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News of The World – A moral crisis in the making? July 11, 2011

Posted by Alan Yu in Culture, Leadership and management, Management, Philosophy.
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The printed media industry, like the music industry, has been under pressure in recent years.  Convenient and timely electronic access to a wide variety of content has all but rendered traditional methods of delivery irrelevant.  When you can get breaking news as it happens, as long as you are on line, why would deadlines for inclusion in printed newspapers matter?

Reeling under conditions of hyper-competition to survive, let alone thrive, many big-name magazines and newspapers have had to find ways to differentiate themselves.  These include news “scoops” which are possible only through clandestine tactics involving invasion of privacy and rampant disregard for human decency.  Hacking into voicemail accounts of murder victims and celebrities is par for the course if it provides an edge on stories that pique the interest of readers.

On the surface, moral outrage against such practices has brought down UK’s Sunday tabloid News of The World (NOTW).  The abrupt decision by Rupert Murdoch’s media empire News Corporation to close the newspaper raises a number of questions in its wake.

The decision announced by News International’s Chairman James Murdoch that the edition of NOTW on July 10th, 2011 is its last appears at first sight to be admission of, if not atonement for, culpability in the phone hacking accusations.  In his statement on the closure, Murdoch says: “The good things the News of the World does, however, have been sullied by behaviour that was wrong. Indeed, if recent allegations are true, it was inhuman and has no place in our Company.”

Murdoch sugar-coats the decision by claiming to take the moral high ground, but even  commentators who are not die-hard cynics have reason to believe that other motives are behind it.  Terminating a 168-year-old institution is a momentous decision that cannot be taken lightly, especially when many jobs are involved, and even in the context of the allegations of outrageous practices by its staff, surely can be but the last resort.

First, there are commercial considerations.  Like many other brands in recent times publicly dragged through the dirt of scandalous behaviour, for example, Tiger Woods, NOTW is likely to face mass desertion by commercial benefactors
such as advertisers, at least in the short term, damaging its commercial viability.  Yet as the dominant Sunday tabloid with a circulation of 2.6 million readers, NOTW is probably profitable, and can withstand a little pressure before sinking into red ink.  Besides, shrewd businessmen such as the Murdochs don’t just give up a profitable venture that easily.

Many point to Murdoch’s intention to launch a title that mirrors the highly successful The Sun, which doesn’t publish on Sunday.  On July 5th, two days before the NOTW closure was announced, two URLs, TheSunOnSunday.com and TheSunOnSunday.co.uk, were registered.  Could closure of NOTW be a convenient way to re-brand it as The Sun?

Second, closing NOTW is a masterstroke of guilt denial.  By cutting off what might be a rotten branch, James Murdoch is clearly trying to distance himself and the rest of News International from the culprits as the tree that remains unspoiled.  Yet Rebekah Brooks, the editor in charge when NOTW committed the alleged offences, remains a trusted executive of News Corporation.  Rupert Murdoch is said to have expressed “total support” for her as CEO of News International.  Could she be the one bad apple?

Third, even if the Murdochs are genuinely ignorant about about the outrageous practices in NOTW, as leaders of the organisation, they must take responsibility for the root cause of such behaviour – sacrificing moral standards in a relentless drive for commercial results.  Even if they don’t overtly condone the behaviour of a handful of NOTW staff, they cannot deny endemic failure to maintain moral standards in the organisation.

Debates about the closure of NOTW will continue for months.  Some will concern the commercial brutality facing newspapers in general; others will focus on the symbiotic relationship between politicians and the media.  In my mind, the most important questions we need to answer are:

Are we facing a moral crisis in general, and if so do we even know?

The media survive only if they provide what readers want.  NOTW obviously did this well.  Many readers interviewed by stv claim that despite the phone hacking practices, they continue to buy NOTW.  Are we so inured to injustices in the world that all we look for is the next cheap thrill, and in response are the media right in serving us everything that we want?  If not, are they going to survive?  What wider responsibilities do the media have in defending moral standards and human decency, in the same way as they shape public opinion?

What is the responsibility, if any, of commercial executives to balance the drive for results and maintenance of moral standards?

Commercial enterprises exist to generate profit for shareholders and economic benefits for the wider population.  Many regulations prevent behaviour detrimental to some segments of society, for example unfair competition, price
fixing and misleading product descriptions.  Yet many commercial practices are legal but morally questionable.  How do leaders in these organisations choose between the ignominy of missing commercial targets and defending moral
standards?

What lessons are we going to teach the next generation about NOTW debacle?

The financial crisis of 2008 has taught the world nothing about the fiduciary duty of bankers to protect customers’ life savings.  In fact, banking leaders have shown no remorse for taking, and then passing on, incalculable risks.  Worse still, they feel entitled to millions in bonus payments in return.  As economies in developed countries suffer severe budget cuts resulting from decades of profligacy, it is inevitable that comercialisation of education will intensify.  We have
already shown an avid appetite for vocationally friendly courses at universities (cf. my comments on Middlesex University’s abolition of philosophy courses).  Are we likely to reflect on the NOWT case and pause to think about the need for moral education as a fundamental requirement?

Until we have fully considered and answered the above questions, those who have lost their jobs in NOTW will have done so in vain.  They deserve our sympathy.

The Brave New World of Books – a layman’s view April 9, 2011

Posted by Alan Yu in Books, Communication, Language, Literature, Marketing, Reading.
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I have always had an interest in books, but should have read more than I have.  My excuse?  That the books that matter are too bulky.  The arrival of e-books has totally destroyed this excuse.  My iPad now carries Oscar Wilde Complete Works Ultimate Collection (140+ works), Works of George Bernard Shaw (30+ works), James Joyce’s Ulysses, War and Peace, and The Works of Mark Twain (24 books in a single file).  It weighs exactly the same as it did without them.  Some of the books were even free to download.

The world of books has gone through wrenching change in the last few years.  Prognosis, diagnosis and predictions aside, we don’t quite know what it will look like when the dust settles.  Yet the new world already looks exciting to some, and frightening to others.

Despite the idiosyncrasies of some of the players in it, the world of books is not that different from other industries.  Some generate the product ideas (the authors), some manufacture the products (publishers and printers), some distribute them (booksellers) and others consume them (readers).  There are the usual intermediaries, such as literary agents and editors who work for publishers.

So what does the new world of books mean to all these players in the industry?

Authors

Many published and aspiring authors feel that they are the most oppressed people in the world.  They toil for years to develop their product (the book), only to get serial rejection letters from publishers and biting comments from editors.  With the increasing popularity of e-publishing, authors feel truly liberated.  They don’t have to ask publishers for permission, or beg editors not to change their work.  They can now choose to self-publish anything they want, provided they are prepared to put up with a lot of extra administrative work.

Yet like karaoke, which gives people who can’t sing the illusion that they can, e-publishing gives authors who can’t write or tell a story a similar illusion.  This blog post you are reading could be a case in point.  As the quantity of published material in the market goes up, the general quality comes down.

In other words, authors can now bypass publishers as gatekeepers of “quality”, but there are no more or less “good” authors.  It only means that the work of more bad authors gets out into the market.  Let’s face it, some authors who publish their own works electronically now may not be worthy of publication at all.

The Wall Street Journal reported that some authors also complain they earn less per e-book than they do the physical equivalent.  All we can hope is that a larger number of e-books sell to make up for this shortfall.

Publishers

The manufacturers of books – the publishers – have never been short of raw materials.  They have always been inundated with more manuscripts than they can handle in several lifetimes.  Their trade is also fraught with sometimes substantial risks.  How many titles have they published which don’t even cover the cost of printing, not to mention the occasional advances and huge marketing and distribution costs?

E-publishing has cut the cost of production for publishers to the bare minimum, although physical production probably accounts for a small part of a publisher’s total cost.  A few printers will go out of business.  The cost of distribution has also come down, as there is no real physical handling of an e-book.  Besides, there are now more cost-effective channels for promotion, such as social networking.

The price of an e-book, however, is sometimes 20% cheaper than its paperback equivalent, and sometimes even more expensive.  As e-publishing guts a publisher’s business of costs, book pricing doesn’t seem to have fallen proportionally.  Publisher profitability should have gone up, and the business should be less risky.  Although publishers are also vulnerable to literary agencies selling rights direct to new-world retailers such as Amazon, as Wylie did last year, this doesn’t seem a widespread threat yet.

As purveyors of quality products the reading public wants to buy, publishers should feel secure in their jobs, as long as they continue to keep close to the taste of readers, insist on quality writing, embrace new media and don’t get too naïve about forking out huge advances for celebrity appeal.

Literary agents

Authors love to hate literary agents.  They need them to get to a decent publisher and a wide market, but simply getting to them is a five-year project itself.  With the right confluence of temperament, a literary agent will remain an author’s best friend.  This sometimes cantankerous and oddball breed will likely continue to thrive, and behave just as obnoxiously to the unfortunate writing low-life that dares cross its path.

Booksellers

By all accounts, booksellers seem to have hurt the most.  In an article in Fortune magazine dated June 21, 2010, Borders CEO Michael Edwards defends the raison d’être of bookstores: “If they continue to innovate in the services and experiences they offer…consumers will continue to make bookstores a vital part of their lives…The next chapter is up to them.”  For Borders, that next chapter was Chapter 11, in February, 2011.

My personal experience may be a curved mirror of reality, but it should nevertheless make booksellers stand up and take notice.  Browsing in bookstores is no longer a pastime.  The few physical books I have bought in the last year have either been bargain end-of-the-line titles, or ones I need to share with others.  A few months ago, I saw a title in an exhibition which appeared to be on sale, around 20% cheaper than in bookstores.  There and then, I looked online, found and downloaded an electronic copy at almost half the already reduced price at the exhibition.

Predictions about the demise of anything are usually correct in direction but wrong in timing.  Die-hard physical book lovers will be far bigger in number and slower to change their habits than futurists envisage.  Bookstores will die a slow, painful death.  A few may even survive.

Readers

For the already overloaded reading public, it’s now harder to separate the wheat from the chaff.  Who cares?  We have always made bad choices anyway, and can now do so at lower cost.  Nor do we need to find bigger bookshelves to house those unwanted and unread titles.  As a life-long reader, I find the immense convenience of e-books simply irresistible.  Similar sentiments may even drive up general readership, and give the book industry needed impetus for growth.

In conclusion

As a reader not in any way involved in the book industry, I am excited by the changes I have seen, but would like to see more.  I want more titles to be available electronically, and at the same time as the hard copy comes on to the market.  I want pricing to come down further.  I’d hate to get caught in the commercial maelstrom, though.

Ensuring leadership continuity and renewal – succession planning January 3, 2011

Posted by Alan Yu in Leadership, Leadership and management, Management.
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At this time of the year, it’s customary for companies to evaluate the performance of their staff.  The purpose of performance appraisal is to understand how staff can improve personal performance in their current jobs, and how they can step up or across to other jobs.  This latter objective is part of succession planning, a broader activity which addresses improvement in organisational performance. 

In most large to medium-size organisations, succession planning is a regular and well-understood process.  In fact, there are many books on the market which purport to make the process effective.  One example is Effective Succession Planning by William J. Rothwell.  Although I have not read this book, it appears to be a compendium of everything you need to know about the topic. 

During the past few weeks, however, two unconnected events have led me to wonder whether succession planning genuinely delivers its intended outcome, and the factors that enable organisations to derive maximum benefit from the process. 

The first of these events is chancing upon the review by Alan Murray in the Wall Street Journal of a new book by Bill Conaty and Ram Charan entitled The Talent Masters.  The second event is sitting at dinner next to a fellow graduate from my university, a few years senior to me, who tells me how she is retired in the comfortable knowledge that the business she started almost three decades ago is in good hands.

According to Murray, The Talent Masters is as much a celebration of the Welch Way, management practices established by Jack Welch, former CEO of GE, as it is an exposé of why perhaps we need a “new icon for the rapidly evolving world of business management”.

In addition to recounting the three principles that characterise the Welch approach to management – focus, differentiation and candour – the book also documents a number of interesting examples from industry.  By far the most dramatic example revolves around Larry Johnston, head of GE’s appliance business, who decided to leave to head up Albertsons.  GE was apparently able to agree on the successor to Johnston and “three other slots down the chain of command” within half a day of his resignation.

Succession planning is obviously easier with the depth of talent and the elaborate processes possible in a large corporation such as GE.  Yet I was struck by the visionary approach my fellow graduate takes to ensuring that the small PR consultancy firm she started could continue after her retirement.  As I think about succession planning in light of these two events, it seems that a few factors determine how much benefit we derive from it:

Succession planning works only if people let go

It’s all very well for us to go through an elaborate process of identifying and nurturing talented people in the organisation to take over our jobs, but we have to accept that the jobs have to be vacant before the successorscan prove whether they are ready to take over.

John Howard and Tony Blair, Prime Minister of the Australia and the UK respectively, highly competent and effective leaders in their own right, both tacitly accepted that their finance chiefs, Peter Costello and Gordon Brown, would succeed them eventually.  Both, unfortunately, overstayed their welcome.  In the end, Costello never got the chance to prove himself; and Brown spent a woefully short time on the job before the electorate booted him out.

By contrast, my schoolmate decided early that she was going to retire by a certain time. She had recruited, several years before she even came to that decision, a few talented young people into the organisation.  When she felt the time was right, she stepped back, taking an advisory position and coming to the office half a day for four days.  She made it clear to her successors that they were running the show, although she would be available as a sounding board for important decisions.

In recent American corporate history, Anne Mulcahy handing over the reins to Ursula Burns as CEO of Xerox is a case study in smooth implementation of succession planning.  Mulcahy was only 56 when she stepped down, and having rescued the company from near bankruptcy might have felt entitled to bask a little longer in the glory of success.  BusinessWeek quotes her confessing how hard it is to give up power, but she is also wise enough not to overstay her usefulness: “To have stuck around until I was 65 would be a disservice to Xerox, a disservice to my successor”.

It is a huge challenge for leaders, especially successful ones, to decide consciously to hand over power.  They tend to believe, with a lot of help from sycophants around them, that nobody can do the job better.  Talented successors also tend to be fairly ambitious, and are not prepared to wait in the wings for too long.  When they decide to accept an opportunity that beckons in another company, all the effort in succession planning will have been wasted.

Succession planning is taking risks with people

Very often, candidates identified to have potential to succeed a certain position lack some skills, experience or track record to be either suitable or even credible.  For example, someone who has done a brilliant job in the domestic market may be considered successor to a position with global responsibilities.  Her cultural insensitivity is thought to be a weakness that needs to be tested.  Putting her through an international market may do more harm than good.  Nevertheless, if we are serious about her candidacy we have to take the risk and coach her along the way.

I have personal experience in having identified a highly skilled and competent marketing manager as a future marketing and sales director.  For her to succeed in a broader role, she has to demonstrate to the sales force, who were notoriously entrenched in their traditional way of doing things and somewhat hostile to analytical marketing types, that she could hold her own and lead this rather recalcitrant group into the future.  When a vacancy in the sales area came up, I decided to give her the assignment, warning her about the pitfalls.  She acquitted herself well in the challenge, and eventually eased seamlessly into the broader position a few years later, having won the respect of everyone on the team.  It was a wise move in hindsight, but at the time it was risky.  She could have totally flunked and made a fool of herself.

Personal needs have to align with business needs

Younger generations of executives have different needs from their baby boomer generation predecessors.  Work-life balance, health, family and community are important considerations given less weight a couple of decades ago.

Besides, candidates with good potential are usually high-flying go-getters not prepared to wait in the wings for too long.  A marketing executive earmarked for a general management position may not want to spend a couple of years in the operational wilderness in order to move ahead; a domestic high-flier may not want to leave the domestic power base for experience in an international market.  We have seen many cases of potential candidates passed over for the CEO job joining another organisation to leap-frog their careers.

Since personal as well as corporate circumstances change constantly, no succession planning can assume that potential candidates are even available when the positions for which they are successors become vacant.  All succession planning, therefore, needs to address a number of “what if” scenarios.

In summary, leaders can maximise benefits from succession planning by handing over power when the organisation is ready, rather than when they are; by taking risks with potential candidates early; and by anticipating contingencies.  The first is obviously the hardest to do.

Lessons from the Change of Guard at HSBC September 25, 2010

Posted by Alan Yu in Leadership, Leadership and management, Management.
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According to the New York Times, HSBC has settled management succession at the top after its current Chairman Stephen Green departs to become UK Trade Minister.  It has been a week of tumultuous week of public relations damage control.

HSBC is not known to be flamboyant or attention seeking.  The amount of speculation surrounding succession in the last week has been somewhat unusual, especially when at times the company appeared to have been caught off guard.

Speculation started when the Financial Times reported that current Chief Executive Michael Geoghegan had threatened to resign if he was passed over for the top job.

The New York Times quotes Glen P. Suarez of Knight Vinke, an HSBC shareholder and a critic of the bank’s strategy in the United States, as saying: “It is not the most glorious episode in HSBC’s history, but…it will all come down to execution.”

This “episode” in the history of HSBC highlights some fairly universal issues concerning management, succession planning and leadership:

Nobody can be indispensable

An organisation functions because of all its people working together, not because of any individual.  For an organisation, the old adage that “nobody is indispensable” is not enough.  It should be: nobody can be indispensable.  All organisations have some reporting structures, with some positions senior to others making decisions with greater impact, but they need to exist above and beyond the individuals.

Management cannot be seen to succumb to threats

Only insiders will know whether Geoghegan really threatened to resign.  If he did, that threat alone would have justified HSBC not appointing him Chairman.  As a long-suffering executive who has risen through the ranks to Chief Executive, Geoghegan is entitled to think he has the credentials to take the top job.  He is certainly entitled to put that view to, and argue the case with, the board.  Threatening resignation to achieve an objective is always bad tactics.  It forces the organisation to take a stand for which it may not be ready, and is fraught with the danger of setting unpalatable precedents.

Succession planning needs to be more comprehensive

All organisations do some succession planning, formally or otherwise.  Many managers have a rough idea what to do when selected members of staff leave.  Unfortunately, we often scramble because of inadequate scenario and contingency planning.  Identifying individuals to take over certain positions is one thing, implementing succession when resignations happen is another.  Many unforeseen factors get in the way.  Anointed successors usually show high potential, making them the target of rival firms.  They may not want to wait until a higher position is available.  The timing of a change may not coincide with personal plans, for example the need for frequent travel with young children in tow.  Their skills may not be fully developed when the vacancy occurs.   It will do us well to have a few scenarios in mind in the planning process.

“Alpha” leaders need to keep their egos in check

 Some personality traits and styles render executives particularly suited to be effective leaders: decisiveness, larger-than-life presence, self-confidence and a razor-sharp intellect.  In turning around companies or when faced with an adverse operating environment, leaders with these qualities help the team move swiftly to overcome obstacles.  At other times, these same qualities could prevent leaders from being inclusive and collaborative, being good listeners and showing empathy.  Self-confident leaders with a big ego need to remind themselves constantly to keep it in check, in case on the odd occasion they are wrong.  Doing so will also help them avoid falling into the I-am-too-important-not-to-be-taken-seriously trap.  Geoghegan is not quite Chainsaw Al Dunlap, but he certainly seems to have over-estimated his importance, or under-estimated HSBC’s need for organisational integrity.

Corporate Values vs. the individual

In his books Built to Last and Good to Great, Jim Collins shows how celebrity executives fail to turn good companies great.  According to him, leaders who turn good companies into great ones tend to be comfortable being humble and with exerting a strong professional will at the same time, the so called “Level 5” leaders.  Great and enduring companies also tend to have a robust set of core values.  Talented people promote these values consistently and pervasively in the organisation.  In its most recent succession decision, HSBC has clearly asserted its corporate values over the importance of individuals.  Although it was unfortunate that some of the dirty linen was washed in public, I’m sure it will emerge to be even stronger in time.

What it takes a middle manager to be an effective leader is the right behaviour September 8, 2010

Posted by Alan Yu in Leadership, Management.
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Gurus and guru wannabes have made the topic of leadership a vastly profitable speaking circus supported by voluminous publications.

The expansive literature on leadership devotes a large amount of space to analysing the characteristics, qualities and styles of successful senior executives.

Unfortunately, this analysis is woefully irrelevant, and delivers little practical value, to middle management.

Middle managers get things done and are the foundation of the success of an organisation.  Yet they often feel helpless as the “sandwiched class” between senior executives who have the power to issue orders, and junior staff who have the luxury of merely taking them.

In a blog post entitled “We’ve Got Leaders. What we need is leadership.” author Wally Bock claims that we have leaders in abundance, but “What we need is good leadership.”

“If you are responsible for the performance of a group you are leader, because you have followers,” he continues, “You can lead well, or you can lead poorly, but lead you do.”

Let’s not forget that being a leader is merely a position.  Often you are put in that position willy nilly; sometimes you may choose to be there.

Leadership, on the other hand, involves certain types of behaviour.

Let me try and translate leadership literature aimed at senior executives into some practical pointers for middle managers on becoming effective leaders:

Developing a vision – this usually means having a clear idea of what outcome you wish to see and being able to describe it accurately.  The outcome doesn’t have to be grand.  In fact, sometimes the outcome can be simply the absence of a problem.

Inspiring others – this means talking to anyone in your circle of influence, including your boss, peers and subordinates about the outcome that you would so much like to see and convincing them that it’s a desirable cause to fight for.

Instituting change – this means that you should not be happy with how things have always been done or thought about; in fact, you should develop the habit of asking why things can’t be done or approached another way.

Setting goals – this means that you should always have an objective in mind for any activity you undertake, and you should repeatedly tell others what this is and how far you are from it.

Setting examples – your behaviour as a leader is always under scrutiny, and often imitated by others.  It also carries symbolic value.  Behave only in a way that you are comfortable for others to imitate, and that carries the right message.  Always hold yourself to higher standards than anyone else.

Thinking strategically – this means recognising that there are many ways to skin a cat; thinking about what choices you have, and what reasons and information on which you should make a choice.  When you decide to do one thing, you are also deciding not to do other things.  You need to help others understand and buy into your choice.

Taking charge – people naturally look to leaders for decisions.  Many are afraid of doing the wrong thing and taking the blame for it.  In the face of uncertainty, you need to have the courage to take action and bear the consequences.

Giving praise and support – everyone wants to be told that he or she is doing a good job, especially when the going gets tough.  In the face of adversity, you need to rise above your own emotional reactions and help others overcome their fears and doubts.

Being helpful – the process of change, and the road towards an ambitious goal, is full of difficulties.  Not everyone is up to the task.  Never be too busy to lend a helping hand.  It’s not about you, it’s about them.

The above is clearly not an exhaustive list, nor is any of the items easy.  Besides, getting things right takes a great deal of practice.  I’m sure you can think of many other types of behaviour that help a middle manager become an effective leader.  Do let me know what else you can think of.

Lessons from Recent Political Leadership Changes July 12, 2010

Posted by Alan Yu in Leadership, Leadership and management.
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The second quarter of 2010 turned out to be very noisy on the political front.  A change of leadership took place in three major developed economies, one through the due process of election, and two before the incumbents had finished the term for which they were elected.  David Cameron replaced Gordon Brown as Prime Minister in the UK, Naoto Kan replaced Yukio Hatoyama in Japan, and Julia Gillard ousted Kevin Rudd in Australia.

To paraphrase Lady Bracknell in The Importance of Being Earnest, to lose one prime minister may be regarded as a misfortune; to lose two looks like carelessness; and losing three is downright recklessness.  Yet the tumultuous events of May and June in these three countries are rich with lessons for leaders who live under more salubrious circumstances.

Be sincere and respectful

By the time the polls took place on May 6, few in the UK expected Gordon Brown to return to Downing Street after the election.  As Chancellor under Tony Blair, his wait for the leadership role had long outlasted his patience.  He was often criticised for being rather dour.

Yet for all his faults the one thing that put the last nail in his electoral coffin was making derogatory remarks about a supporter he had just met.  Settling down into the car after meeting a long-time Labour supporter, not realising that he still had a microphone pinned to his shirt, he was heard calling one Mrs Duffy “a bigot”, saying to his aide: “That was a disaster – they should never have put me with that woman. Whose idea was that? It’s just ridiculous.”

Brown’s tendency to find someone to blame was characteristic of him and probably not catastrophic, but Mrs Duffy later said that she was most upset about being described as “that woman”.  This exposure of Brown’s scorn for his supporters was devastating.

Have a vision and stick to it, and explain any change clearly

Kevin Rudd came to power in more or less a landslide.  Climate change featured prominently in his campaign against the Howard government, calling it “the greatest moral, economic and social challenge of our time”.

According to the Herald Sun, in December 2007 Rudd “did an about-face on deep cuts to greenhouse gas emissions, days after Australia’s delegation backed the plan at the climate talks in Bali”.  He apparently changed his mind after hearing warnings that it would lead to huge rises in electricity prices.  The Guardian called his subsequent abandonment of the carbon emissions trading scheme legislation in April “a remarkable act of political cowardice, if not ineptitude”.

Yukio Hatoyama’s Democratic Party of Japan swept to power nine months ago after defeating the Liberal Democratic Party with promises to return more power to local governments, especially on Okinawa bases which local residents resent.  Yet instead of moving the deeply unpopular Futenma US military base off Okinawa altogether, he decided to relocate it to another part of the island.

Neither Rudd nor Hatoyama appeared to have taken much trouble explaining to their followers why they had changed their minds on key planks of their campaign platforms.

Consult, consult, and consult

According to Kevin Rudd, his Deputy Prime Minister Julia Gillard informed him on the evening of June 23rd, 2010 of her request to hold a leadership ballot the following morning.  Factional leaders within the Labour Party were worried about losing the next election.

The last straw that broke the camel’s back in the party caucus was Rudd’s insistence on pushing through a massive increase in a special profits tax on the mining industry, apparently without much consultation with his colleagues.  Although the proposal was part of a report on tax changes, the magnitude of the tax increase surprised the mining industry.  In the end, Rudd had lost touch with his colleagues and supporters in the party.

Swift symbolic acts upon assuming power

What of the successors to Brown, Hatoyama and Rudd?  They all appeared to have moved quickly to make important symbolic changes, exploiting their political capital during their honeymoon as newly elected leaders.

David Cameron and Nick Clegg, in the first coalition government in the UK for 65 years, were falling over themselves to show how they had put aside their ideological differences to work together.  They also lost no time in sternly warning the nation about the austerity needed to bring the UK out of its economic quagmire.  At their first meeting, members of the cabinet declared a 5% cut in their salary as a symbol of collective belt-tightening.

Julia Gillard in Australia moved quickly to declare publicly in her acceptance speech that she would cancel the government’s planned advertising in support of the mining tax.  In return, she asked the mining industry to abandon its advertising opposing the tax.  Within two weeks, she reached agreement with the mining industry on the tax, although by making important concessions on the government’s position.

Succession by a member of the same team

Both Rudd and Hatoyama have been replaced by a member of the team who had worked closely with them.  As Deputy Prime Minister, Julia Gillard would have had a hand in formulating the key policies for which Rudd suffered ignominious defeat in the hands of his own party’s power brokers.  Quite apart from the implications of her appointment on the democratic process of electing leaders, why would her succession as Prime Minister signal any change?  Did she genuinely express dissent during discussions about the mining tax, or was there no discussion at all?

Likewise, Naoto Kan was Finance Minister in Hatoyama’s government.  How can one expect that as Prime Minister, he can implement economic policies which will help Japan reduce its mountain of debt and revive the economy?  Did he have the guts to stand up to Hatoyama when he decided to give in to the Americans on the military base in Okinawa, or was he a willing partner?

When a political leader is ousted for policies which appear to have failed, why should the electorate believe that an important member of the team succeeding him or her will bring the needed change?

In summary

From changes in political leadership in the UK, Japan and Australia in the last couple of months, all leaders should heed the following lessons:

-          Followers, no matter how low in the chain of command, deserve and expect to be treated with respect and sincerity, not merely as a means of shoring up the leader’s position.

-          Followers expect leaders to keep their key promises, and when they don’t they need to understand why.

-          Although leaders are there to make decisions, they should not assume that they can do so alone, without consulting or convincing members of their teams.

-          When leaders assume power in circumstances where change is clearly expected, they will do well to make timely moves that signal a break from the past.

-          Successors to fallen leaders who are key members of the previous team need to confront the scepticism that greets their assumption of power.  Explanation of their involvement in previous policies will help dispel doubts about the possibility of real change.

An epitaph for the €uro May 6, 2010

Posted by Alan Yu in Leadership, Management, Miscellaneous.
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Here lies the €uro

A fine dream born of

Lofty ideals

Brought down

By the brutal reality

Of the difference

Between rich and poor

It is sometimes amazing how simple things at a personal level can become such complicated matters when raised to the national level.  Paying for things we can afford is a good example.

What has happened in Greece, at the personal level, is akin to Warren Buffet asking me to join his exclusive club to throw a lavish party.  The bill will come to millions of dollars, and we have to put up our respective share.

Mr Buffet will dip into his billions and easily pay his $1 million dollars share of the bill.  I, on the other hand, have only savings of $100,000, and have to borrow $900,000 just to leave the party.

So what do I do?  I say to Mr Buffet: “Thanks for the invitation, but I really can’t afford to be at your party.  Have a good time.  It’s been nice knowing you.”  I will go home, have a soup and some salad, go to bed early with Milan Kundera’s The Unbearable Lightness of Being and wake up the following morning ready to tackle the world.

Greece, on the other hand, said to Chancellor Gerhard Schröder: “Thanks for the invitation Herr Schröder. We’d love to join the party.  We can’t afford it, but we’ll borrow what we need to pay our share of the bill, and worry about it long after the fun is over.”

Should we be surprised that the party turned out to be a bad dream for Greece?

In the meantime, Mr Papandreou says to Frau Merkel: “It was a lot of fun at the party, but you know we had to borrow to even be there.  Now you have to help us fend off all these loan sharks wanting their money back.  By the way, the loan sharks knew there was no way we could pay them back.”

Should we be surprised that Frau Merkel tells Mr Papandreou to go jump in the lake?

In an article carried by Project Syndicate, Professor Stiglitz at Columbia University suggests that the Eurozone might have to disband if it is not prepared to implement necessary institutional reforms.  In another article Professor Feldstein of Harvard University explains why Greece will default.

The moral of the story: PIGS have no place to be in a rich man’s party.

Grammar, leadership and clarity of thought April 26, 2010

Posted by Alan Yu in Communication, Language, Leadership.
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It has been a harrowing few weeks, and finding time to write original material for the blog has been a challenge.  I tried to recycle material I had received from friends and associates, but that turned out to be quite inadequate as well.

Instead I spent the little time I had to re-read an article by an actor I admire, about a fascinating new product from a company I respect, in a magazine long established as one of the best in the world: Stephen Fry’s article in the April 12th 2010 edition of TIME magazine on the iPad: http://bit.ly/bY9ah5

Doing that opened the floodgates.  I noticed something in the article which I had missed altogether when I skimmed through it the first time – a grammatical mistake!

No, I said to myself, that can’t be true.  A grammatical mistake in a TIME magazine article by a world-renowned actor and author spotted by an ignoramus like me?  That’s not possible.

I rubbed my eyes, and read the offending sentence over and over again.  I concluded that it was a mistake.  Here’s the passage where the error occurs (page 29 of the written article and at this link on the web: http://bit.ly/aP7eWa), as Fry describes Steve Jobs, Apple's CEO:

“…I do believe Jobs to be a truly great figure, one of the small group of innovators who have changed the world. He exists somewhere between showman, perfectionist overseer, visionary, enthusiast and opportunist, and his insistence upon design, detail, finish, quality, ease of use and reliability are a huge part of Apple's success..

Job’s insistence on the variety of factors that account for Apple’s success is a singular noun, and therefore should be followed by “is” rather than “are”.  Had the first part of the sentence been written “The aspects of the product he insists on getting right – design, detail, finish, quality, ease of use and reliability…”, then it would have been appropriate to use “are”.

Let me be clear: finding a mistake in TIME magazine is a rare occurrence.  Its editors are human and therefore susceptible to the same chances of oversight as everyone else.  To err, after all, is human.

Which is not to argue that we should consider it acceptable, as many writers nowadays do, on the pretext that when the English language becomes more common as the medium of communication among people from different backgrounds, we should be more tolerant towards grammatical mistakes.

That’s codswallop, as it’s tantamount to saying that Pidgin English is good English.  Grammar is a set of rules by which sentences in a language are constructed and therefore understood.  To tolerate grammatical mistakes is to condone fuzzy thinking, which makes for bad leadership.

A simple grammatical mistake does not a bad leader make.  Perhaps, but an important skill of a good leader is the ability to communicate clearly.  How can a leader do so when grammatical mistakes clutter up speeches and proclamations, thereby creating confusion, ambiguity and suspense?  Besides, leaders are supposed to set examples.  If they tolerate sloppy use of language, woe betide their followers when they write and speak.

Recently I came across an excellent talk by Clive James, an Australian raconteur and author who has been living in the UK for some time.  In May 2006 the Australian magazine The Monthly carried an article he wrote on the English language, entitled “The Continuing Insult to the English Language”.  He explains further on his web site:

The piece …attracted a gratifying amount of attention, although I got the impression that I was preaching to the converted, whose numbers were dwindling. Even if that were so, I got the chance of preaching to a lot more of them when Jill Kitson of the ABC asked me to turn the text into a broadcast… 

The broadcast can be heard at this link: http://bit.ly/dhNym5

James continues:

That melancholy long withdrawing roar you hear in the background is generated by all the surviving members of my generation who were taught to parse a sentence. The text of the piece is filed under "Recent Essays" — two versions of the same doomed campaign. 

The text James refers to can be found at this link: http://bit.ly/bbicwT

I am one generation down from Clive James, but if he is right, I must be one of the endangered species of purists who insist on getting things right in language, as I am dead scared of fuzzy thinking.  I am happy to be so.

Sometimes they make it sound like you’re a useless animal… March 15, 2010

Posted by Alan Yu in Communication.
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A colleague and I changed our travel plans at short notice and decided to take an earlier flight than the one we had booked.  There were no seats available in business class on that flight, so they had to re-book my colleague into economy.  This was the question the kind-hearted person at the service desk put to her colleagues at the gate: “Should I downgrade him first before I send him over?”  After some further exchange, she asked again: “Should I put him down before he comes across?”  Even well-meaning people trying their best to help sometimes make you feel like an animal past its use-by date…

A summary of Gary Hamel’s analysis of the secrets of Apple Inc.’s success March 9, 2010

Posted by Alan Yu in Management.
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In two blog entries in the Wall Street Journal over the past couple of weeks, management guru Gary Hamel has taken a stab at analysing the success of Apple Inc.  You can find Part I here, and Part II here

He begins by going through a set of surprising statistics about Apple: 

-          It’s the market leader in computers costing more than $1,000 – in one month, its share in this segment exceeds 90%

-          It makes more money from its 3% share of global handsets than Nokia makes from more than 30%

-          It’s the world’s largest music retailer

-          Its stores generate four times more revenue per square foot than big box competitors; with its store on Fifth Avenue, New York, being the most profitable retail outlet in the world

-          Its market value is three and a half times that of Nokia, and more than 60% higher than Hewlett-Packard’s, which has three times Apple’s revenue 

He runs through a laundry list of strategies to which many would attribute Apple’s success: 

-          Heavy focus on design

-          Fusion of hardware and software

-          Integrating a broad array of complementary technologies

-          Captivating customers with great end-to-end user experience

-          Harnessing the talent of independent software developers

-          Leveraging core competencies into new markets – Steve Jobs describes Apple as the world’s large “mobile devices company” 

But, Hamel argues, while the above list is logical, it is also unsatisfying, as it reveals the “how” but not the “why”. 

With a disclaimer that he has neither spoken to Apple’s senior executives, nor done thorough research into the company, Hamel offers “unstinting devotion to a particular set of values” as the secret behind Apple’s success.  According to him, these values are “as rare as a rose in winter” among Fortune 500 companies: 

Being passionate – although Apple doesn’t always pioneer a new product category, it always sets out to radically redefine a category with a distinctive product or business model. 

Aiming to surprise – the company’s penchant for pre-launch secrecy is simply the way you produce the same sort of gee-whiz delight that any parent aims for on Christmas morning. 

Being unreasonable – Apple regularly challenges itself to do the impossible, producing products that are as sexy as Ferraris and as practical as Hyundais, and its lean and agile supply chain gives nothing away to Wal-Mart or IKEA.

Innovating incessantly and pervasively – innovation infuses everything Apple does, in products, services and business models. 

Sweating the details – “it just works” because hundreds of people sweat the details. 

Thinking like an engineer, feeling like an artist – a company can’t produce beautiful products if the bean counters win every argument: Apple’s executives know that something lovely and sleek and unexpected can provoke a visceral reaction in a customer – a reaction that may not be easy to quantify but can nevertheless be monetised.

To the above, I would personally add: meticulously making the look and feel "hang together".

Of course, Apple also has its flaws.  According to Hamel, Jobs is said to be “an egomaniacal control freak” and it has "all the monopolistic tendencies of its competitors".  “Apple will one day fall prey to the same sort of arrogance, nostalgia and denial that has destroyed other once-venerated companies”, Hamel concludes.  But for him the case of Apple “is just a convenient and plausible vehicle for driving home a fundamental truth: you can’t improve a company’s performance without improving its values”.

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