The 21 Irrefutable Laws of Leadership

Due to hectic work schedule, I have selected a relatively easier to read book for this period. John C. Maxwell's series of books on leadership and motivation is quite famous and I treat the book like a reminder. A reminder to do good things. A reminder to motivate people around me. A reminder to treat myself (especially my mind and body) good. Most of the time, the lessons in motivational books are common sense but we just keep forgetting it. That is my approach to reading motivational books, i.e. not too serious and treat it like watching tv or listening to music.

Some good points from the book which I try to remember and practise daily:

1) Your leadership ability - for better or for worse - always determine your effectiveness and the potential impact of your organization.

2) The higher you want to climb, the more you need leadership.

3) Whatever you will accomplish is restricted by your ability to lead others. (A few years ago, an Architect was complaining to me that being an architect is difficult as you will need people to perform for you in order for a project to be successful and he would not recommend his son to be an architect or any other jobs where you cannot work alone. He cites profession such as doctor or IT as the preferred profession as you will be less reliant or others. At about the same time, I also met a businessman. He told me that in order to be successful, you need to motivates people to perform for you. And the more people works for you, the better it is. Can you guess who is the more successful of the two?)

4) And if you don't have influence, you will never be able to lead others.

5) Leadership is influence - nothing more, nothing less.

6) It's not the position that makes the leader; it's the leader that makes the position. (I try to remind myself this everytime I work in a team. If people don't listen to my suggestions, it simply means I have to try harder to convince them and also do more homework in order to make sure the idea is a good one. You cannot force people to accept your views because of your seniority)

7) If your hope is to make a fortune in a day, you're not going to be successful. (Perseverance is the key. I know I know, it's cliche but then how many really have the stamina and determination to last the distance. Celebrate small wins and as long you make small progress everyday, it is still progress)

8) Benjamin Disraeli, former British prime minister, wisely commented, "To be conscious that you are ignorant of the facts is a great step to knowledge."

9) To become an excellent leader, you need to work on it every day. (More hard work ahead)

10) When he was twelve, young Roosevelt's father told him, "You have the mind, but you have not the body, and without the help of the body the mind cannot go as far as it should. You should make the body."

11) Former General Electric chairman Jack Welch asserts, "A good leader remains focused.....Controlling your direction is better than being controlled by it." (Are you shaping your own destiny or you let others shape your destiny?)

12) "A leader is one who sees more than others see, who sees farther than others see, and who sees before others do." - Leroy Eims

13) ..........if you fail to learn from your mistakes, you're going to fail again and again. (I usually tells myself and my teammates that it is ok to make mistakes as long as you don't repeat it again)

14) No matter how good a leader you are, you yourself will not have all the answers.

15) When you prepare well, you convey confidence and trust to people.

16) If you can't give credit (and take blame), you will drown in your inability to inspire.

17) .......leaders add value by serving others.

18) Are you making things better for the people who follow you? (Important to differentiate with exploiting people)

19) You must give some time to your fellow man. For remember, you don't live in a world all your own. Your brothers are here too.

20) Truly value others.

21) Leaders who add value by serving believe in their people before their people believe in them and serve others before they are served.

22) Make ourselves more valuable to others.

23) Know and relate to what others value.

24) ......mature leaders listen, learn, and then lead.

25) ......attitude of the leader affects the atmosphere of the office. (Have you ever wondered what kind of atmosphere you generate in the office? Positive, negative or invisible?)

26) Trust is the foundation of leadership. 

27) People will tolerate honest mistakes, but if you violate their trust you will find it very difficult to ever regain their confidence.

28) How do leaders earn respect? By making sound decisions, by admitting their mistakes, and by putting what's best for their followers and the organization ahead of their personal agendas.

29) Don't play politics, role play, or pretend to be anything you're not. To strengthen your discipline, do the right things every day regardless of how you feel.

30) .......people naturally follow leaders stronger than themselves.

31) ......followers are attracted to people who are better leaders than themselves.

32) One of the greatest potential pitfalls for natural leaders is relying on talent alone.

33) One measure of leadership is the caliber of people who choose to follow you. The second thing you should do is to see how your people respond when you ask for commitment or change.

34) How you see the world around you is determined by who you are.

35) Believe it or not, who you attract is not determined by what you want. It's determined by who you are.

36) Law of Magnetism: who you are is who you attract.

37) If you want to attract better people, become the kind of person you desire to attract.

38) When it comes to working with people, the heart comes before the head.

39) For leaders to be effective, they need to connect with people.

40) You must know who you are and have confidence in yourself if you desire to connect with others.

41) I adapt to others; I don't expect them to adapt to me.

42) .....focus on others, not yourself.

43) French general Napoleon Bonaparte said, "Leaders are dealers in hope." That is so true. When you give people hope, you give them a future.

44) People don't care how much you know until they know how much you care.

45) "You can do what I cannot do. I can do what you cannot do. Together we can do great things" - Mother Theresa.

46) Seek for your inner circle people who help you improve.

47) President Roosevelt: "The best executive is the one who has sense enough to pick good men to do what he wants done, and the self-restraint enough to keep from meddling with them while they do it."

48) If you believe in others, they will believe in themselves. (Don't trust people blindly though!)

49) Enlarging others makes you larger.

50) ......vision without action achieves nothing. (In simple terms, daydreaming won't get you anywhere)

51) People buy into the leader first, then the leader's vision.

52) Every message that people receive is filtered through the messenger who delivers it.

53) Every organization requires diverse talents to succeed.

54) Pareto Principle. (Also known as the 80/20 principle - refer to my earlier posting on the book 80/20 Individual).

55) If I'm doing something that's not necessary, I should eliminate it. If I'm doing something that's necessary but not required of me personally, I need to delegate it.

56) .......greatest success comes only when you focus your people on what really matters.

57) The heart of good leadership is sacrifice.

58) .....greatest mistake made by entrepreneurs and other people in business is not knowing when to cut their losses or when to increase their investment to maximise their gains. (The story of "Who moved my cheese" strikes a chord in demonstrating how we do not know when to cut our losses and keep pining for false hopes)

59) Only the right action at the right time will bring success.

60) If you keep adding value to the leaders you lead, then they will be willing to stay with you. Do that long enough, and they may never want to leave.

61) As you work to build your organization, remember this:

- Personnel determine the potential of the organization.
- Relationships determine the morale of the organization.
- Structure determines the size of the organization.
- Vision determines the direction of the organization.
- Leadership determines the success of the organization.

I find the last few pointers simple but powerful. I have observed that my current organisation possesses most of the above traits (of course, there are plenty of rooms for improvement). However, attrition rates are increasing especially for the relatively younger engineers. It strikes me that while my Managing Director has successfully developed two great Directors and my two Directors have also managed to influence another team of Associates and Associate Directors. If the Senior Engineers who are working with me are leaving for greener pastures, part of the blame should be on me as I work with them more than the two Senior Directors, right?

My personal challenge would be to help younger colleagues to become better leaders and have a more meaningful life. I certainly hope to leave a legacy of helping others sincerely. Well, I hope the above review helps you towards meaningful leadership. Good luck.

Doing Business or Working in Malaysia

For those who are not familiar with Malaysia, I guess one of the most important factors to be considered about doing business in Malaysia is about its multi-ethnicity. As such, there are bound to be differences between dealing with government linked companies which are predominantly managed by Malays. The other two main ethnic groups in West Malaysia are the Chinese who traditionally concentrates in areas such as retail and trading while Indians have significant presence in advisory services such as law and IT. For this first posting, I will offer some opinions on some business characteristics of companies run by Chinese since I am a Chinese in the first place. Again, there may be some differences of opinions given the fact that Chinese in Malaysia's education background can be either National language (Malay)-medium and Chinese-medium based. I happen to fall in the former category and as such, my views are influenced to a large degree to my education background:

Some characteristics of small and medium size Chinese-run companies:

1) Family-based business. Chinese usually put trusts in their family members and as such, you tend to see father handing over the business to his son/daughter and relatives filling up key positions in the company.

2) Titles are important. Very often, you will observe in business cards with long list of affiliations. Some may be offended if you don't address them with their conferred titles such as Datuk, Sir, etc.

3) Direct comments are usually not recommended. It will be perceived as lack of respect. It has to be done subtlely especially the comments are directed to someone who is older. The elders have to be respected and the terms "loss of face" in Chinese which means loss of respect is something you don't want to cause to the other party.

4) Hierarchy is important. This includes seating arrangements in official functions, lines of communications, etc.

5) Food is important. Guests are usually treated to fine Chinese dining.

6) Very hardworking. Typical of Asians anyway. Emphasis on work-life balance is usually less compared to Western counterparts. Office and private times are often blurred. Work related phone calls after office hours and weekends are normal.

7) Small gifts to guests are welcomed.

8) Major holidays are the Chinese New Year. Expect long breaks during this period and not during Christmas. Work on Chinese New Year eve is a big NO as most Chinese will spend the evening having reunion dinner with family members.

9) Mandarin is the most common language. Other common dialects include Hokkien, Cantonese and Hakka.

10) For business conversations, profanity is seldom used. For example, I have met an American who use the word "f**k" casually in his conversations even when he is not angry. Not common here unless you are dealing with blue collar workers.

Of course, the above are GENERAL observations. There are always exceptions and with the increasingly flat world, I guess the exceptions are increasingly becoming normal. Anyway, others may have their opinions and are welcome to give their comments.

The McKinsey Mind: Understanding and Implementing the Problem-Solving Tools and Management Techniques of the World's Top Strategic Consulting Firm

The word McKinsey is almost synonymous with strategic and business consulting as it has established itself as one of the most successful business consulting firm in the world. What differentiates it further is that anybody trained in the McKinsey way is usually much sought after in the corporate world and it's alumni heads some of the biggest corporations in the world. As such, naturally I was drawn to learn from them and see what makes them tick. This book written by Ethan M. Rasiel and Paul N. Friga provides some insight into the management techniques employed by McKinsey. What I find really useful is on knowledge management especially for consulting business. As we know, consulting company don't have much (if any) hard assets and their business revolves around knowledge. As such, without a proper knowledge management system, a consulting company cannot be sustainable which explains why many consulting company fades away after its founder retires or is no longer around. As such, for consulting company, knowledge management is everything and the acid test is whether the company can last after its founder retires. Even for non-consulting company, knowledge management is very important in order to be ahead of its competitors. For example, Wal-Mart prides itself as having the most efficient supply chain management in the world by utilising the knowledge it gathers from its customers and adjusting their inventory based on the knowledge gathered. Similarly, I am sure Google fine tunes its search engine by continuously managing the feedback (knowledge) from its users.

For an example which I am familiar with, let's take property developer for instance. A good property developer should have a knowledge management system which continuously document best practices and lessons learnt in order to provide the best for its customers. This way, better time can be spent on improving their products rather than focusing on minimising mistakes. For example, a database on the following would be most useful:

a) Typical cost per square foot associated with different development, e.g. high-rise, commercial, office, etc.
b) Things to avoid which will affect buyers' decision such as "feng shui", e.g. facing direction of units, location of bath rooms, etc.
c) Optimum structural system for different development and what is the criteria for selection.
d) Optimum foundation system for different development and location of the site.
e) Things to avoid/risks associated with different ground conditions, e.g. soft ground, hillside, coastal areas, limestone, etc.
f) "Wow" factors for buyers.
g) Checklist for its consultants on its expectations.

And the list goes on. In addition, knowledge management does not mean managing documents. It is about creating a culture where knowledge can be freely shared inside the organisation. However, it is important to realise that a too rigid system may harm the company as a company does not want its personnel just to follow checklists without doing their own thinking. As such, it is important to strike a balance between providing enough guidance without restricting the creative and innovative juices of one's personnel. Who says it is easy to build a successful organisation? Everything is about the right balance. Happy reading and learning!

The following are some of the exerpts from the book which I will refer back from time to time in order to improve myself:

1) McKinsey concept of MECE (Mutually Exclusive, Collectively Exhaustive) in the context of problem solving means separating your problem into distinct, nonoverlapping issues while making sure that no issues relevant to your problem have been overlooked.

2) In the generic approach to framing the problem, McKinsey-ites put this concept into practice by breaking the problem before them into its component elements. (In my opinion, this is an important traits of a good leader, i.e. the ability to break the problem into its component elements. When this is done, the problem appears less overwhelming and can be tackled one by one. The last thing you need is to be overwhelmed by the problem because it seems too daunting to be solved).

3) For your brainstorming sessions to succeed, you should follow these rules:

a) First, there are no bad ideas.
b) Second, there are no dumb questions.
c) Third, be prepared to "kill your babies" (i.e. to see your ideas get shot down, and to pull the trigger yourself if necessary).
d) Fourth, know when to say when: don't let brainstorming drag past the point of diminishing returns.
e) Last and most important, get it down on paper.

4) On decision making: sooner or later every executive has to make a major decision based on gut instinct (This may sound trivial but in my opinion, it is one of the most difficult trait to master in order to become a good leader. A person who is afraid or lack the insight to make decision based on gut instinct usually will be paralysed by the lack of information. In fact, the French has a term for this quality - coup d'oeil - an intellect that, even in the darkest hour, retains some glimmerings of the inner light which lead to truth. Again, don't misunderstand this with making decisions recklessly which is different!).

5) When doing your research, you don't want to get as much information as possible, you want to get the most important information as quickly as possible.

6) Do you make any arguments without supporting facts? If so, this is a red flag.

7) Seven tips for successful interviews:

a) Have the interviewee's boss set up the meeting.
b) Interview in pairs.
c) Listen, don't lead.
d) Paraphrase, paraphrase, paraphrase.
e) Use the indirect approach.
f) Don't ask for too much.
g) Adopt the Columbo tactic. This is based on a TV character in the 1970s, Lieutenant Columbo played by Peter Falk. He would often finish questioning a suspect and then pause by the door to ask one more question - usually a zinger. This tactic succeeded because the suspects often dropped their guard and allowed the truth to come out. You can try this approach if you think an interviewee is holding out on you.

8) Effective managers spend a majority of their time listening.

9) Data are facts, observations about occurrences, and numbers. Information is a collection and some synthesis of data. Knowledge is the mix of information, experience, and context in a value-adding process.

10) Knowledge Management (KM) is the systematic process by which an organization maximises the value of the uncodified and codified knowledge in the firm.

11) McKinsey maintains two primary database. One called PD-Net, includes previous reports generated and cleansed for sharing among the Firm's consultants. You could think of it as the "know what" database. The other database is a directory of all the Firm's experts in various industries and practice areas; call it the "know who" database.

12) On KM implementation efforts:

a) Develop a rapid-response culture.
b) Acquire external knowledge.
c) Control the quality of your input: garbage in, garbage out.

13) Remember than an organization can only do so much at one time. Concentrate on the big wins first. (An important trait of a good leader - the ability to prioritize).

14) You must make sure the solution fits your client.

15) ..........even if the particular analysis you are doing necessitates gigabyte-sized models and complex mathematics, try to simplify the results of that analysis to a level than an educated outsider can understand.

16) On the subject of buy-in, McKinsey alumni have one principle inscribed on their hearts: prewire everything.

17) One obvious lesson from McKinsey is that managing the team is a separate, distinct and important task. This is not widely appreciated in other organizations. (This sounds simple but many organizations fail to appreciate it. For example, a technical manager in an engineering consulting firm usually concentrates on managing technical solutions for the client with virtually negligible time spent on managing his team. Companies usually emphasize the importance of team without allocating sufficient time and resources to manage the team. IBM's structure is good in this respect where they make distinct differences between technical manager, people manager, subject matter expert, etc.)

18) On selecting and recruiting team members:

a) Consider not just demonstrated ability, but potential ability.
b) Appreciate the value of diversity.
c) Apply structure to recruiting efforts.

19) ........learning by walking around - random meetings to connect with team members outside of scheduled meetings.

20) Performance assessment should meet three criteria. It should be objective, be based on expectations that were set in advance, and account only for events that were within the control of the person you are mentoring.

21) It is important to point out weaknesses and development opportunities but to avoid going overboard and making every comment a "suggestion for improvement".  (Don't make performance review demoralizing with too many negative comments).

22) Rather than sticking a foot in the door and barging in cold, build up a reputation and let it preceed you. (McKinsey approach to indirect selling).

23) On client service:

a) Engage the client in the process.
b) Always look over your shoulder.
c) Keep the client team on your side.
d) Learn to deal with liability client team members.
e) Pluck the low-hanging fruit.
f) Get buy-in throughout the organization.

24) ........the locus of problem solving: it is best done in the "client's backyard".

25) ........before you head off to the next problem, present a clear implementation plan that includes exactly what should be done, by whom, and when. This applies not only to consulting projects but also to internal projects that hinge on future activities for eventual value generation.

26) If you view your job as a challenge to help clients win, rather than focusing on how you win, good things will happen. (Important to remember this point especially for consulting business).

27) You can't do everything, so don't try.

28) In a modern organization, you can't last very long as a one-man band.

In summary, this book provides principles which have served McKinsey well. At the end of the day, management is about getting the best out of your team members in order to solve client's problems. The techniques offered by the book would certainly help and for me, the book is useful as a reminder when you get overwhelmed by daily deadlines (aren't we all). So, as a final word, while it is important to manage your team, I guess the most important person to manage is yourself. Have a good and healthy life!

Why leaders fail to motivate people (By Victor S.L. Tan)

This article is written by Victor S.L. Tan who is the chief executive officer of KL Strategic Change Consulting Group which was published in a local newspaper. The article is well written and I thought it is worthwhile to share it here:

There are many reasons why many motivation approaches in organisations fail. In fact, most of the motivation enhancement programmes in organisations brought more harm than good.

FLAW 1: HAVING NO MEASURABLE OBJECTIVES
There are leaders who are fond of telling their staff that they will be rewarded when they obtain the objectives of the organisation. However, there are many staff whose work does not have measurable objectives. Thus, staff playing the role of support (for example, finance and accounting) face the challenges of how their achievements are measured. It is difficult to motivate people when they do not know whether they are doing well or not.

Our recommendation. To ensure that the motivation of those support staff is sustained, each department leader should try to quantify those objectives in his department so that they can be measured. Benchmark against your competitor or your model organisation. This should then be made transparent and communicated to the affected parties.

FLAW 2: HAVING UNCLEAR PERFORMANCE MANAGEMENT SYSTEM
In our Employee Satisfaction Survey (ESS) conducted for more than 50 organisations, we found that one of the key determinants of employee motivation is the way people view how closely rewards are tied to their performance. The degree of staff motivation is directly proportional to the degree of control one feels one has on performance and reward.

Our recommendation. Having a clear performance management system requires three important components:
1) A clear definition of measurable objectives to ascertain performance levels.
2) A set of criteria for rewarding people in achieving those measurable results.
3) A consistent approach in implementing the system.

To motivate people, leaders must be transparent in their approach in communicating these areas.

FLAW 3: LEAVING OUT DISCIPLINE AS PART OF MOTIVATION
One great misjudgement regarding motivation is the lack of emphasis placed on discipline. Leaders in organisations generally are more comfortable looking at motivation in rewarding people rather than in reprimanding non-performers.

Our recommendation. In motivating people, there is a need to balance reward with penalty action. Humans are motivated by two powerful forces: striving towards pleasure and avoiding pain. Reward reinforces the drive for pleasure while penalty and discipline reinforces the drive for avoiding pain. Often by taking stern action against one or two persons such as firing chronic non performers, it sends a very powerful message out there in the organisation.

FLAW 4: UNFAIR LEADERSHIP PRACTICES
Favouritism is one of the unfair leadership practices and is the surest way to demoralise the staff and lower productivity. Other unfair leadership practices include revengeful actions, bullying others, being rude to others, being deceptive and not being honest and straightforward.

Our recommendation. Implement a policy of transparency in the organisation. Have every department head or unit head spell out their key performance indicators (KPIs) for the department as well as the KPIs for individuals. Get each department head to define the rules of the performance game early and communicate clearly on how individuals' performances are to be assessed. Communicate the criteria for promotion, merit award or any other awards early to prevent misunderstanding later.

FLAW 5: TREATING MOTIVATION AS A ONE-OFF PROJECT
We need to constantly motivate people as to prevent their motivation level from subsiding. Leaders who go on a big bang approach to motivate people and do nothing thereafter will soon find their staff back to their original low motivation level.

Our recommendation. Motivation should be an ongoing process. Various types of motivation efforts are required at different times. At times when staff face great constraint deadline, the support provided in terms of resources and creative solutions may help to motivate a team.

FLAW 6: NOT ADDRESSING THE ROOT CAUSES OF MORALE PROBLEM
Too often leaders diagnose the reasons for poor work performance (such as frequent errors or mistakes, missed deadlines, sloppy work and not doing the work at all) wrongly and come up with the ineffective solutions to address them.

There are four common reasons why people perform poorly.
1) They do not know what they are supposed to do.
2) They do not know how to do it.
3) They do not know why they should be doing the tasks they are asked to do.
4) There are barriers beyond their control.

Our recommendation. It is important to understand the actual reason for non-performance or poor performance. If staff do not perform because they do not know what they are supposed to do, communicate clearly to them on the specifics that they should be doing. If they do not know how to do, show them or train them. If they do not know why they should be doing something, convince them of the rationale and motivate them by explaining the benefits they can expect from undertaking the work on hand. If they do not perform because of barriers beyond their control, look into the type of support one can provide to assist them to overcome these challenges.

-End-

Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround

This is one of my recommended MUST-READ book written by Louis V. Gerstner, Jr., the CEO who famously transformed IBM from near collapse in the early 1990s to one of the most admired company now. Louis Gerstner has written the book in such a straightforward manner and he made his points clear through his actual experiences in IBM. I recommend reading this book as Louis Gerstner's insights and experiences are based on actual events and not written by academics or interpreted by observers. This way, we can understand the rationale behind the decisions taken by the same person who made it and not interpreted by another person who may completely miss the point. In addition, decisions made in the real world are often different from the scenarios imagined by academics. In real world, decisions need to be made with limited information and also within a short time. I am also fascinated by the way he managed to turnaround the elephant that is IBM especially with its entrenched culture, diverse backgrounds, etc. It is certainly no small feat to be able to do so and if IBM can be transformed, any company can definitely be re-aligned towards sustainable growth and profitability. This proves that anything is possible with the right mindset and focused direction in life.

The following are excerpts from the book which I often re-read and have found it extremely useful in real-life management:

1) .........importance of cash in corporate performance - "free cash flow" as the single most important measure of corporate soundness and performance.

2) The importance of managers being aligned with shareholders - not through risk-free instruments like stock options, but through the process of putting their own money on the line through direct ownership of the company - became a critical part of the management philosophy I brought to IBM. (This statement appears prophetic now especially after the 2007/2008 financial crisis where investment bankers who are happy to gamble for short-term gain is one of the main reasons behind the speculative frenzy leading to the crisis. In the aftermath, it is recommended that the compensation structure should be devised in such a way that rewards should be based on long-term performance rather than spectacular short-term gain followed by a more spectacular bust).

3) ...........relentless publicity seeking generates a lot of coverage, and may even help the company in the short run, in the long run it damages corporate reputation and customer trust.

4) ..........eliminate bureaucracy fast. (Some organisations may not realise it but generally, as an organisation grows, it will becomes more bureaucratic simply because people usually has more confidence in arriving at a decision if it goes through more processes - a dangerous trap. For organisations, I believe in Muhammad Ali's "float like a butterfly, sting like a bee". An organisation should be nimble and not weighed down by bureaucracy and able to make critical decisions fast. Not easy to achieve but we should always strive to cut down bureaucracy and not increase it as our basic management principle).

5) Louis Gerstner's management philosophy and practice:

a) I manage by principle, not procedure.
b) The marketplace dictates everything we should do.
c) I'm a big believer in quality, strong competitive strategies and plans, teamwork, payoff for performance, and ethical responsibility.
d) I look for people who work to solve problems and help colleagues. I sack politicians.
e) I am heavily involved in strategy; the rest is yours to implement. Just keep me informed in an informal way. Don't hide bad information - I hate surprises. Don't try to blow things by me. Solve problems laterally; don't keep bringing them up the line.
f) Move fast. If we make mistakes, let them be because we are too fast rather than too slow.
g) Hierarchy means very little to me. Let's put together in meetings the people who can help solve a problem, regardless of position. Reduce committees and meetings to a minimum. No committee decision making. Let's have lots of candid, straightforward communications.
h) I don't completely understand the technology. I'll need to learn it, but don't expect me to master it. The unit leaders must be the translators into business terms for me.

6) Publicly crucify shortsighted proposals, turf battles, and backstabbing. This may seem obvious, but these are an art form in IBM.

7) Expect everything you say and do to be analysed and interpreted inside and outside the company.

8) Find a private cadre of advisors who have no axes to grind.

9) I've had a lot of experience turning around troubled companies, and one of the first things I learned was that whatever hard or painful things you have to do, do them quickly and make sure everyone knows what you are doing and why.

10) Fixing IBM was all about execution.

11) Qualities which Louis Gerstner look for in his management team - clarity of their thinking and whether they had the courage of their convictions or were weathervanes ready to shift direction if I scowled or raised an eyebrow.

12) The sine qua non of any successful corporate transformation is public acknowledgement of the existence of a crisis.

13) A successful company must have a customer/marketplace orientation and a strong marketing organization.

14) .........while you can force anything down the throat of an organization, if people don't buy the logic, the change won't stick.

15) I knew that at the time it was important to reduce our overall number of employees, but in a crisis it was even more important to retain our most promising people.

16) ..........fewer paternal benefits, but a far larger opportunity for everyone to participate in the rewards of our success through variable pay programs, stock-purchase and -option plans, and performance-based salary increases.

17) ..........over time the information technology industry would be services-led, not technolgy-led. (In my opinion, this is equally applicable in the field of professional consulting from accountacy, medicine to engineering)

18) ..........services businesses are much more difficult to manage.

19) Consumer product - marketing and merchandising mattered.

20) I came to see, in my time at IBM, that culture isn't just one aspect of the game - it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial management - any management system, in fact - can set you on the right path and can carry you for a while. But no enterprise - whether in business, government, education, health care, or any area of human endeavour - will succeed over the long haul if those elements aren't part of its DNA.

21) What you can do is create the conditions for transformation. You can provide incentives. You can define the marketplace realities and goals. But then you have to trust. In fact, in the end, management doesn't change culture. Management invites the workforce itself to change the culture.

22) I wanted people to focus on customers and the marketplace, not on internal status. (A fine art. I believe a little bit of internal status would motivate employees to add further value to the company if a proper merit system is in place. It is like rewarding a soldier for his valiant effort. The reward would mean less if nobody knows about it. I am guessing that what Louis Gerstner has in mind is not abolishing titles but to appreciate input from everyone irrespective of titles when it comes to solving problems).

23) ...........use of plain language that one's customers easily understand.

24) My kind of executives dig into the details, work the problems day to day, and lead by example, not title.

25) .........insisted there would be few rules, codes, or books of procedures.

26) .........all high-performance companies are led and managed by principles, not by process.

27) Success in a company comes foremost from success with the customer, nothing else.

28) Not that planning and analysis are wrong - just not at the expense of getting the job done now.

29) People don't do what you expect but what you inspect.

30) Successful people would commit to getting things done - fast and effectively.

31) The work-a-day world of business isn't about fads or miracles. There are fundamentals that characterize successful enterprises and successful executives.

a) They are focused.
b) They are superb at execution.
c) They abound with personal leadership.

32) History shows that truly great and successful companies go through constant and sometimes difficult self-renewal of the base business. They don't jump into new pools where they have no sense of the depth or temperature of the water.

33) ........how difficult it is to get large organizations to give meaningful resources and attention to matters that offer little or no benefit to quarterly results, but which are critical to long-term success.

34) Execution is really the critical part of a successful strategy.

35) No credit can be given for predicting rain - only for building arks.

36) I believe effective execution is built on three attributes of an institution: world-class processes, strategic clarity, and a high-performance culture.

37) The best leaders create high-performance cultures.

38) Leaders who don't demand uniform and fair adherence to good principles and policies lose their effectiveness.

39) Most industries follow the law of diminishing returns - i.e., after a certain point it costs more to increase your market share against entrenched competitors than you get in return.

40) Closing down the investment bankers is a nonstarter. (Louis Gerstner's recommendations on fixing the financial system which has seen some spectacular crashes)

41) Owners who are close to the managers, owners who cannot sell their stock on a whim, owners who must see a company through a complete investment cycle - they are the most powerful force for ensuring effective corporate leadership.

42) Chasing revenue at the expense of real earnings is one of the most telling signs of a weak management team.

43) If I were the head of research at a securities firm, I would urge my analysts to focus on the following five points in determining shareholder value:

a) Is the company a major force in a growing market or market segments? (Remember Warren Buffet's wonderful observation: "When a manager with a great reputation meets a company with a bad reputation, it is the company whose reputation stays intact.")
b) Is the company holding or increasing its share in those segments, and is that share gain the result of sustainable advantages (cost, technology, quality)?
c) Is the increased share resulting in growing cash flow - cash flow after all expenses, not the notorious EBITDA (earnings before interest, taxes, depreciation and amortization),  and not pro forma nonsense?
d) Is the company using that cash flow in a wise manner?
- avoiding macho or bleary-eyed acquisitions
- reinvesting in research and development, marketing, and other critical areas in the company.
e) Does the management team walk the talk of aligning with the shareholders? Do executives own significant amounts of stock (as opposed to just holding options)? Do they return cash to their shareholders in the form of dividends or share repurchases?

44) The future of IBM is in its human resources - our performers - and not in appearances and titles.

45) Committees can become dangerous organisms. They should never be used as decision-making bodies. Their main purpose is communication - up, down, and across. They should meet infrequently with focused agendas, and they should be disbanded regularly to protect against the view that committees play important roles in successful institutions. They do not. Personal leadership and task-specific teamwork drive our success.

46) We needed to focus on critical things, but we also needed to celebrate victories and heroes.

In summary, a must-read book! The philosophies which guide Louis Gerstner in his successful turnaround of IBM is equally applicable in any organisations around the world. As Louis Gerstner puts it, it is the principles which mattered and not processes. Happy inspiring people around you.