buy-side firms.

What types of technology are these firms buying? The report identifies six categories of research tools: intelligent search and data mining, research performance measurement and management, fundamental data (eg data aggregation), trading idea platforms, research management, and commission allocation and management systems.

The advances in Web-based technology - XML-based tagging, application service providers (ASP), Web 2.0, and portal technology - will have enormous application to automating the research business. TowerGroup believes this use of technology will affect the research business in three ways:

# Alter the cost structure of research departments as human staff is augmented with (and often replaced by) automated systems to perform research
# Change the economics of the research business, allowing brokerage firms to reduce their cost base in providing research
# The wide-scale use of technology will enhance returns for investment managers and add to alpha generation as markets become efficient.

Source: Tower Group October 17, 2007

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Tuesday, October 16, 2007

Taste Spain October 12-19, 2007

Events in London ...

“Taste Spain – a citywide celebration of Spanish food and culture.”

Borough Market is getting a complete overhaul, with Spanish entertainment running over the two days, including Alvaro Costa & Hot Band from Galicia, Xeremiers from Balearic Islands and a flamenco-breakdancing show from Madrid. Barcelona’s famous La Boqueria market will be setting up alongside stalls representing nine of Spain’s top gourmet regions, with an emphasis on fresh produce and unique wines. A giant Valencia paella will be prepared on Thursday evening. The 'Taste Spain' event marks the English translation release of Spain’s bestselling cookbook, 1080 Recipes by Simone and Ines Ortega. The book will be available to buy at most of the events part of Taste Spain

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Monday, October 15, 2007

Hedge Funds in Hollywood

“TV and movies have rediscovered Wall Street. Time to sell!”

Popular culture, which is created by some of the least business-savvy people on the planet, has always been slow to latch onto business and economic trends. The covers of large-circulation magazines are a good contrary indicator. And TV, movies, and books are even worse. Twelve to 15 months can elapse between the first formal pitch of a new sitcom and the debut of the pilot. With movies and books, the lead times are even longer. By the time the film hits the multiplex or the book shows up on Amazon, the business phenomenon it describes has frequently gone bust - the business phenomenon it describes has frequently gone bust—which is why hedge-fund managers and their investment-banking cousins should be very worried about the onslaught of Wall Street-themed pop culture. Full Article
Source: Daniel Gross "Slate MoneyBox"

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Glossy Gossip Rag-Mags for 52 pound

Quirk of the Week:

“UK is being flooded with the release of one a month Glossy gossip rag-magazines ...”

Is it me or is the UK being inundated with glossy gossip mags. Every which way you turn the TV adverts, newspaper and book stands are stacked high with same a-to-c list gossip that already being broadcast across the internet and covered by the top-end glossies like Hello, Grazia, and Glamour. So the cost of reading replicated news that comes across with its own blend of superficiality, envy, cattiness, mockery of the everyday lives of a-c list celebs with the non-celeb issues thrown in for good measure, are these gossip rag-mags worth the paper they are printed on. Considering they cost one pound an issue, and if bought over a 4 week period for a year that's (52 pound) half the cost of colour TV licence. What else could you buy with 52 pounds, and that's not to say you buy just the one title with so many to choose from. We seem to be swampted with so many new ones advertised bi-monthly, I've lost count ... Are these rag-mags a worthwhile read or just re-churned news that can be read for free if you scour the internet.

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My Journey to the Top

“Eleven women with big dreams from many different backgrounds. The path to power meant facing obstacles and their biggest fears ...”

Women still have an uneasy relationship with power and the traits necessary to be a leader. There is this internalized fear that if we are really powerful, we are going to be considered ruthless or pushy or strident—all those epithets that strike right at our femininity. We are still working at trying to overcome the fear that power and womanliness are mutually exclusive. Aleksandr Solzhenitsyn says "If you want to change the world, who do you begin with, yourself or others?"
Full Article

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Monday, October 08, 2007

Men can have Women brains

“Some researchers say that men can have 'women's brains' and that women can think more like men.”

Michael Mosley of the BBC OneShow takes a look at this phenomenon step by step, with a new feature every day of this week, you can take the Sex-ID test, a series of visual challenges and questions used by psychologists to determine the predominant gender of your brain.

* Get a brain sex profile and find out if you think like a man or a woman.
* See if you can gaze into someone's eyes and know what they're feeling.
* Find out why scientists are interested in the length of your fingers.
* See how your results relate to theories about brain sex.

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Best Companies To Work For

“Best 25 of the 100 Companies to work for”

Times Online has ranked W L Gore & Associates as #1 in The Sunday Times 100 Best Companies to Work For survey for the fourth year running.

2007 2006 Employer Sector
1 (1) W L Gore & Associates Manufacturing
2 (2) Sandwell Community Caring Trust Health
3 (3) Pannone Legal
4 (4) Beaverbrooks the Jewellers Retail
5 (NEW) Hydrock Engineering
6 (NEW) Edward Jones Financial services
7 (5) Data Connection Telecommunications
8 (11) Denplan Health
9 (NEW) Napp Pharmaceutical Holdings Pharmaceutical
10 (31) Heat Services
11 (NEW) Handelsbanken Financial services
12 (78) Hill McGlynn & Associates Recruitment
13 (43) Camelot Group National lottery operator
14 (8) Office Angels Recruitment
15 (NEW) Hydrogen Recruitment
16 (14) Drivers Jonas Property
17 (16) King Sturge Property
18 (NEW) Steer Davies Gleave Transport
19 (NEW) Bravissimo Retail
20 (NEW) Totemic Financial services
21 (20) Admiral Group Insurance
22 (34) Robert Half International Recruitment
23 (15) Bacardi-Martini Food & Drink
24 (13) SThree Recruitment
25 (7) Badenoch & Clark Recruitment

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Jobs Squeeze Hits London Financial Services Sector

“Double Whammy of Job Cuts and Lower Bonuses for 2007 est. total 7.4bn”

CEBR prediction for 2008 an estimated 6,500 job losses for 2008 following the recent stock market turmoil. Significantly in the Investment Banking sector (2,300), Fund Management (1,600), Securities (1,200), Derivatives / Foreign Exchange (700).

CEBR forecast "One job will be cut for every two new ones created" as we enter 2008, worst affected is the City.

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Friday, October 05, 2007

CIO as Chief Process Officer

Michael Hammer quotes "CIOs don't typically lead corporate transformation, but they're well positioned to help guide business process and improvement changes, says Michael Hammer, original champion of the business reengineering movement. Hammer labels the CIO the enterprise's chief process officer"

“CIO as Chief Process Officer, Not Strategic Leader”

Bestseller Reengineering the Corporation: A Manifesto for Business Revolution (HarperCollins, 1993). Companies could radically improve their performance if they rethought and rebuilt their processes, spurred the transformation of businesses around the world. A former computer science professor at Massachusetts Institute of Technology, Hammer heads Hammer and Co., a management consultancy that specializes in business process.

Hammer sees the chief information officer well positioned in the enterprise to be a catalyst for corporate transformation. While he argues that process management improvements must be led by senior, business-line executives, he says CIOs can play a pivotal role as chief process officers.

A chief process officer, Hammer says, is an organization's chief of staff for process work, the center of its expertise and the keeper of its skills and methodology. Michael Hammer's interview with CIO contributing editor John McCormick, expands his idea and insights into how CIOs can be effective chief process officers. Edited version of their conversation continues here

CIO INSIGHT: We've been studying process management and process improvement for years, but it seems many companies flounder when trying to figuring out how to improve their processes. Why is that?

MICHAEL HAMMER: Many organizations have made a lot of progress. It's also important to distinguish between process improvement and process management. Without getting too technical, process improvement is not as hard to do because it doesn't involve much organizational change. Process management, on the other hand, involves a lot of organizational change, and that's fundamentally what makes it hard to do.

The issue with process management is that it requires new managerial responsibilities in the organization. Someone has to take responsibility for processes that cross organizational boundaries. The title we often use for this role is process owner. And the challenge is that the process owner takes authority away from functional managers.

That doesn't happen so much with process improvement because functional managers can make their own local improvements. But process management really entails a transfer of authority from functional managers to process owners, and that's a very difficult shift.

Because it involves so much fundamental change, this only can happen if it's driven from the top of the enterprise. This is not something that happens bottom up. And the problem is that in a lot of organizations the senior leadership is distracted by other things, unfamiliar with these ideas, and so is unready to do anything about them, or not focused on operational issues because they're accustomed to business being easy over the last several years.

In a variety of ways—not just because of the credit problem [collapse of the subprime mortgage industry]—it's a much tougher time in business. And I think this is directing more and more people to pay attention to operations generally and their cross-functional processes specifically.

CIO As a Catalyst Not a Leader CIOs usually have a pretty good view of the corporation and understand how processes work. Are CIOs better able to effect these types of business management changes compared with other executives?

HAMMER: In general—there are exceptions to everything—the CIO is not in a position to drive and lead this effort. It can only be done by a senior, business-line executive.

But the CIO is extremely well positioned to be what I call a catalyst, where the CIO—because IT sits outside the various functions—really has a bird's-eye perspective on the process issues in the enterprise.

In fact, a lot of these process issues often show up in systems terms. And the CIO can really be the catalyst to alert senior executive management to the problems with processes and to the opportunities that process management presents.

Once an organization gets going with processes, the CIO often becomes what I call the chief process officer. The chief process officer is not the boss of the process owners. The chief process officer is sort of the organization's chief of staff for process work, the center of expertise, the keeper of skills and methodology. And we see more and more organizations where the CIO takes on this additional role of chief process officer.

If you're the chief process officer—the change agent within the company that's bringing about these process management improvements—where do you start?

HAMMER: The first thing to do is to assess your readiness as an organization to proceed. Do you have the leadership? Do you have the right culture in the organization? And if not, you have to start working on those gaps.

What you need to do is identify your processes. If you don't know what they are, you're nowhere.

You also need to do a major assessment of those processes in terms of some key issues: What's the status of the design of that process? Do you have one? Is it a good one or not? What about the metrics? Do you have end-to-end metrics or not? Do you have a process owner or not? Do the people who work in the process understand it? Does your infrastructure, which includes your IT systems, support the process?

Based on that audit, you've identified what issues you need to work on. And so you say, "OK, I'm pretty good in process owner, not good in process metrics. Let me work on process metrics."

Process and Enterprise Maturity Model This audit is embedded in something you call the Process and Enterprise Maturity Model, a tool that helps companies plan and manage business transformations. Please explain PEMM ...

HAMMER: There are two parts to it. One is the maturity of your enterprise. The other is the maturity of individual processes.

The first thing you do is set up the maturity of your enterprise. There are four things you look at there. Do you have knowledgeable, committed leadership at the executive level? Do you have a corporate culture that supports process? Do you have institutionalized expertise in the organization? Do you have a governance mechanism for managing process projects?

You use the model to identify any gaps and weaknesses. If you have them, you need to address them, because you won't get anywhere on your process without that.

That'll lead you, for instance, to say, "Gee, I need to strengthen my leadership." Then you, the CIO, would deal with your executive team, educating them, communicating with them, getting them to understand the problems that poor-performing processes lead to and so on.

Once you've made progress in understanding where you are enterprisewide, you can begin to use the process part of it—namely, looking at individual processes and asking yourself: Do we have owners for them? Do we have designs? Do we have metrics and so on? That gives you a plan for how you go about filling those gaps.

How and what exactly do you measure? That's always one of the toughest things for corporations to figure out. As you pointed out in previous works, a lot of companies do that poorly.

HAMMER: Yes. Metrics are a big problem because most metrics are functional, historical and financial. Those aren't the kind of metrics we need. We need real-time, or at least current, metrics, we need end-to-end process metrics, and we need metrics that measure much more than financial performance, but things like speed, customer satisfaction, quality and the like.

I wrote an article for the Spring 2007 [MIT] Sloan Management Review called "The Seven Deadly Sins of Performance Measurement and How to Avoid Them." It provides some guidance on how to develop metrics.

Basically you need to identify your key strategic business goals and which of your processes impact those goals.

So, for example, being first to market with new products is a strategic goal; the processes that impact that are things like product development. Speed or product development becomes the key metric you have to focus on to achieve your strategic objective. That's a real crude summary of what that article suggests.

Good and Bad of Metrics The Sloan Management Review article says many of the metrics we use are worthless ...

HAMMER: Organizations, to be blunt, really screw this up a lot.

It's mind-boggling how bad most organizations are with metrics. It's just shocking. You would think this is something they would have fixed a long time ago, but it's a persistent problem.

It seems that corporations consistently fall back into the seven deadly sins you define: vanity, or measuring just what you're good at; provincialism, or measuring just your department's part in a process instead of the entire process; narcissism, or measuring corporate goals instead of customer satisfaction; laziness, or not taking the time to figure out what should really be measured; pettiness, or measuring just small pieces of a process; inanity, or not considering the drain your measurement will have on the organization; and frivolity, or not taking measurements seriously.

HAMMER: They continue to make these same mistakes because those mistakes are a consequence of a lack of executive attention to the issue, complacency, not focusing end to end.

I know some organizations that have done a terrific job, but a lot still have a long way to go.

There's a number of business process management software tools on the market. Do they help, and if so, how much or how little?

HAMMER: My attitude about the business process management software is that it won't hurt, but it's not going to do you all that much good.

The critical elements in success with process are executive leadership, creativity to come up with new ideas, the management of change and the management of complex implementation. None of these have much to do with software tools. Yes, BPM software can help you model your processes, can help you in some cases simulate them, and in some case will allow you to create real-time support systems for your processes. It can't hurt. But it's not the difference between success and failure, not at this stage, at least.

Other software tools help organizations get a handle on their processes: knowledge management tools, business intelligence tools. Don't they all have a place?

HAMMER: Yes, but again, they are components that can support you in a process management effort.

My attitude is the same about them. They can't hurt unless you put too much attention on them and if you delude yourself into thinking they make the difference between success and failure.

Process First, Technology Second How important is making sure people are ready to adapt to the change? Obviously, that plays a huge role in any process ...

HAMMER: It does. The problem is, a lot of organizations don't want to bother with it. They think it's easy. They think it's not important.

What it really requires is sort of empathizing with people in the organization and what they're experiencing, communicating with them much more than you think you need to, listening to their concerns, giving them support during a transition, showing them you're absolutely committed, readjusting the reward system to encourage them. And, it's very doable. It just requires serious commitment.

Giving them the tools so they can do their jobs better.

HAMMER: Precisely. Training, education and tools.

If you talk to a group of CIOs who want to be catalysts for business process management, business process improvement, what are the two or three things you would tell them to do?

HAMMER: No. 1, educate yourselves about it. Make sure you really understand it, not just know a few catchwords.

Secondly, start working on getting the senior executive team comfortable with the concept, which often includes taking them on a visit to other companies that are doing well with it.

And, certainly, start pilot projects right away, because you need pilot projects to demonstrate to the organization that this stuff really works.

I'm reminded of an article you wrote about a retailer that wanted to find out how many people who went into its store bought something. They just hired a bunch of kids to count the people who went in and then count the ones who came out with something.

HAMMER: Right. They were measuring the percentage of customers who actually bought something.

There is a temptation among people in the IT world to look for technological solutions before they're needed.

Look, I used to be a professor of computer science at MIT, so it's not as though I'm afraid of computers. But I know people who will use a computer to do something as long as it's not too much more awkward than doing it manually. So somehow using a computer is a virtue in itself.

A good rule of thumb—it's not always doable—is try to implement new processes without technology, and afterward bring in technology to boost them rather than make them dependent on technology out of the box.

Isn't that almost the reverse of what companies do today?

HAMMER: Yes, but the companies that take the approach I just described are often very successful with it because it gets clarity about their processes. Otherwise, you end up with what I call paving the cow path; you're overlaying new technology on a bad process.

Which companies are the best at process management? You've mentioned some, such as Air Products and Chemicals, in your work. Could you name a couple more?

HAMMER: There are quite a lot. Naming 20 would be easy. Naming just two or three is hard. A few, off the top of my head: Shell; PepsiCo, especially in Latin America; and Tetra Pak, a company based in Europe that makes packaging equipment.

What characteristics make them successful?

HAMMER: Overwhelmingly No. 1 is executive commitment. Second is "thoroughgoing"—in other words, they did it by the book and they addressed everything that needed to be addressed. They didn't leave stuff out. Those probably are the two most important things

Empathezing with People How important is making sure people are ready to adapt to the change? Obviously, that plays a huge role in any process ...

HAMMER: It does. The problem is, a lot of organizations don't want to bother with it. They think it's easy. They think it's not important.

What it really requires is sort of empathizing with people in the organization and what they're experiencing, communicating with them much more than you think you need to, listening to their concerns, giving them support during a transition, showing them you're absolutely committed, readjusting the reward system to encourage them. And, it's very doable. It just requires serious commitment.

Giving them the tools so they can do their jobs better.

HAMMER: Precisely. Training, education and tools.

If you talk to a group of CIOs who want to be catalysts for business process management, business process improvement, what are the two or three things you would tell them to do?

HAMMER: No. 1, educate yourselves about it. Make sure you really understand it, not just know a few catchwords.

Secondly, start working on getting the senior executive team comfortable with the concept, which often includes taking them on a visit to other companies that are doing well with it.

And, certainly, start pilot projects right away, because you need pilot projects to demonstrate to the organization that this stuff really works.

Source: CIO Insight October 3, 2007

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Thursday, October 04, 2007

Workplace Taboos: Are You Guilty?

Six Top No-No's

“Workplace Taboos: Are You Guilty?” Survey is in ... Smooching co-workers, consuming alcoholic beverages and spreading rumours about colleagues are all considered workplace taboos, according to a new survey. Thirty-five percent of those surveyed have puckered up with a co-worker and 31 percent have tipped the bottle while on the job. Not to mention the 19 percent of workers who have spread a rumor about a fellow employee.

Workplace taboos workers have committed include:
Falling asleep at work (42 percent)
Stealing from the office (21 percent)
Snooping after hours (17 percent)
Lying about an academic background (4 percent)
Taking credit for someone else's work (2 percent)

"As companies continue to embrace more casual environments, employees may develop a false sense of informality when it comes to the office behavior," says Rosemary Haefner, VP of Human Resources at "Employees should make sure they are aware of company policies, so something that initially seems 'harmless' doesn't end up negatively impacting a career."

Noted in America industries

Certain industries reported engaging in office taboos more frequently than others. For instance, nearly two-thirds (63 percent) of government workers admit to having fallen asleep on the job compared to just 31 percent of all retail workers. Twenty-five percent of hospitality workers snooped around the office after hours compared to 15 percent of healthcare employees.

Check out how the following industries weighed in on these office taboos:

1. Falling asleep at work
When Michael F. was having trouble with his cable service, a technician came out to fix the problem. After waiting on the phone with the support team for over an hour to activate the new modem, the technician fell asleep -- on Michael's couch.

Forty-one percent of sales representatives have snoozed on the clock, along with over half (51 percent) of all information technology (IT) workers surveyed. Another 43 percent of healthcare and hospitality workers have dozed off at their desks, along with 41 percent of those employed in banking and finance.

2. Kissing a co-worker
The aforementioned kiss between Jim and Pam didn't initially fare well for their work relationship -- in fact, shortly after, Jim transferred offices completely. OK, things worked out for them in the end, but not before Pam called off her wedding with Roy, Roy tried to attack Jim and was fired, and Jim entered into an ill-fated romance with co-worker Karen.

More than half (52 percent) of hospitality workers and 38 percent of all retail workers have smooched with a co-worker, according to the survey. Just 33 percent of education workers have puckered up compared to nearly half (47 percent) of IT workers.

3. Drinking alcohol on the job
In February 2007, CBS 2 News launched a hidden camera investigation that caught several construction workers drinking beer and whiskey on their lunch break before heading back to work. Despite safety issues and lack of concentration after drinking, startling percentages of workers have tipped the bottle on the job.

Sales representatives led the industries surveyed with 30 percent of workers admitting to knocking back a few at work. Twenty-six percent of banking and finance employees have drank on the job, along with just 12 percent of healthcare workers.

4. Stealing from the office
Anthony Zuniga, 53, was recently arrested and imprisoned for stealing 5,937 Netflix DVDs and 1,497 Blockbuster DVDs from the mail when he worked as a U.S. postal worker. While most employees are nabbing staplers and pens, it's stealing all the same.

All industries surveyed admitted stealing from the office within five percent of each other, ranging from 21 percent of healthcare workers to 26 percent of education employees, with the exception of retail workers, who reported 15 percent.

5. Spreading rumors about a co-worker
Gossiping about co-workers is no minor offense -- in May 2007, four workers with 46 years of experience between them were fired for gossiping and starting rumors about a colleague and the town administrator.

Thirty-nine percent of government employees plead guilty of the same crime, according to the survey. Twenty-five percent of sales representatives have fed the rumor mill in their offices, while only 12 percent of IT workers have done so.

6. Snooping after hours
You name it, it's been done -- whether digging through someone's desk, sifting through discarded files and even logging onto co-worker's laptops. Bonnie R. nosed around a co-worker's background. She created a fictitious company to obtain information on someone she knew was fired by a law firm. She called the law firm's HR department and identified herself by saying, 'I'm with Quick Staff, a temporary staffing agency. I'm going over the application of Peggy Sue Smith. Peggy was quite candid with me over her recent firing so I'm just contacting you for a little background.'

"While I expected to obtain some information I was not prepared for the in-depth level of dishing this firm's top HR person then dished," Bonnie says.

Retail workers were least likely to snoop after hours according to the survey, with only 14 percent of employees having done so. Government employees led the industries with 26 percent of employees having poked around after hours.

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Monday, October 01, 2007

Knowing me, knowing you

No,its not a rendition to Abba ...

“How do you gain an edge on your competitors? The answer lies with knowing your customers.”

Alison Clements
writes in the Times today, that - Pioneers of business-to-consumer customer management have inspired organisations around the world to be closer and more responsive to their customers. In the last ten years, Tesco’s Clubcard and the sophisticated data mining technology behind it, has changed how the global supermarket group serves its customers. In-depth customer knowledge has been instrumental in Tesco’s tremendous and highly profitable growth. Insight gleaned from analysis of shopping patterns has shaped actionable marketing and retailing programmes, so that busy mums are delighted by discounts on nappies and wipes, and young gadget fans hear of the latest deals on phones and electrical goods.

Clements goes on to say that - US supermarket heavyweight Kroger has followed the same path, like Tesco harnessing marketing company Dunhumby’s expertise in the field. “Customer relationship management has helped me reset my understanding of what the customer is after, and it helps replace intuition with actual data and actual facts,” says David Dillon, CEO of Kroger. He adds: “It’s those facts that are driving our decision-making.”

I agree, if only more companies thought the same way, they would be getting it right everytime ... like in Clements observation of Amazon - is equally erudite in its relationship-building activities. Customers are sent regular email alerts for product recommendations and discounts that really appeal to that individual, based on their known shopping and reading habits. The web giant impressed the UK book industry this year when it was able to start taking pre-orders for the new Harry Potter book well before the publication date was even announced. This was possible because was already in email contact with a database of signed-up Potter fans, built up through purchases and enquiries for previous HP titles over the years.

Alison Clements is right. Knowing your customers and being in constant contact with them puts you ahead of the crowd. Just look at the giant's in industry who have invested in CRM solutions (better results - happy customers - more profit)

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