It might be relaxing with a book at the beach, playing with the kids, visiting some remote places, catching up on sleep or re-connecting with friends and family.

This time of the year is a wonderful opportunity to take some time off our busy schedules and re-charge our batteries.

And while you are relaxing or having some serious fun make sure you really re-energise yourself.

One thing, which is even more important than New Year Resolutions and carefully thought out plans is to start the new year with the “Best You”, which is basically the very simple “Being Healthy and Happy“.

I do believe that in order to realise any other goals and dreams you may have you need to have a sound body and a sound spirit.

Use the down-time to introduce and establish some healthy routines, which will turn into healthy habits. Here’s how…

It is much easier to start and succeed with new routines when we are relaxed and have more time:

1. Replace junk food with healthy snacks; experiment with some healthy meal recipes and have them ready for when you get back to work.
2. Rediscover the joy of sport and play – get involved with the kids, leave the car at home and walk; research your local sport and social clubs and join before the season starts – you will enjoy some early bird discounts as well (I got 5% discount off my tennis membership for next term). Also for some very simple health tips, check the new book from Michelle Bridges “5 Minutes a Day” - it will be the best $10 you spend this holiday.
3. Try and stick to a healthy bed-time routine (early to bed and early to rise) – even though it may be challenging it will keep your body clock in-tune and make the transition back to work very smooth.
4. De-clutter your home (and office) – get ready for a spring-start to the New Year by throwing/donating/selling all those things, which you never use but invariably get in the way of finding what you really need and enjoy.( I have 2 home de-cluttering rules: “Buy one – throw one” and a Saturday “Salvo Box”)
5. Learn a simple relaxation routine – I recommend chakra meditation, which is basically a combination of breathing and colour visualisation, which helps to relax your mind and body and clear up the energy blocks in your body. There are a lot of books and CDs on chakra meditation. If you haven’t meditated before this is a good one to start with because it’s easier to focus on colours in order to take your mind off the daily grind.
6. Get yourself a massager (hand-held, chair, foam roller). It is very handy for unblocking trapped energy and relieving pain in sore and tight muscles; also very easy to use. I use all 3.
7. Make sure you have a lot of fun.

This is a regular annual event, which demonstrates the benefits of Reserve service to employers and provides them with an opportunity to experience life as a Reservist.

During the Exercise, we were physically and mentally stretched (though to a much lesser degree that a Reservist would be) and enjoyed a range of educational, physical and social experiences.

This was a very intensive programme, extremely well organised by the Defence Reserves Support and was a showcase of brilliant implementation of sound management tactics and operations – project management, risk management, team building, training and development, motivation, creating a challenging but enjoyable environment.

I was very impressed with the skills and attitude of the Women in tough leadership positions – EES Director in South Australia Major Wendy Rydon , EES Project Officer WO2 Chris Wytwer and our Navy Team Leader LEUT Roxanne Price.

I thoroughly recommend the programme to other employers and encourage them to consider hiring a Reservist. As an associate of ours recently said on her Office Manager/Reservist – “This is the best employee I’ve ever had”.
Check the Defense support programs which will assist you in managing Reservist staff: Defence Reserves

2,500 workers were surveyed across different industries, regions and organisational levels.

The key findings of the survey reveal the Productivity Levels of a worker’s average day and the 4 Major Drivers of organisational productivity.

Individual Productivity Levels

In an average day people spent:

• only 58% on work that directly adds “real value”
• 18% on work that wasted time and effort
• 12% on networking with colleagues
• 9% on other activities that added value
• 3% on activities that added to personal development

Given the annual wage bill in Australia is approximately $606 billion, total organisational productivity wastage could be valued at as high as $109 billion.

4 Productivity Drivers

The 4 main influencer on individual productivity are considered to be:

1. People Management – 54% of respondents believe this to be the biggest driver
2.  Organisational Structure, Design and Operating Model – 23%
3.  Innovation – 15%
4.  Technology – 8%

The Specific Recommendations for each Productivity Driver are:

1. People Management

In order to boost productivity people’s full value needs to be realised and their motivational drivers truly understood.

Whilst 71% of the people surveyed are motivated to do their job to the best of their ability, only 62% believe their skills are strongly utilised by their employer, with 38% of people with skills which could be used more productively.

When it comes to motivation “The Work that I do” and “Work/Life balance” came as the first and second biggest motivators for all 35+ workers and “Salaries, Incentives and bonuses” were most important only to the 15-19 years group.

2. Organisational Structure, Design and Operating Model

The number one recommendations for improving organisational productivity is to Reduce bureaucracy and red tape.

In reducing bureaucracy and red tape you need to take a holistic approach across the organisation and to identify and eliminate regulatory inefficiencies without compromising quality and high standards.

Another two key recommendations in these area are Having a clear vision of the organisation’s future and Having confidence in leadership.

3. Innovation

The 3 key recommendations for using Innovation to boost productivity are Give innovation the right strategic focus and attention, Recognise and reward Innovation and Implement good ideas.

4. Technology

65% of respondents believe that New and improved technology would make their organisation more productive in the long term. 42% need the Right training to apply technology effectively.

So in summary in order to improve your organisational productivity:

1. Truly understand what drives your people and
2. Realise their full value/potential
3. Reduce beaucracy and red tape
4. Have a clear vision of your organisation’s future
5. Develop your leaders to inspire confidence and trust
6. Give innovation the right strategic focus and attention
7. Recognise and reward innovation and
8. Implement good ideas
9. Upgrade your technolgy and
10. Train your staff to apply technology effectively.

Denitza Genova

The trained business manager makes better business decisions more quickly!

Making great decisions faster improves business performance and businesses management, here’s how:

1. Managers need to think faster
2. Managers thinking needs to be organised

If you want to accelerate your business and your management decision-making now click on the image (video).

The Science behind Decision Making

There has been a lot of talk about the importance of Emotional Intelligence (EQ) and Intellectual Intelligence (IQ) at work (and in life)with the emphasis on EQ particularly for management and leadership positions.

One way to look at how these relate is to understand how our brain makes decisions. (in simple terms).

Our brain has two parts responsible for our emotions and logic.

The amygdala is the emotional part of the brain, the cortex is the rational.

However the amygdala has 10 times more neurons going to the cortex than it receives. So while the amygdala can send a lot of messages to the cortex, the cortex can’t do much in return.

Information reaches our emotional brain faster than the cortex. Therefore we are hardwired to react emotionally to people and situations (this is heightened in people with emotional issues).

What does this have to do with management?

It’s a common management reality nowadays that “we hit the ground running”, “decisions are made on the go”, “we’re fire-fighting a lot of the time but we’re good at it”.

It’s interesting that it’s almost escalated to a coveted status, a measure of the manager, the yet to be recognised KPI of management output – “Quantity of decisions per 15 min” (the average time managers spend on a single task).

So what actually is happening is that we are restricting the ability of our rational brain to take part in the decision making. A lot of decisions are made on gut feel and not followed through.

What can we do to manage better and make better decisions?

We are certainly not advocating analysis paralysis here, deliberating extensively and evaluating a never-ending stream of options.
The pace of life is only going to get faster so we just need to get our brain to think faster.

The solution is not as simple as we might want it to be but it makes a lot of sense.

The three (3) steps to getting our brain to think faster:

1. Accelerate your ability to process information faster
2. Improve your brain’s ability to sort and file information
3. Accelerate decision making

1. Process Information Faster
You need to accelerate your rational brain’s ability to process information faster:

a. Keep active: exercise sends oxygen to the brain; practice the inverted yoga pose in the office when you’re tired (no, you don’t have to be a Yogi to do so)
b. Prioritise
c. Build frameworks of information blocks

2. Rationally Sort and File Information
Accelerate your rational brain’s ability to sort and file information:

a. Break down complex information
b. Record and process in manageable chunks – the brain needs focus and clear instructions
c. Use your framework of information blocks

3. Accelerate Decision Making
Improve your rational brain’s ability to make decisions
a. Perform a mental scan of your framework of information blocks
b. Choose your information blocks
c. Make a decision

You might have noticed that there is a common element in all the 3 steps – it is the framework of information blocks.

Put simply this is your accumulated knowledge organised in a specific system which helps you to make sense of the world. It’s a like a big library where everything is stored in a strictly systematised order. The speed and quality of information retrieval from the library will depend on the size and organisation of this library.

The best way to build a strong library inside your brain is through formal, applied management training.

Formal management training provides the building blocks of your brain framework so that every piece of information could be quickly processed and filed for future use and not left circulating aimlessly in your brain space, soon to be cast to oblivion and forgotten forever.

Still not convinced?

Formal training works – here are some examples.

Those of you who love watching crime shows are probably fascinated about the uncanny ability of Profilers and Crime Investigators to work with seemingly unrelated clues and snippets of information to build the crime scene and the picture of the perpetrator.

I’m sure you’ve noticed their use of the white board or even better the glass screen displaying an info matrix which neatly brings all pieces together to spit out the answer in a blink of the eye. As professionals they are trained to use these tools and processes to getter better decisions faster.

Or why is it that if you spent more time and effort on maths at school (because of the evil teacher) later in life you find doing mental arithmetic and calculating your loan interest payment easier than your colleague who thought maths wasn’t their thing.

Why – because you received training.

Yes it does have something to do with the fact that you may have liked maths but more importantly it’s because you built your foundational framework of information blocks through training which then made adding more information to it much easier and faster than if you didn’t have it at all.

Have you built your management framework of information blocks? We can certainly help you with this: 

The advantage of the formally trained manager: Making great business decision fast every time.

Call 8212 4852 to get your free 30 minute management accelerator assessment and find out how management training can:
- generate a business improvement 30% or more,
– provide a potential cash return on investment of 154% and
– reduce costs by 25%.

Diploma of Management

I’m not sure which came first – the “Rules” or the “clichés”, but I’m pretty sure that the best way forward is to bust some of those restricting and unnecessary rules.

In business there should be no sacred cows, no no-go areas and certainly no, “we’ve always done it this way” mentality – and yes those attitudes ARE still alive and kicking in 2011!

Let’s look at those we should keep and cherish and let’s boot out those that have NO place in our organisations – and let’s start with one of everyone’s favourites – “Employees are our most valuable asset”

The first and most obvious problem here is that, generally speaking, assets are things you own and you certainly don’t own employees. And don’t think that Contracts of Employment, Awards or any of that contractual obligation stuff actually helps with the “owning” thing! ALL employees are really sub-contractors that provide their services for a fee. Only for you it’s called a salary.

Now anyone who has managed for more than a day knows that some employees are better described as “liabilities”, rather than assets – but I believe that if we assumed that they’re are ALL liabilities, it would help us, as Managers, to look at how to get the best ROI.

So the first thing we need to do is to re-assess the real (as opposed to perceived) value of our employees and make the best decisions concerning them as if they were financial assets.

It was also interesting to note how quickly these “most valuable assets” were disposed of in the recent GFC…

Another favourite of ours is the “Work / Life Balance” – you know that perennial myth that we’ve all been chasing since we were old enough to realise that it might be an issue. Way too many issues to go into there in any detail, but here’s a few to get you thinking…

a)  Surely it’s in the wrong order? Surely it’s supposed to be a Life / Work balance, isn’t it?

b) The myth assumes, incorrectly in our view, that these are two separate entities. That work and life exist as independent bodies of time and experiences and that separation by “balance” is either desirable or necessary. But it is inevitable that there is a huge overlap between the two and that is not necessarily a bad thing.

c) The main issue here is that all the focus seems to be on either prioritising while you are at work and then doing the same, but less formally, while you at home. If however we actually sat down and prioritised our LIFE, including work AND home/family to fit our value system, then the balancing act would be superfluous and the guilt that we’re supposed to feel if we choose to work 60 hours per week would disappear.

d)  If I was being cynical, (as if!) I might argue that the term “workaholic” could be used to describe someone who uses their job to get some well-deserved time away from their loved ones…

e)  But, to be fair, not many people on their death-bed are heard to say, “Gee, I wish I’d spent more time at the office!”

OK, last one for now – “The More You Do, the Less Gets Done!”

This one is a particularly common issue with our clients and we think that it’s because the desired and, to a certain extent, esteemed “spirit of mateship” that exists in Australia actually gets in the way of good leadership. We seem to really struggle with the Mate vs. Manager or Boss vs. Buddy problem, to the point where it’s easier to do the job yourself and thus avoid the hard conversations that we really should be having.

If you can step back and then up and take the “balcony” view, rather than being on the stage, this will certainly help you to avoid some of the potential battles. (I’ve never liked the “helicopter view” and if you’ve ever been in one, you’ll know exactly why I don’t like it!)

And another thing that will particularly help the technician who’s been promoted to Supervisor / Manager – it is important to be mediocre in order to be brilliant! “What?” I hear you cry…let me explain. As a technician you probably excelled. But as a Manager you need to excel at Managing and it’s virtually impossible to do both. You may want to continue to excel at the technical stuff, but you sure don’t need to. You need to focus on the Managing and let everyone you work with deal with the technical issues. I know, I know…it’s hard because that was your comfort zone – but there’s a technical phrase for this – it’s called “Growing up!”

So just a few of the things that we need to do on a regular basis in order for the Management Realty Check to work! None of them are easy, but hey, whoever told you that life as a Manager was easy, was lying to you!

Enjoy!!!

Alan Slater

“It’s sad, so sad

According to Elton John, “Sorry” seems to be the hardest word. But there’s a word that’s only 40% of the length of sorry and, I believe, is infinitely harder to say.

That word is, “No”.

Despite this great difficulty, “no” is ranked anywhere between 45th to 84th most common word in the English language, depending on which list you look at – but then, “sorry” isn’t in the top 500, allegedly, so maybe it is harder…

You know how the story goes…

You finally get around to organising that weekend away with the family – you know, the one you’ve been promising for the last 100 weekends – when your boss comes to you on Thursday afternoon and says. “We’ve just found out that we’ve won the new contract we’ve been chasing for the last four months! But it’s a condition of the client that we must have all the logistics in place by next Friday. You’re the only one here that can do that, but I’m afraid it’s going to mean you working this weekend”

So why can’t you say “no”? Because the whole team is depending on you? Because the annual reviews are due in the next couple of weeks and you really don’t want a black mark against your name at this time of year? Or do you just lack the assertiveness to spit it out?

It wouldn’t be so bad, but this is the umpteenth time this has happened to you over the last few years – you just seem to have reluctantly accepted the role of “Hero-of-the-moment”, even if it doesn’t come with any recognition or dollar signs attached to it.

Saying, “Yes” when we really mean (and want to say!), “No” is one of the biggest causes of extra work and associated stress and the main problem is that we start the process from the wrong end. We start from, “What will people think of me? Will I lose their respect and damage our relationship.” That’s the “Guilt-Trip” worry.

Then there’s the fear of criticism that might undermine our confidence and competence. Even worse, when we all crave being accepted and liked, there’s the fear of rejection. And deep down we feel that if we use our power of “no”, then we’ll be seen as aggressive.

All of these, of course, could be true – but how many are likely to be true?

My “MUST DO” hints on saying “No” confidently, respectfully and without guilt: -

1. If you know that there is a storm coming, look for the umbrella now – not when it’s already pouring down!

2. Never be afraid to think first or call for a time-out. People don’t want your kneejerk reaction. They want the reaction that you will follow through on.

3. Don’t start from “no” – start from saying “yes” to yourself regarding those things you hold to be important – be that family, friends, activities you enjoy or commitments that you have made.

4. Ensure that those things reflect your core values – those things that hold as central to who you are and know where your line in the sand is!

5. Work out some alternatives to just plain “no” – options for the other person to consider.

6. If that doesn’t work, have a Plan B – but remember that line in the sand!

7. Choose your battles wisely – some people just automatically say “no” because that’s their nature and then change their minds in seconds. Try not to become known as “The No Person!”

8. In all situations (potential “yes” and potential “no”), ask yourself, “What’s the worst that could happen? And am I prepared to accept the consequences of my actions?”

The key to successfully saying “no” is to make it as positive as you can and that’s not a skill that comes naturally to many people.
So if you’d like some help with that, please feel free to give me a call. I promise not to say “no” to your call!

Or get some more information on our EQ Management tool here.

Alan

So I didn’t know what to expect when Steve Wozniak took the stage. I did expect him to read his presentation, since, pardon the stereotype, a lot of engineers like Steve feel uncomfortable presenting without “security blankets”.

But it wasn’t the case with Steve. He didn’t read his speech, and he didn’t have sensational facts and stories to tell us.

He just told his story and the story of Apple Computers, and in doing so he captured the undivided attention of every single person in the hall for a whole hour.

Such is the power of Story Telling, it is not just for kids, it is for adults in business suits as well. And this skill is priceless. But I will get back to it later.

For now I just want to present the profile of the Inspirational Leader, from the way I saw and heard Steve Wozniak.

1. Passionate about his “job” –

He talks with great passion about what he does, has very expressive body language, is animated, and uses a lot of gesticulating

2. Unique and life-long approach to learning -

Steve started learning and experimenting from a very young age; growing up in Silicon Valley he had the most conducive environment in which to develop his skills and knowledge.

He has a unique way of learning – “The best things I’ve learned I didn’t read in a book – I wrote the book myself! It’s better – you think through the process!”

3. Hard Work –

An example of his passion and work ethic he gave was of his time at Hewlett Packard – he used to start his work day at 5.30 am each morning, read all the latest news on electronics to keep up to date.
And he didn’t do that because of career aspiration – he just loved being an engineer for Hewlett Packard

4. Entrepreneurial mind-set –

He always looks at the latest technology, not with the view of having and using but of having and making it better.
He said numerous times in his presentation, referring to new competing technology, – “ I’ve got to have this – I’ve got to design it!”

Steve Wozniak is not a typical innovator, he doesn’t start things from scratch, more often than not he sees something and designs his version of it – better, different.

5. Child-like curiosity and zest to invent and play with new toys

Steve told the story about the Breaker Game – the pong game he invented working on his design for 4 days with no sleep!!!! Such was his drive, which was greatly fuelled by his desire to do something for the kids – He kept telling himself “I’ve gotta do this for the kids”

6. Great Story Teller

Totally mesmerised the audience to the extent that everyone wanted to be part of his world and share the excitement (how important is this for your business and your staff engagement!!!!)

7. Finding the right business partner

This is the point at which Steve Jobs come on the scene.
Steve Wozniak gives Steve Jobs a lot of credit for the success of Apple as a company. He recognised that without Steve’s business acumen they wouldn’t be where they are now! “ I was just inventing things for myself. Steve was the sales person!”

8. Social thinker

It is interesting but not surprising, given the image of the Apple Brand, that what really drove Steve Wozniak throughout his creative life, was not the desire to make more money or be famous or recognised, but the desire to give.

“How can I benefit people?”  I wasn’t selling them to the other students (talking about his inventions during his Uni years) – I was giving them away so that more people could use them and make computers more popular.

Based on this values and motivation it is easy to understand now why Apple products are not as restrictive as Microsoft and can be easily expanded and upgraded (the example given was of Apple 2, a very successful product for the company).

9. Build your team of people sharing the same values

“I put together a team that believed in people so that they could create something good for the user”

So here is a truly inspirational entrepreneur, who is not self-serving but led by a dream to build something better for the world.

I think all of us can learn something from people like Steve and it is a privilege to get close, even for a moment, to their world.

And whilst there are many useful traits we can try and emulate, the story telling talent that Steve has is the dark horse. It is something that business leaders underestimate…

So I’d like to offer you the opportunity to learn more about The art and science of Story Telling in business.
We are putting together a short working session on this topic, which will be facilitated by Alan Slater, whom many of you know.

Please register your interest with us and we will send you further information once we establish level of interest.

Denitza Genova

(summary, comments and interpretation by Denitza Genova)

Productivity growth has been in decline since 2000 (still growing but at declining rate of 1% compared to 3.5% in the previous decade).

Reasons:

• Decline in population growth and levels of labour force participation; increase in labour costs and smaller pool of capable workforce
• Capacity constraints and shortages of skilled labour  plus infrastructure bottlenecks have caused an increase of down-time
• The increase of corporate profitability has led to diminished importance of the need to continuously improve performance;

This has changed in the last 2 years with businesses on harder times and refocusing on increasing efficiency (via lean manufacturing programmes, process reengineering, reducing waste, service blueprinting for example.)

We provide services in those blue areas in the form of training to improve skills or project facilitation with specific solutions for the clients.

• Stifling Government Regulations

This is a really sore point for us as we see a lot of examples of wasted human and financial resources in the battle to keep the organisation compliant.

Saul’s Solutions to the Productivity slump are:

• Re-invigorate commitment to productivity enhancing reforms
• Taxation Reform
• Further Promotion of Education and Skills Acquisition
•  Targeted Infrastructure Investment
• Serious effort to increase Australia’s innovation (better access to risk finance)
• Greater Awareness of the productivity impact of safety and risk-aversion policies

Let’s dig a bit deeper in the last point.

It has certainly been a case of “Government decision-making triggered by worst-case scenario” as Saul Eslake put it. “There has been an increase in regulation motivated by an apparent desire to eliminate risk irrespective of probability or cost.
As a result managers spend more time on Compliance and Risk Aversion than on running the business”.

I couldn’t have put it better.

There was a question from the audience as to who was at the bottom of all the risk-aversion policies – the Lawyers or the Government Legislators – to which the answer was that there are a lot of Lawyers in the Government…;

The other contributor is also the increased media attention to “victims of injustice” where the “injustice” may be the neglect of the local council to repair the pavers on which someone tripped and broke a leg or the family of a drowned person who sued the council for lack of drowning signs on the beach.

Excessive regulation is counterproductive and stifles innovation and entrepreneurship. It sucks a lot of the creative energy and passion that people have for what they do and for their clients.

It has gone so far that a recent discussion with an Operations Manager in one of our manufacturing client company declared that soon there will not be any manufacturing jobs in Australia “safe” enough to actually do – and the growing black market is a testament to the validity of this statement!

What can we do?

Become aware that it is not just your company who is drowning in the sea of red-tape and ludicrous rules and regulations ….it’s every other company, it’s all of us who are affected

• Start challenging the policy makers and the newly hatched OH&S advisors who come and demand to know how you can ensure 100% safety in a manual labour intensive company, so if you happen to give them the wrong answer you get fired regardless of your business acumen and actual abilities to get the job done and create a safe workplace.

Now on the note of challenging and having confronting conversation we have recently come to realise that Australians find this somewhat hard.

Maybe this is why the “Ability to say No” workshops, the flavour of the month in some big organisations are not as superfluous as you might think.
In case you are interested in becoming more adept in achieving a positive outcome from tricky or “hard” conversations, we will be putting together short working sessions on this subject so let us know if you want to participate.

•  While we are waiting for the compliance / political correctness / super-safety pendulum to swing back and bring things to some degree of normality, make sure that everything else you do is as efficient as it can be – look at improving your prioritising skills, cut down on waste and improve your key processes, incuding customer service.

Denitza Genova

BMktg, BMgmt, MBA

We weren’t able to capture all of it for you, but here are some of the highlights:

On the heated carbon tax debate:

One radical opinion in support of government intervention to reduce carbon emissions was that of Goran Roos, “Thinker in Residence” in SA who gave the example of Sweden, where the Government have been imposing strict regulations on all companies who didn’t innovate their practices to become carbon efficient.

As a result Sweden, as a country, is very close to becoming carbon-neutral, which is very impressive!

Our take on the issue of carbon dioxide reduction, business and politics:

Regardless of the link between carbon dioxide and global warming, carbon dioxide in particular and pollution in general are predominately the by-products of waste.

Any waste is a sign of inefficient business activity and as such should always be reduced and / or eliminated.

Then it’s a question of what is the best way to do that, in which case we go back to the 2 basic choices of pain or gain.

The government has chosen the pain strategy – i.e. pay to avoid pain – rather than incentivise business to reduce waste (giving contract preferences to carbon neutral businesses, etc)

The first one is more efficient in the short term and serves to score political points.

The second one is more effective in the long run but obviously less impacting in the short term
Any thoughts on this…?

Lack of life-long learning – presents a serious problem which needs to be dramatically improved…

We can certainly help in this area – please check our learning opportunities -

Productivity is struggling – there hasn’t been any significant improvements in Productivity in the last 10 years

Saul Eslake, Director of the Productivity Growth Programme, delivered a specific presentation on Productivity discussed in a separate topic.

Some key indicators of the Australian economy:

• The GDP plunged 1.2% in the first quarter, the worst result since the last recession in early 1991, mainly attributable to the blow to exports from the floods and cyclones of the past summer
• Export – by year 2015, 70% of Australian Exports will be going to China (33.1%), Japan (17.4%), India (11.3%) and Korea (8.9%). The former biggest export destinations of USA, NZ, UK and Germany will account for only 12. 5% of export
• Investment expansion in Australia with investment levels of $174 billion; however this is not mirrored by Productivity Gains; Business Credit growth is down and it has been for the last 2 years
• Short term forecast – slow or contracting growth

Denitza Genova

BMktg, BMgmt, MBA

Malcolm Gladwell: Understanding Entrepreneurs

“Why do some ideas or behaviours take off and spread successfully – and others don’t? The best messages and ideas behave like viruses, and understanding the laws of epidemics can shed new insight in how to rise above the clamour of voices trying to reach consumers.

Named one of Time Magazine’s 100 Most Influential People, Malcolm Gladwell has been a staff writer with The New Yorker magazine since 1996 and has an incomparable gift for interpreting new ideas in the social sciences and making them understandable, practical and valuable to business.” Extract from the business congress website

Key Points from Malcolm’s Presentation:

• The key characteristics of successful entrepreneurs include intelligence, courage and having no fear of social exclusion
• Successful Entrepreneurs have a Bi-Modal attitude to Risk, which is often misunderstood.

Entrepreneurs are High Social Risk Takers but very Low Operational Risk Takers.
The examples he used to explain the difference between the two were of Professor Emil Freireich, who undertook pioneering research into childhood leukemia and of Ingvar Kamprad, the IKEA founder.

In the example of Freireich, Malcolm built a very compelling story of courage and huge social risk-taking, explaining how Freireich risked his reputation and future as a doctor by proposing a toxic cocktail of drugs to treat a disease which was at the time (1950s) 100% fatal.

And whilst this was a big risk for him and for the Cancer Council behind his work, the Operational Risk he was taking was low, in the sense that without his proposed treatment the chance of death was 100%, and any successful outcome would represent a significant improvement.

To reinforce his point, Gladwell cited another entrepreneur – Ingvar Kamprad, who founded IKEA around the same time Freireich was finding a cure for childhood leukaemia. Kamprad decided to manufacture in Poland where labour costs are a quarter of that in his native Sweden and natural resources are abundant.
“The operational risk Kamprad took is very small but the social risk is huge,” said Gladwell. “The Cold War was at its height in 1961 and he was vilified, considered a traitor and subject to abuse.”

To be Operationally Risk Averse one needs to be very smart according to Malcolm, to be willing to work very hard and not deviate from their chosen path regardless of external pressures (society opinion).

In order to encourage Entrepreneurship we need to encourage diversity not only gender and race, but also look for talent outside of the realm of business – in  medicine, science, philosophy, etc

Further thoughts and questions for you provoked by Malcolm’s presentation:

How do we encourage entrepreneurship and innovation when:

• Australia’s is lagging behind in comparison to other developed nations – it ranks 18th (Global Innovation Index)?
• If risk-taking and experimentation are at the heart of innovation and entrepreneurship, what will the future hold for radical ideas given the current stifling level of safety and risk-averse regulation?

What do you think?

Denitza Genova

BMkt,BMgmt, MBA