Category Archives: Leadership

Building a Lean Financial Infrastructure!

A lean financial infrastructure presumes the ability of every element in the value chain to preserve and generate cash flow. That is the fundamental essence of the lean infrastructure that I espouse. So what are the key elements that constitute a lean financial infrastructure?

And given the elements, what are the key tweaks that one must continually make to ensure that the infrastructure does not fall into entropy and the gains that are made fall flat or decay over time. Identification of the blocks and monitoring and making rapid changes go hand in hand.

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The Key Elements or the building blocks of a lean finance organization are as follows:

  1. Chart of Accounts: This is the critical unit that defines the starting point of the organization. It relays and groups all of the key economic activities of the organization into a larger body of elements like revenue, expenses, assets, liabilities and equity. Granularity of these activities might lead to a fairly extensive chart of account and require more work to manage and monitor these accounts, thus requiring incrementally a larger investment in terms of time and effort. However, the benefits of granularity far exceeds the costs because it forces management to look at every element of the business.
  2. The Operational Budget: Every year, organizations formulate the operational budget. That is generally a bottoms up rollup at a granular level that would map to the Chart of Accounts. It might follow a top-down directive around what the organization wants to land with respect to income, expense, balance sheet ratios, et al. Hence, there is almost always a process of iteration in this step to finally arrive and lock down the Budget. Be mindful though that there are feeders into the budget that might relate to customers, sales, operational metrics targets, etc. which are part of building a robust operational budget. var
  3. The Deep Dive into Variances: As you progress through the year and part of the monthly closing process, one would inquire about how the actual performance is tracking against the budget. Since the budget has been done at a granular level and mapped exactly to the Chart of Accounts, it thus becomes easier to understand and delve into the variances. Be mindful that every element of the Chart of Account must be evaluated. The general inclination is to focus on the large items or large variances, while skipping the small expenses and smaller variances. That method, while efficient, might not be effective in the long run to build a lean finance organization. The rule, in my opinion, is that every account has to be looked and the question should be – Why? If the management has agreed on a number in the budget, then why are the actuals trending differently. Could it have been the budget and that we missed something critical in that process? Or has there been a change in the underlying economics of the business or a change in activities that might be leading to these “unexpected variances”. One has to take a scalpel to both – favorable and unfavorable variances since one can learn a lot about the underlying drivers. It might lead to managerially doing more of the better and less of the worse. Furthermore, this is also a great way to monitor leaks in the organization. Leaks are instances of cash that are dropping out of the system. Much of little leaks amounts to a lot of cash in total, in some instances. So do not disregard the leaks. Not only will that preserve the cash but once you understand the leaks better, the organization will step up in efficiency and effectiveness with respect to cash preservation and delivery of value.  deep dive
  4. Tweak the process: You will find that as you deep dive into the variances, you might want to tweak certain processes so these variances are minimized. This would generally be true for adverse variances against the budget. Seek to understand why the variance, and then understand all of the processes that occur in the background to generate activity in the account. Once you fully understand the process, then it is a matter of tweaking this to marginally or structurally change some key areas that might favorable resonate across the financials in the future.
  5. The Technology Play: Finally, evaluate the possibilities of exploring technology to surface issues early, automate repetitive processes, trigger alerts early on to mitigate any issues later, and provide on-demand analytics. Use technology to relieve time and assist and enable more thinking around how to improve the internal handoffs to further economic value in the organization.

All of the above relate to managing the finance and accounting organization well within its own domain. However, there is a bigger step that comes into play once one has established the blocks and that relates to corporate strategy and linking it to the continual evolution of the financial infrastructure.

The essential question that the lean finance organization has to answer is – What can the organization do so that we address every element that preserves and enhances value to the customer, and how do we eliminate all non-value added activities? This is largely a process question but it forces one to understand the key processes and identify what percentage of each process is value added to the customer vs. non-value added. This can be represented by time or cost dimension. The goal is to yield as much value added activities as possible since the underlying presumption of such activity will lead to preservation of cash and also increase cash acquisition activities from the customer.

Introduce Culture into Product Development

All products go through a life-cycle. However, the genius of an organization lies in how to manage the life-cycle of the product and extend it as necessary to serve the customers. Thus, it is not merely the wizardry in technology and manufacturing that determine the ultimate longevity of the product in the market and the mind share of the customer. The product has to respond to the diversity of demands determined by disposable income, demographics, geography, etc. In business school speak, we say that this is part of market segmentation coupled with the appropriate marketing message. However, there is not an explicit strategy formulated around identifying

  1. Corporate Culture
  2. Extended Culture

To achieve success, firms increasingly must develop products by leveraging ad coordinating broad creative capabilities and resources, which often are diffused across geographical and cultural boundaries. But what we have to explore is a lot more than that from the incipient stages that a product has imagined: How do we instill unique corporate DNA into the product that immediately marks the product with a corporate signature? In addition, how do we built out a product that is tenable across the farthest reaches of geography and cultural diversity?



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Thus, an innovative approach is called for in product development … particularly, in a global context. The approach entails getting cross-disciplinary teams in liberal arts, science, business, etc. to work together to gather deeper insights into the cultural strains that drive decisions in various markets. To reiterate, there is no one particular function that is paramount: all of them have to work and improvise together while ensuring that there are channels that gather feedback. The cross disciplinary team and the institutionalization of a feedback mechanism that can be quickly acted upon are the key parameters to ensure that the right product is in the market and that it will be extended accordingly to the chatter of the crowds.

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Having said that, this is hardly news! A lot of companies are well on their way to instill these factors into product design and development. Companies have created organizational architectures in the corporate structure in a manner that culturally appropriate products are developed and maintained in dispersed local markets. However, in most instances, we have also seen that the way they view this is to have local managers run the show, with the presumption that these “culturally appropriate” products will make good in those markets. But along the way, the piece that dissembles over time on account of creating the local flavor is that the product may not mirror the culture that the corporate group wants to instill. If these two are not aptly managed and balanced, islands of conflict will be created. Thus, my contention is that a top-down value mandate ought to set the appropriate parameters inside which the hotbed of collaborative activity would take place for product design and development in various markets.

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Thus the necessary top down value systems that would bring culture into products would be:

  1. Open areas for employees to express their thoughts and ideas
  2. Diversity of people with different skill sets in product teams will contribute to product development
  3. Encouraging internal and external speakers to expound upon the product touch points in the community.
  4. Empowerment and recognition systems.
  5. Proper formulation of monetary incentives to inspire and maintain focus.

 

Why Jugglestars? How will this benefit you?

Consider this. Your professional career is a series of projects. Employers look for accountability and performance, and they measure you by how you fare on your projects. Everything else, for the most part, is white noise. The projects you work on establish your skill set and before long – your career trajectory.  However, all the great stuff that you have done at work is for the most part hidden from other people in your company or your professional colleagues. You may get a recommendation on LinkedIn, which is fairly high-level, or you may receive endorsements for your skills, which is awesome. But the Endorsements on LinkedIn seem a little random, don’t they?  Wouldn’t it be just awesome to recognize, or be recognized by, your colleagues for projects that you have worked on. We are sure that there are projects that you have worked on that involves third-party vendors, consultants, service providers, clients, etc. – well, now you have a forum to send and receive recognition, in a beautiful form factor, that you can choose to display across your networks.

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Imagine an employee review. You must have spent some time thinking through all the great stuff that you have done that you want to attach to your review form. And you may have, in your haste, forgotten some of the great stuff that you have done and been recognized for informally. So how cool would it be to print or email all the projects that you’ve worked on and the recognition you’ve received to your manager? How cool would it be to send all the people that you have recognized for their phenomenal work? For in the act of participating in the recognition ecosystem that our application provides you – you are an engaged and prized employee that any company would want to retain, nurture and develop.

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Now imagine you are looking for a job. You have a resume. That is nice. And then the potential employer or recruiter is redirected to your professional networks and they have a glimpse of your recommendations and skill sets. That is nice too! But seriously…wouldn’t it be better for the hiring manager or recruiter to have a deeper insight into some of the projects that you have done and the recognition that you have received? Wouldn’t it be nice for them to see how active you are in recognizing great work of your other colleagues and project co-workers?  Now they would have a more comprehensive idea of who you are and what makes you tick.

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We help you build your professional brand and convey your accomplishments. That translates into greater internal development opportunities in your company, promotion, increase in pay, and it also makes you more marketable.  We help you connect to high-achievers and forever manage your digital portfolio of achievements that can, at your request, exist in an open environment.  JuggleStars.com is a great career management tool.

Check out www.jugglestars.com

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JuggleStars launched! Great Application for Employee Recognition.

About JuggleStars  www.jugglestars.com

Please support Jugglestars. This is an Alpha Release. Use the application in your organization. The Jugglestars team will be adding in more features over the next few months. Give them your feedback. They are an awesome team with great ideas.  Please click on www.jugglestars.com and you can open an account, go to Account Settings and setup your profile and then you are pretty much ready to go to recognize your team and your colleagues at a project level.

Founded in 2012, JuggleStars provides professionals the ability to share and recognize success and broadcast recognition at varying levels of granularity across a wide array of social platforms. We enable the professionals to manage their brand and maintain and grow their digital portfolio of achievements. Our vision is to make all of the active professionals in our network become lighthouses in the global talent marketplace.
To that end, we believe that there are four tightly intertwined components in play to make this possible.
1.    Rich User Experience: It is important for us to create a rich user experience to encourage users to use our application and reward their bosses, subordinates, peers and third-party vendors – all of the folk who make the life of the professional just a little easier and better. To that end, we have adopted some of the common social networking principles, user experience and general interactivity to allow quicker adoption and integration of users into the JuggleStars community. We will continue to hone and sharpen our focus, while being more inclined toward minimalism that advances the core value proposition to the user.
2.   Tools: We will provide tools integrated into the rich user experience. Being bootstrapped has afforded us very little headroom to give you all that we think you would really find helpful, but our goal is to do our best to give you the tools to be able to manage your brand better. With your support and generosity, we can certainly accelerate what we can provide to you, and we hope that we can demonstrate the power of the web together to create a meaningful and impactful solution via a set of tools that will endure and stand the test of time.
3.    Fun: We are a team that wants to introduce fun in the application. We have as a team worked together to integrate HR, Gaming, Recognition, Open Platform in a manner such that we introduce a healthy spirit of competition and fun while you use our application. Trust us! We are also trying to figure out ways in which you may not have to use our application. We have left you wondering now, haven’t we? Well, stay tuned.
4.    Social Good: Great people do great things. They are the lighthouses for talent. They are the anchors in an organization. They fuel positivity and engagement and al’esprit de corps. They set the standards of excellence. They are the power brokers. They are the gateways that have achieved thresholds of excellence. They are the switch hitters; You can count on them to be the last ones standing. They face adversity with a smile. And most importantly, they are humble and they do not forget that they belong to a much larger community and they want to give back …if not for themselves, for the future generations. They are the lighthouses that look beyond the ocean and we are committed to provide tools to help them advance their aspirational and ideal motives that make a difference. We are with you all the way.
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The Unbearable Lightness of Being

Where the mind is without fear and the head is held high
Where knowledge is free
Where the world has not been broken up into fragments
By narrow domestic walls
Where words come out from the depth of truth
Where tireless striving stretches its arms towards perfection
Where the clear stream of reason has not lost its way
Into the dreary desert sand of dead habit
Where the mind is led forward by thee
Into ever-widening thought and action
Into that heaven of freedom, my Father, let my country awake.

–        Rabindranath  Tagore

Among the many fundamental debates in philosophy, one of the fundamental debates has been around the concept of free will. The debates have stemmed around two arguments associated with free will.

1)      Since future actions are governed by the circumstances of the present and the past, human beings future actions are predetermined on account of the learnings from the past.  Hence, the actions that happen are not truly a consequent of free will.

2)      The counter-argument is that future actions may not necessarily be determined and governed by the legacy of the present and the past, and hence leaves headroom for the individual to exercise free will.

Now one may wonder what determinism or lack of it has anything to do with the current state of things in an organizational context.  How is this relevant? Why are the abstract notions of determinism and free will important enough to be considered in the context of organizational evolution?  How does the meaning lend itself to structured institutions like business organizations, if you will, whose sole purpose is to create products and services to meet the market demand.

So we will throw a factual wrinkle in this line of thought. We will introduce now an element of chance. How does chance change the entire dialectic? Simply because chance is an unforeseen and random event that may not be pre-determined; in fact, a chance event may not have a causal trigger. And chance or luck could be meaningful enough to untether an organization and its folks to explore alternative paths.  It is how the organization and the people are aligned to take advantage of that random nondeterministic future that could make a huge difference to the long term fate of the organization.

The principle of inductive logic states that what is true for n and n+1 would be true for n+2.  The inductive logic creates predictability and hence organizations create pathways to exploit the logical extension of inductive logic. It is the most logical apparatus that exists to advance groups in a stable but robust manner to address the multitude of challenges that that they have to grapple with. After all, the market is governed by animal spirits! But let us think through this very carefully.  All competition or collaboration that occurs among groups to address the market demands result in homogenous behavior with general homogeneous outcomes.  Simply put, products and services become commoditized. Their variance is not unique and distinctive.  However, they could be just be distinctive enough to eke out enough profits in the margins before being absorbed into a bigger whole. At that point, identity is effaced over time.  Organizations gravitate to a singularity.  Unique value propositions wane over time.

So let us circle back to chance.  Chance is our hope to create divergence. Chance is the factoid that cancels out the inductive vector of industrial organization. Chance does not exist … it is not a “waiting for Godot” metaphor around the corner.  If it always did, it would have been imputed by the determinists in their inductive world and we would end up with a dystopian homogenous future.  Chance happens.  And sometimes it has a very short half-life. And if the organization and people are aligned and their mindset is adapted toward embracing and exploiting that fleeting factoid of chance, the consequences could be huge.  New models would emerge, new divergent paths would be traduced and society and markets would burst into a garden of colorful ideas in virtual oasis of new markets.

So now to tie this all to free will and to the unbearable lightness of being! It is the existence of chance that creates the opportunity to exercise free will on the part of an individual, but it is the organizations responsibility to allow the individual to unharness themselves from organization inertia. Thus, organizations have to perpetuate an environment wherein employees are afforded some headroom to break away.  And I don’t mean break away as in people leaving the organization to do their own gigs; I mean breakaway in thought and action within the boundaries of the organization to be open to element of chance and exploit it. Great organizations do not just encourage the lightness of being … unharnessing the talent but rather – the great organizations are the ones that make the lightness of being unbearable.  These individuals are left with nothing but an awareness and openness to chance to create incredible values … far more incredible and awe inspiring and momentous than a more serene state of general business as usual affairs.

Importance of Heroes and Narratives in Organizations

“My own heroes are the dreamers, those men and women who tried to make the world a better place than when they found it, whether in small ways or great ones. Some succeeded, some failed, most had mixed results… but it is the effort that’s heroic, as I see it. Win or lose, I admire those who fight the good fight.” – George Martin

 

Stories, like people and butterflies and songbirds’ eggs and human hearts and dreams, are also fragile things, made up of nothing stronger or more lasting than twenty-six letters and a handful of punctuation marks. Or they are words on the air, composed of sounds and ideas-abstract, invisible, gone once they’ve been spoken-and what could be more frail than that? But some stories, small, simple ones about setting out on adventures or people doing wonders, tales of miracles and monsters, have outlasted all the people who told them, and some of them have outlasted the lands in which they were created.” – Neil Gaiman

Heroes are not born. Circumstance and happenstance create heroes. In some cases, heroes are individuals who walk into a minefield of uncertainty that threatens their natural inclination for self-preservation in the interest of value systems and people that are alien to the individual. Thus, a private in an army is a hero already in the fact that he/she is walking into possible harm’s way and serving a cause to serve and protect people not necessarily related to him/her. One has heard the adage – one man’s freedom fighter is another person’s terrorist.  Thus, someone whom we call a terrorist may be perceived a hero by someone else. Thus, in this case …it all becomes a matter of a point of view, but the fundamental point remains – a hero is considered a person who abnegates and abjures their rights to self-preservation for some greater perceived good.

Sustaining innovation is a vital yet difficult task. Innovation requires the coordinated efforts of many actors to facilitate (1) the recombination of ideas to generate novelty, (2) real-time problem solving, and (3) linkages between present innovation efforts with past experiences and future aspirations. Innovation narratives are cultural mechanisms that address these coordination requirements by enabling translation. Specifically, innovation narratives are powerful mechanisms for translating ideas across the organization so that they are comprehensible and appear legitimate to others. Narratives also enable people to translate emergent situations that are ambiguous or equivocal so as to promote real-time problem solving. With their accumulation, innovation narratives provide a generative memory for organizations that enable people to translate ideas accumulated from particular instances of past innovation to inform current and future efforts.

The concept of collective identity has gained prominence within organizational theory as researchers have studied how it consequentially shapes organizational behavior. However, much less attention has been paid to the question of how nascent collective identities become legitimated. Although it is conventionally argued that membership expansion leads to collective identity legitimacy, one draws on the notion of cultural entrepreneurship to argue that the relationship is more complex and is culturally mediated by the stories told by group members. Legitimacy is more likely to be achieved when members articulate a clear defining collective identity story that identifies the group’s orienting purpose and core practices. Although membership expansion can undermine legitimation by introducing discrepant actors and practices to a collective identity, this potential downside is mitigated by compelling narratives, which help to coordinate expansion. And that is where the heroes can be interwoven into organizational theory and behavior. It is important to create environments that by happenstance and circumstance create heroes. The architecture of great organizations imputes heroes and narratives in their tapestry.

Heroes and narratives are instrumental in organizations that forge a pathway to long-term sustenance and growth. Hence, we are quick to idolize figures – Iacocca, Welch, Jobs, Ellison, Gates, Benioff, Gerstner, Branson, Bezos, Zuckerberg, Brin and Page, etc.  We learn narratives through case studies, news print, scholarly books on successful companies; and we emulate and steal and copy and parody and so much more … not necessarily because we want to be them but we want to create our identity in our own lair in ecosystems that move with or against the strongest currents.

So it is essential to celebrate the heroes and the narratives of great companies as an additional instrument to ignite engagement and foray into uncharted territories and conquer the unknown. Hence, personally I have also found solace in reading biographies of people who have made a difference, and a great pleasure in vicariously living through the ebbs and troughs of great companies

 

Forget Style…Choose Substance

(Guest Post from Seth McColley)

Six sentences.

That was all it took to make my week.

Last week, I received a note, via LinkedIn, from a guy that I worked with several years and two employers ago. Nothing deep. Nothing profound. Just a simple note asking me how I was doing, giving me a brief update on his end and then this…

“Thank you for being a positive influence and “stand up guy”. I have fond memories of our working relationship.”

I literally have not heard from this guy for years, so this note was an unexpected gift and a welcome surprise.

Those two simple sentences made an impact. Maybe it was the timing, maybe it was the relationship, maybe it was the memories of what we had endured together, but it hit me in a way that I certainly was not expecting. Sure I had a good working relationship with this guy. He was a Sales Manager and I was his HR Business Partner. We didn’t always see eye to eye and butted heads more than a few times, but at the end of the day we were both doing our part to manage and develop talent, grow sales and move the organization forward. Two simple sentences, but it gave me an incredible shot of encouragement to end the week.

How many times have you thought about reaching out to that old boss, a former peer, an employee you hired years ago, just to say ‘hello’, rattle their cage, find out how they’re doing or just tell them how much you appreciate them? Why do we sometimes feel that our words are not enough and that our gestures must be grander and greater? Our words are more powerful than we think and they carry more weight than we give them credit for. Never underestimate the power of your own words.

Now, this isn’t a post meant to encourage you to go tell those you love that you love them, because any day could be your last (although, it’s not a bad idea). But rather, it’s a simple reminder that recognition and praise can come in the simplest forms. Sometimes we spend so much time and energy “dressing up” recognition that it comes across as unauthentic, fake, pretentious and ill-timed that it just misses the mark. We choose style over substance.

Case in point…

I’d like to encourage you to reach out to one person this week and thank them for something. Let someone know that they’ve made a difference. Just one. My hope is that you’ll be able to make the kind of impact that this person had on me last week. Forget style…choose substance.