Random acts of Leadership

This morning's papers are ablaze with coverage of the Australian Prime Minister's response to the unions that take a short term view of employment and disregard the lessons of the past, that is; protecting jobs by forcing government or any other bodies for that matter to contract local resources that are more expensive than imported ones creates serious medium to long term negative impacts on employment.

We are in a global economy, and as a result we need to be globally competitive. Unions that do not remember that what more than anything else saved the automobile industry in Australia, was the Button plan of reducing tariffs over a period of time, are simply peddling ignorance or misinformation.

We trust Mr Rudd will power through this nonsense, continue to show Leadership and not buckle-in to political pressures that he would be under, in this process.

Proprietors and Leaders of these organisations, represented by these unions, know that the only effective long-term strategy to longevity in good and not so good economic periods is to constantly offer better value than their competition. We live in a world where the price has to be right and customers choose us on the basis of us offering better value, be-it; better customer service, better turn-around time, better warranties, better designed products, etc...

Aldo Grech - CxO Consulting

Call for Leaders

According to the Congressional Research Service (CRS) Report for Congress, from the 9-11 attacks to date, the cost of the "War on Terror" has been US$863 billion, and growing. Since 1993 Greg Mortenson, an American mountaineer from Minnesota, has among other things, single-handedly built 55 schools for impoverished children in the forbidden terrain that gave birth to the Taliban. Which approach do you feel is producing the best outcomes in making the world a safer place, the War on Terror or Greg? To us the answer is simple, the latter.

We recommend that you read Three Cups of Tea and find out more about this amazing American and the power of the humanitarian spirit. And imagine what Greg could have achieved with the squandered US$863 billion! CxO and this newsletter are about Leadership, not necessarily about humanitarian stories, although we do draw courage from the human spirit of benevolence. However, this example patently demonstrates the difference between a CEO and a Leader. There are many approaches towards a desired outcome, and we believe that the only approach that achieves sustainable and great outcomes is Leadership (that emanate from our Essence). All the others come from ego and achieve a variety of short-to-medium-term good outcomes, and in some cases long-term, damaging, often irreparable outcomes. In our example above we see, one one side, the ego of a nation and its president and on the other, an American with a different approach, operating from his Essence, the stuff of true Leadership.

Ego is a difficult armour to wear

Ego is conditional and conditioned. It operates within certain parameters of expectation. It deals with image, consistency, expectations, biases, learnt behaviours, conformity, protection, defences, pride, routine, and much more. Paradoxically, it also feels safe for the carrier as it is built around known behaviours, survival instincts, and defence mechanisms.

Essence, however, is pure. It is about passion, purpose and the authenticity of the objective/s. Essence takes courage. It often goes against norms, at times it demonstrates unpredictable behaviour, and it is often blocked, rejected, and derailed.

However, these are not times for easy options. In our opinion the current global financial meltdown was brought about by ego and greed. It takes true Leaders and true Leadership to take us to the next stage of human evolution. The CEOs who led us to this place will not cut it for the next stage. Much discussion in our internal workshops, and much media scrutiny, has revolved around what to do to punish the CEOs and board members who have brought the world to this place and how they should repay society for their failings and the treacherous conditions in which we find ourselves. Whilst this would soothe the human desire for revenge, it might not be the right solution for achieving the next stage of human growth, as the "War on Terror" has so clearly demonstrated.

Most of these executives did what they thought was be st, and yes, some are possibly corrupt. However, these corrupt individuals are likely few in the scheme of things and need to be dealt with directly. We are going to have to trust that these governments that are handing out trillions of dollars hand-over-fist will take appropriate action to discipline them, but let's not toss the baby out with the bathwater. Surely they are not all crooked. Surely most were doing their best and have had a notably successful track record. Still, their best will not cut it any more unless they too learn to give heed to their Essence and change from being just CEOs to being great Leaders. The lesson from Greg Mortenson is clear, take a compassionate approach to adversity. This takes true courage and comes from our essence, which at its core is pure, exploratory, growth-attuned, astoundingly innovative, and frankly, exhilarating, for when things get to their worst and humankind seems to have lost everything, great Leaders seem to emerge and take humanity to its next stage of evolution.

Aldo Grech - CxO Consulting

Know but don't tell

A young executive I am mentoring in sales is very keen and knowledgeable in his subject matter. He operates in the IT industry and has an engineering background. He is a very giving individual, ready to share all his knowledge to the benefit of his potential customers. I sat with him through a potential sale to see why his closing percentages were so low when he had so much to offer.

What I found was that as soon as the customer expressed their situation, this sales executive went straight into the pitch, singing the praises of his product and explaining amazing technological breakthroughs in quasi lay terms. The potential customer eventually thanked us for the meeting and indicated he would contact us when ready to buy. We never heard again.

It is very difficult for me to sit through these meetings as I HATE losing a sale where the customer obviously requires the product/service.

The fact that we know our product inside out, does not give us the license to bombard the poor potential customer into submission.

The lesson for my mentee was...... Know but do not tell!

One of my best sales executives during my stint in New Zealand once said to me...... "there is a reason we have two ears and one mouth, I keep reminding myself to shut-up". Ask, ask and ask again is the simple but difficult to execute answer. Sales is no different to peeling an onion. The questions serve to peel away layer after layer until we get to the core; in the case of sales, the core of the customers' needs. They eventually will tell us what their real (rather than the perceived) needs are and there you have a sale. And I say those words very purposefully; it is not that you have closed a sale, it is that you have virtually received an order without "selling".

It serves to know your product inside-out as only then do you know how to pick the moment when the customer hands you the sale. The alternative, which many sales executives use is to bombard the customer with product features hoping that one or some stick. This often does not work and alienates potential customers that have real needs.

Aldo Grech - CxO Consulting

Sales driven Marketing

OK, times are tough and the Financial Department has taken the slasher to marketing budgets; so what next? As a Client of mine recently told me, "I am not used to such small marketing budgets"! This was before she left and joined another company (presumably with larger marketing budgets).

Smaller marketing budgets are quickly becoming the norm and for good reason, and as a leader of your area, you could do worse than being proactive about re-cutting your budget. So how do we adjust to this new world of smaller marketing budgets and how do we continue to achieve the same or better outcomes from the smaller investment?

Simply address these three points, (the first one is obviously nothing new):

1. These are indeed tough times so go and re-negotiate your suppliers down as they will do almost anything to keep your business (in fact we recommend, unless you have already done so, go and get third party quotes as well).
2. Get rid of any market research expenditure which is a waste of time, if;
• you are able to capture the feedback from your sales-team. If you have not, this is a great time to institute formal feedback mechanisms for your sales executives; they are a gold-mine of direct customer feedback.
• your organisation enforces the appropriate use of a CRM system. In today's world, it is unacceptable for any organisation not to have an effective CRM system. It costs very little (compared to any market research you are currently funding) to get a SaaS CRM system such as salesforce.com. The next thing is to ensure it is being utilised effectively.
3. This is the key step. Renegotiate a different approach to marketing budgeting and gear it around sales. We find an effective way is to ask for your standard budget on the basis of the organisation achieving its projections for the year. Then get the organisation to commit to 50% budget and the balance extended to you on the basis of results. Furthermore you should have no ceiling so if the organisation overshoots its projections, you continue to receive extra marketing funds. The formula would look like this;
• P=Projection, B=Marketing Budget, A=Actual Revenue
• then; B=((B-(B*.5))+((A/P)*(B*.5)))
• ideally calculated quarterly.

If you are thinking that this is nonsense, then think again. In our experience, many organisations (mainly successful up-and-coming ones) have adopted this, or similar, mechanisms and so you really have no choice.

Aldo Grech - CxO Consulting

Has China missed the Opportunity?

In the blink of an eye, the future became the past.

For decades, we have been forecasting China becoming the leading state a super power, super economy and as a result the leader of the world surpassing the USA. Then the new millennium brought about unanticipated events that strained the American and Global economies, bringing them to their knees, at a time when the world's eyes were focused on the amazing economic and polished Olympic performance and BANG, China is the powerhouse of the world. Becoming one of America's biggest creditors with stunning economic performance driven by low-cost manufacturing, exports and growing domestic consumption, accelerating China to a position of dominance.

This on a back-drop of questionable human rights, a state controlled media (a government mouth-piece) and growing evidence of cleansing and atrocities; while at the same time the developed world is sobering-up to the destruction of greed and ego. The emergence of a new type of Leadership based around true concern for the environment, the less fortunate and the anti-nuclear weapon proliferation; symbolized by the remarkable actions of the Obama administration that contrast the failures of the previous administration in these same areas.

Then, almost as a test provided to China by the universe, we see an ex-Chinese, Australian Citizen, Stern Hu, arrested for suspected inappropriate actions (it is not for us to discuss the merits here), not yet officially accused of any crime. The world will take note and China potentially risks alienating investors, organisations and expatriate employees right at the crucial time when the Lion was ready to roar. This very publicised arrest could become the catalyst for China's new direction and could easily (with the ongoing Tibetan struggle and other less publicised challenges) turn into China's symbolic Achilles heel.

It could be speculated that the timing of such events come at a crucial moment in history when we observe the rise and rise of India. India's highly educated population that is experiencing significant growth, with a strongly growing economy and established and stable infrastructures, is a formidable challenge for China.

Has China missed the boat, or is it facing the revolution it had to have?

And where is the US in all this? What role does it play in a global economy that is experiencing seismic shifts?

Aldo Grech - CxO Consulting

iPhone; today's PC?

Of course there is WindowsMobile, Blackberry, Android (or Google phone) and Nokia, and having strategies for these platforms should also be on your consideration list. However, the exponential growth in sales of iPhone is not to be ignored. It is quite interesting to see Apple beating Microsoft at its own game......

You see, while the iPhone is indeed sexy, easy to use and has now achieved cult status (all important aspects for product success). There are, have been and will be equally good or better designed products that might or might not dethrone the iPhone. So why is it that we believe that the iPhone is such a key strategy for any business and why do we say that the iPhone is the new PC.

We do not believe the answer is a technical one. This is not a technical newsletter and in fact it is a newsletter for leaders and great leaders know that a key aspect to successful strategies, is picking the right horses to bet on.

In our opinion, much of the success of Microsoft is unrelated to the quality or indeed effectiveness of their software; and let's not even entertain sex appeal. Many technocrats have for the last 25 years discounted Microsoft technical prowess and in their earlier years, their future fortunes (obviously proven wrong in retrospect). What Microsoft brilliantly did (knowingly or not) are in our opinion, 2 key tactics:

1. They made many people rich
2. They created an industry around them (now known as resellers), many of which became wealthy fulfilling Microsoft's Client's needs; arguably sorting-out difficult to use software.

So, why do we believe that the iPhone is today's PC? Simple:

1. Apple's Appstore is a new channel a virtual chain of resellers, adapted to today's delivery systems and customer needs.
2. A great direct to customer channel of software sales; allowing developers to reap significant rewards.

As a leader:

1. Are you ensuring that your products are being aired to iPhone customers?
2. Are you ensuring that your employees and partners know that they stand to benefit significantly financially from their involvement with your organisation?

A few examples of iPhone successes/strategies:

1. Robert Murray, chief executive of mobile games development studio Firemint, says the iPhone and App Store also helped save the company after the downturn showed them their model wasn't working - http://www.smartcompany.com.au/leisure-and-gaming/20090703-firing-up-the-gaming-industry.html
2. With more than 60 percent of Toyota Motor’s WAP traffic coming from the iPhone, the automaker decided to take a different approach to mobile with the promotion of the newest Prius car model - http://www.mobilemarketer.com/cms/news/database-crm/3636.html
3. Rental resource provider Apartments.com has launched a new iPhone and iPod touch application to complement its online services and claim some territory in the coveted iPhone demographic - http://www.mobilemarketer.com/cms/news/search/3625.html
4. Pernod Ricard’s Absolut Vodka is leveraging the mobile channel for branding, customer engagement, entertainment and affinity. The liquor giant has launched an iPhone application for meant to help it connect with legal-aged drinkers and provide relevant information to this audience - http://www.mobilemarketer.com/cms/news/advertising/3600.html
5. Sam Plowman, head of online banking said: "It was very apparent to us that Apple had developed an interface that would bring forward the use of browser and internet apps on mobiles. We decided we had to be ready with app when the iPhone launched here.'' - http://www.smh.com.au/executive-style/gadgets/business-goes-for-iphone-apps-20090709-de79.html

And finally - According to Clevenger, 44% of businesses that have not yet embraced iPhones plan to do so this year. As one attendee observed, where the one-laptop-per-child initiative failed, one-iPhone-per-child appears destined to succeed - http://searchmobilecomputing.techtarget.com/tip/0,289483,sid40_gci1359509_mem1,00.html?track=NL-315&ad=710878&asrc=EM_NLN_8099263

So if you have been thinking that the iPhone is not the right channel for your products/clients, maybe, as a great leader, you should rethink your strategies! Early adopters will reap the benefits.

Aldo Grech - CxO Consulting

Problems or Opportunities?

We invented the automobile as we gradually found horses too inconvenient; then we decided we could get there quicker if we fly......

We could have seen the horse as a problem and chosen to get angry and beat it into submission, and we knew the possible outcome of such action.

I still remember, at the turn of the millenium, the feeling of accomplishment visible in most people's demeanour, in the developed world. We had achieved amazing things and could see that with the exponential growth of wealth, technology and knowledge, we were on the verge of something grandiose. We were all speculating and talking about how we have moved from the industrial age to an intellectual age.....

Sometimes, usually at the right time, the universe throws us these opportunities disguised as problems to propel us into our next stage of human growth. How the West reacted to September 11th had signs of everything but certainly not an intellectually evolved society. We saw actions propelled by anger, greed, ego and power. Close to a thrillion dollars spent since on the "War on Terror" (a rediculous concept for a wise and intellectually evolved society), addressing anger, greed, ego and power directly, that did nothing (or possibly the opposite) to making the world a safer place.

Wisdom and intellectual soundness might have taken a totally different approach.

It is however a refreshing change to see those like President Barak Obama operating from their passion and purpose approaching the ensuing global wows in a totally different and empathetic way. Let's hope the greedy wont stop them, as this approach is exactly the opportunity the universe is giving us right now.

As a Leader, are you adopting the President's approach or are you still in the "If you are not with us you are against us" mode? The latter (propelled by greed and ego) will keep you, your family, company, community and the world in this turmoil, the former will springboard us collectively into a future far brighter than we can even imagine.

We are currently observing the universe's natural selection process at work and those choosing greed over empathy are the dinasours of our age.

Aldo Grech - CxO Consulting

Be Different or suffer Depression

Many of us believe that if our truth does not match that of others (especially our parents, religion or culture), then we are wrong.

When we try to comply with the truth of others and usually are unsuccessful, then we hide it as we believe something is wrong with us!

When we let this accumulate over time, we start believing we are crazy and eventually move to depression or suffer a breakdown!

But remember, that every thing created by human-kind was DIFFERENT at that stage!

So be different or choose the path to depression and breakdown.

Finally, as a mentor once told me, "NEVER compare others' exterior with your interior" (you never know how close they are to depression/breakdown!)

Aldo Grech - CxO Consulting