The basis for the above title is on observations I have made where the Line managers have had marathon meetings with their team talking about targets, focus etc etc for hours together. This got me thinking as to the effectiveness of such an exercise and the possible reasons in the mind of the Manager. These meetings are normally characterized by one speaker (the manager) and several listeners (the team) where the same points are spoken in several ways. The listener’s involvement is in normally replying to questions posed by the speaker. The listeners have confided to me about the sheer waste of time and their frustrations with this GYAAN. The manager normally talks on responsibilities of the team, their failings, their commitments on targets (in large part forced commitment) , their improvements, suggestions etc where the frustrations of the manager are voiced out but rarely of the team. There is an implicit pressure for the team to conform to set standards of performance and behaviour
As the title suggest, I am going to attempt in offering a couple of hypothesis by delving into the mind of these managers and also state why these exercises are normally counterproductive to the team. The need to speak endlessly would vary from manager to manager and the hypothesis would cover these broad aspects.
Hypothesis 1 – This Line manager is riddled with anxieties as to how or from where the targets are going to be met. Also there is an implicit pressure on him that the team should be under his control. His anxieties on targets and his fear of loosing control ignite him into action. Since what productive action is not clear to him, the action he normally chooses is in the form of speech where by talking and pressurizing his team, he is in some way able to mitigate his anxieties. The task orientation of the meeting is replaced by mitigation of Managers anxieties.
Hypothesis 2- This line manager is narcissist and enjoys the power that comes along with the authority. Every time he speaks to his team, he gets a high experiencing the power of control as well as the ability to moderate other voices. His endless gyan is got nothing to do with the team but everything to do with himself.
For the moment I can think of these two hypotheses to explain my title based on my observations. Hopefully in future I might be able to unearth more the reasons if they exist.
For the second part as I stated earlier, In most cases during such meetings, the team normally shuts off mentally. The reason being that in all non-participative listening unless the listener is really interested in the topic at hand, he would not be able to concentrate on the talk. Lack of participation is also indicative of lack of concrete agreements, hence all talk is empty. Also if the tone is of admonition, the defenses of an individual rise leading to hardly any scope for change et al.
To end this blog, I would just like to state crudely what Humberto maturana (an expert on cognition) stated - You can only make people see your point of view by emotionally seducing them with you argument and not by appealing to objective rationality.
Saturday, April 18, 2009
Friday, March 20, 2009
Mangerial Roles –An example
In continuation with my previous blog, I had discussed the role of Managerial task. I want to take it further by clarifying it with an example from my settings.
Well apart from leadership and drive, there are 3 more areas mentioned by S. Beer – Policy making, decision making and control.
Applying this in the context of lending business, I will take one examples from each of the parameters and explain its requirements. This will be applicable to the business head for the lending business channel.
1) POLICY Making – In a lending business, the business head is part of the risk Policy. Ensuring that the risk policy is not that stringent that it stifles all new business yet is not so liberal that it will lead to higher NPAs and thus affect P&L. The foresight and judgment in this area is critical in impacting bottom-line.
2) Decision Making - Every action in the present is impacting the future directions. Taking decision on what structure will yield the maximum results is a key skill. For e.g. Have I integrated the voice of the market, products, employees, Top management etc in getting the structure in place. Is the DSA model more appropriate for our type of product or would a direct sales team yield better results is one critical area of decision making.
3) Control – Sensing the data from the ambient sounds is an important skill. Within the current environment is my product suited to match the needs of client factoring the competitors? Is the interest rate in line with the market and hence has to be factored in being aligned with the market.
There are several such examples that a Manager has to take in his daily operations and this intellectual capacity and judgment is having a critical role in making the business a success or otherwise. Leadership and drive will only help in keeping the wheels on track but cannot make the vehicle run as per the desire.
Well apart from leadership and drive, there are 3 more areas mentioned by S. Beer – Policy making, decision making and control.
Applying this in the context of lending business, I will take one examples from each of the parameters and explain its requirements. This will be applicable to the business head for the lending business channel.
1) POLICY Making – In a lending business, the business head is part of the risk Policy. Ensuring that the risk policy is not that stringent that it stifles all new business yet is not so liberal that it will lead to higher NPAs and thus affect P&L. The foresight and judgment in this area is critical in impacting bottom-line.
2) Decision Making - Every action in the present is impacting the future directions. Taking decision on what structure will yield the maximum results is a key skill. For e.g. Have I integrated the voice of the market, products, employees, Top management etc in getting the structure in place. Is the DSA model more appropriate for our type of product or would a direct sales team yield better results is one critical area of decision making.
3) Control – Sensing the data from the ambient sounds is an important skill. Within the current environment is my product suited to match the needs of client factoring the competitors? Is the interest rate in line with the market and hence has to be factored in being aligned with the market.
There are several such examples that a Manager has to take in his daily operations and this intellectual capacity and judgment is having a critical role in making the business a success or otherwise. Leadership and drive will only help in keeping the wheels on track but cannot make the vehicle run as per the desire.
Saturday, January 3, 2009
SALARY AND SCALABILITY
There is always a talk in financial services that every one has to justify his or her salary, more so at the frontline sales (being easier to track). But how do people at higher levels look at justifying their salaries or how they envision their critical roles within the firm.
Surely taking the business from ‘X’ levels to ‘X+5’ levels would not justify. Taking from ‘X’ to ‘7X’ with the same resources would really test the Management skills. Now my observation for financial firms is that whenever they want to scale business, the pressure increases on middle Management who get into supervisory roles rather than managerial trying to extract the maximum mileage from sales personnel by heavy supervision and control This might make the team efficient to a degree but the model is still not scalable from the top Management perspective.
The next important question is what is a managerial role and are people in managerial positions especially Top management ( those getting really high salaries) thinking in those lines
Well again I wish to invoke the thought of Stafford beer who described the role of Management as mentioned below
Policy-making, decision-making, and control: These are the three functions of management that have intellectual content. A man may be very good at any two of them, and still make a hash of his job for want of capability with the third. And whatever can be said for the qualities of drive and leadership, which is a lot, these attributes cannot in the long run be expected to compensate for deficiencies in the three-pronged intellectual attack
Guess the above para is self explanatory. Please note that by control Beer means more in terms of feedback and action rather than supervision.
I seriously Hope that intellectual content is given its due importance in organisations over drive and leadership
(The role of middle management has not been sufficiently described my be in the above and would share my views on some another occasion.)
Surely taking the business from ‘X’ levels to ‘X+5’ levels would not justify. Taking from ‘X’ to ‘7X’ with the same resources would really test the Management skills. Now my observation for financial firms is that whenever they want to scale business, the pressure increases on middle Management who get into supervisory roles rather than managerial trying to extract the maximum mileage from sales personnel by heavy supervision and control This might make the team efficient to a degree but the model is still not scalable from the top Management perspective.
The next important question is what is a managerial role and are people in managerial positions especially Top management ( those getting really high salaries) thinking in those lines
Well again I wish to invoke the thought of Stafford beer who described the role of Management as mentioned below
Policy-making, decision-making, and control: These are the three functions of management that have intellectual content. A man may be very good at any two of them, and still make a hash of his job for want of capability with the third. And whatever can be said for the qualities of drive and leadership, which is a lot, these attributes cannot in the long run be expected to compensate for deficiencies in the three-pronged intellectual attack
Guess the above para is self explanatory. Please note that by control Beer means more in terms of feedback and action rather than supervision.
I seriously Hope that intellectual content is given its due importance in organisations over drive and leadership
(The role of middle management has not been sufficiently described my be in the above and would share my views on some another occasion.)
Tuesday, December 16, 2008
Experiencing the Experience
Q) What is the toughest task for a line Manager?
A) Line Managers mental model of experience faced by his sales personnel being a close approximate of the experience as actually felt by the sales person while going about the task of attaining goals.
For any line manager to intervene and suggest changes, be it at the individual or business level, he has to know the experience as faced by his team.
To clarify the above, let me explain with my area of operation.
I was managing a team in Mumbai for an online product, where the Mumbai market was divided in 4 zones. Each zone had a designated sales person handling a given set of relationships with our channel partners viz. Bank Branches Each sales person had roughly the same assigned relationships
It was observed that business in different regions varied widely. South Mumbai was at top and West mumbai ahead of andheri was last. There are a series of question that I went through
1) Do the varying figures be a reflection of Sales persons ability or the inherent nature of market, Hence South Mumbai being on top can or cannot be assigned to Sales person.
2) What is the potential of each relationship that the sales person is handling and should the targets be a reflection of this.
3) What are the right things that south Mumbai person is doing that has led to results.
4) How is individual personalities of sales personnel (including mine) enabling or affecting a “relationship based sales model”.
5) How is the existing business model an enabler or otherwise for sales numbers
I guess there are no easy answers to above question but only choice left for Line manager is to himself be a part of the action and develop appropriate models if he has to meaningfully intervene.
Guess the above para applies at all all levels in corporate hierarchy.
A) Line Managers mental model of experience faced by his sales personnel being a close approximate of the experience as actually felt by the sales person while going about the task of attaining goals.
For any line manager to intervene and suggest changes, be it at the individual or business level, he has to know the experience as faced by his team.
To clarify the above, let me explain with my area of operation.
I was managing a team in Mumbai for an online product, where the Mumbai market was divided in 4 zones. Each zone had a designated sales person handling a given set of relationships with our channel partners viz. Bank Branches Each sales person had roughly the same assigned relationships
It was observed that business in different regions varied widely. South Mumbai was at top and West mumbai ahead of andheri was last. There are a series of question that I went through
1) Do the varying figures be a reflection of Sales persons ability or the inherent nature of market, Hence South Mumbai being on top can or cannot be assigned to Sales person.
2) What is the potential of each relationship that the sales person is handling and should the targets be a reflection of this.
3) What are the right things that south Mumbai person is doing that has led to results.
4) How is individual personalities of sales personnel (including mine) enabling or affecting a “relationship based sales model”.
5) How is the existing business model an enabler or otherwise for sales numbers
I guess there are no easy answers to above question but only choice left for Line manager is to himself be a part of the action and develop appropriate models if he has to meaningfully intervene.
Guess the above para applies at all all levels in corporate hierarchy.
Monday, August 11, 2008
PUSH PRODUCTS VS PULL PRODUCTS
I have been wondering if a marketing firm could design a table for every product or services and classify it in two broad categories – Mainly a push based product or predominantly a pull based one and drill it to show the extent of pull or push in each category. .
The words “mainly” and “ predominantly” being prefixed because all Pull based products would have some element of push and vice versa. Say in FMCG branding is extremely important (pull based) but also a recommendation from grocery shop owner or salesman would add the push element.
What the marketing firm could do is to show the relative extent of PULL or PUSH based products in every category. Not denying that the relative extent of Pull or Push would vary from firm to firm based on various factors.
To take an example, say in Push Based product in financial category – Insurance would have the maximum push, followed by MF, then bonds, etc. As the list would move from left to right, the push element would decrease and pull element would increase. Similarly a pull based product for financial category would have say Home Loans, Vehicle loans, personal loans, gold etc indicating the degree of pull element required.
Alternatively a number line merging the two above categories could show the proportion of Pull and push for each product.
Well you must be wondering how this classification would help. It could help the marketing and sales team to tweak its approach based on these findings and incorporate elements that suit the needs of the category the product belongs to. No use expecting tangential shift in numbers from sales team if the product is inherently pull based, similarly no use spending vast sums on marketing if the product is Push based.
The words “mainly” and “ predominantly” being prefixed because all Pull based products would have some element of push and vice versa. Say in FMCG branding is extremely important (pull based) but also a recommendation from grocery shop owner or salesman would add the push element.
What the marketing firm could do is to show the relative extent of PULL or PUSH based products in every category. Not denying that the relative extent of Pull or Push would vary from firm to firm based on various factors.
To take an example, say in Push Based product in financial category – Insurance would have the maximum push, followed by MF, then bonds, etc. As the list would move from left to right, the push element would decrease and pull element would increase. Similarly a pull based product for financial category would have say Home Loans, Vehicle loans, personal loans, gold etc indicating the degree of pull element required.
Alternatively a number line merging the two above categories could show the proportion of Pull and push for each product.
Well you must be wondering how this classification would help. It could help the marketing and sales team to tweak its approach based on these findings and incorporate elements that suit the needs of the category the product belongs to. No use expecting tangential shift in numbers from sales team if the product is inherently pull based, similarly no use spending vast sums on marketing if the product is Push based.
Saturday, July 12, 2008
Performance Measurement: An Application
In this blog, I wish to apply the Performance Measurement I had discussed in previous blog using the aid of a case. I have applied it in my daily area of operations and found it beneficial in understanding performance
Background
A broking firm has a tie-up with two banks a public sector and private sector bank (let’s call them bank A and Bank B) for sales of their trading account. The banks Savings and demat account is linked with the trading account of the broking firm. This linked accounts enables the bank customers to do seamless share trading i.e. On Buying Shares the shares will come directly into their demat without the need for delivery instruction slip. On selling shares money will come directly into their savings account.
Business Models
In Bank A (public sector bank), the client can trade in two forms,
1) Online with usage of his net banking id and password to transfer funds
2) Offline by calling a dedicated Dealer for these bank clients. Here he need not use his net banking id and funds will be automatically debited (in case of share purchase) from his savings account. The dealer even does outbound calling
In Bank B (Private sector) the client can again trade in two forms
1) Online with usage of his net banking id and password to transfer funds
2) Offline by calling a toll free number, but using his net banking to transfer funds before he calls these numbers, without which he will not be able to place his trades. This is only an inbound calling number
In Bank A’s case, there is a possibility of trading without resorting to net banking or need for internet; Bank B clients have no choice of auto debits
Metrics
I am going to use only one metric here to propound on the application of Performance measurement standards.
Activity ratio is one way of evaluating steady revenues.
Activity ratio is defined as no: of customers traded in a month/total number of customers in the channel*100
Performance measurement(PM)
I am going to measure performance using terms used in the previous blog- actuality, capability and potentiality and apply the same framework to one task at hand(please refer to these terms explained in the previous blog)
Bank A- On an average, the Activity ratio hovers around 45%
Bank B -On an average, the Activity ratio hovers around 10%
My analysis for the difference in activity ratio amongst both bank is due to ease of transferring funds and a dedicated dealer for bank A accounting for these figures
Here the figures 10% and 45% stands for actuality
Applying the framework
I am going to use the PM framework on Bank B
My understanding is that capability for bank B is around 15% (based on activities that can be carried out without any disruption of other metrics)
Suppose the management decides that we need to increase the activity ratio. Then I believe the course of discussion would be as follows
Step 1- the productivity ratio should be increased
Productivity ratio (actuality/capability) for Bank B is 0.66
To increase the productivity ratio, a series of activities that can be carried out without hampering other function. These activities could be as follows
1) Telecalling exercise asking clients to trade, by the sales personnel without affecting his sales calls. Say around One hour a day.
2) Demos to inactive clients by sales personnel’s. (Again without dropping sales calls). Within the given constraints of personnel this cannot be a full time activity in the channel and has to be carried out alongside sales calls.
3) Engaging client by sending trade reports. This can be sent from time to time by sales force to keep the client interested
4) A one time activity involving customer care department to carry a telecalling activity finding out reasons for inactiveness and resolving technical issues etc if any. E.g. client must have lost his trading password, net banking not enabled for shopping mall transactions, not having net banking password etc.
.This would definitely increase the productivity ratio up a few points.
The second course of discussion would be what the extent of Latecy is and how it can be eliminated.
My assumption is that Potentiality would be around 55% active ratio( we already see it at 45% in Bank A) Hence to increase and measure performance of activity ratio without disruption on other metrics the management will have to change its model.
Latency (capability/potentiality) currently is around 0.27
Performance (latency*productivity) is around 0.1782
Now I propose the following steps that can be used to decrease latency
1) Bank B also having the option of trading without resorting to net banking. This can be done changing the product in such manner where customers can block fund instead of transferring fund using netbanking. This is already present in the market.
2) A dedicated dealer who not only can place trades on behalf of client but also block funds in his savings account as soon as a trade is placed.
3) Dealer involved in outbound calling and maintaining relationship
There will be an additional cost of dealer and product upgradation but the benefit will far outweigh the cost.
Conclusion
What I have just proposed is framework that helps in not only measuring performance but the direction one can take with these aids. Also the discussion on numbers is far more solid with these tools.
Definitely there are a lot more factors that can affect activity ratio such as market conditions, but the factors apply to everyone uniformly. Also in such a case, the potentiality itself will change without change in performance numbers. Hence absoluteness on measurement would not be valid.
Background
A broking firm has a tie-up with two banks a public sector and private sector bank (let’s call them bank A and Bank B) for sales of their trading account. The banks Savings and demat account is linked with the trading account of the broking firm. This linked accounts enables the bank customers to do seamless share trading i.e. On Buying Shares the shares will come directly into their demat without the need for delivery instruction slip. On selling shares money will come directly into their savings account.
Business Models
In Bank A (public sector bank), the client can trade in two forms,
1) Online with usage of his net banking id and password to transfer funds
2) Offline by calling a dedicated Dealer for these bank clients. Here he need not use his net banking id and funds will be automatically debited (in case of share purchase) from his savings account. The dealer even does outbound calling
In Bank B (Private sector) the client can again trade in two forms
1) Online with usage of his net banking id and password to transfer funds
2) Offline by calling a toll free number, but using his net banking to transfer funds before he calls these numbers, without which he will not be able to place his trades. This is only an inbound calling number
In Bank A’s case, there is a possibility of trading without resorting to net banking or need for internet; Bank B clients have no choice of auto debits
Metrics
I am going to use only one metric here to propound on the application of Performance measurement standards.
Activity ratio is one way of evaluating steady revenues.
Activity ratio is defined as no: of customers traded in a month/total number of customers in the channel*100
Performance measurement(PM)
I am going to measure performance using terms used in the previous blog- actuality, capability and potentiality and apply the same framework to one task at hand(please refer to these terms explained in the previous blog)
Bank A- On an average, the Activity ratio hovers around 45%
Bank B -On an average, the Activity ratio hovers around 10%
My analysis for the difference in activity ratio amongst both bank is due to ease of transferring funds and a dedicated dealer for bank A accounting for these figures
Here the figures 10% and 45% stands for actuality
Applying the framework
I am going to use the PM framework on Bank B
My understanding is that capability for bank B is around 15% (based on activities that can be carried out without any disruption of other metrics)
Suppose the management decides that we need to increase the activity ratio. Then I believe the course of discussion would be as follows
Step 1- the productivity ratio should be increased
Productivity ratio (actuality/capability) for Bank B is 0.66
To increase the productivity ratio, a series of activities that can be carried out without hampering other function. These activities could be as follows
1) Telecalling exercise asking clients to trade, by the sales personnel without affecting his sales calls. Say around One hour a day.
2) Demos to inactive clients by sales personnel’s. (Again without dropping sales calls). Within the given constraints of personnel this cannot be a full time activity in the channel and has to be carried out alongside sales calls.
3) Engaging client by sending trade reports. This can be sent from time to time by sales force to keep the client interested
4) A one time activity involving customer care department to carry a telecalling activity finding out reasons for inactiveness and resolving technical issues etc if any. E.g. client must have lost his trading password, net banking not enabled for shopping mall transactions, not having net banking password etc.
.This would definitely increase the productivity ratio up a few points.
The second course of discussion would be what the extent of Latecy is and how it can be eliminated.
My assumption is that Potentiality would be around 55% active ratio( we already see it at 45% in Bank A) Hence to increase and measure performance of activity ratio without disruption on other metrics the management will have to change its model.
Latency (capability/potentiality) currently is around 0.27
Performance (latency*productivity) is around 0.1782
Now I propose the following steps that can be used to decrease latency
1) Bank B also having the option of trading without resorting to net banking. This can be done changing the product in such manner where customers can block fund instead of transferring fund using netbanking. This is already present in the market.
2) A dedicated dealer who not only can place trades on behalf of client but also block funds in his savings account as soon as a trade is placed.
3) Dealer involved in outbound calling and maintaining relationship
There will be an additional cost of dealer and product upgradation but the benefit will far outweigh the cost.
Conclusion
What I have just proposed is framework that helps in not only measuring performance but the direction one can take with these aids. Also the discussion on numbers is far more solid with these tools.
Definitely there are a lot more factors that can affect activity ratio such as market conditions, but the factors apply to everyone uniformly. Also in such a case, the potentiality itself will change without change in performance numbers. Hence absoluteness on measurement would not be valid.
Monday, June 9, 2008
PERFORMANCE LED GROWTH VS PROFILE LED GROWTH
On an average, people with profiles on the revenue side of the organization have more importance within the system than others. Simple rule is the more revenue the department brings into the system, the more its relative importance.
But the next question comes to mind is whether Revenue contribution is equal to performance and should employees be evaluated or promoted based on their revenue contribution or Performance.
One cannot rule out the possibility that certain profiles have an inherent advantage in contributing growth as well as revenue to their organization, primarily due to external circumstances (industry growth, city, policy change etc) rather than the talent of those employees. So, if revenue led promotion is the norm which according to me is in most cases, than talent assessment itself is a myth.
Partly the reason for Revenue Led promotion is the norm is due to the extremely difficult nature of measuring performance. For e.g., unless the understanding and application of Statistical Variation (special and common causes) is not there, one cannot judge two salespersons in different markets/regions based on revenue contribution and pass a decision on their performance without factoring things such as client base, purchasing power of clients, etc. etc.
So is there a way out and more importantly what is Performance. I have come across the closest definition of performance proposed by the legendary cybernetician – Stafford Beer. The explanation in terms of ratios is as below
ACTUALITY/CAPABILITY = PRODUCTIVITY
CAPABILITY/POTENTIALITY = LATENCY
PRODUCTIVITY*LATENCY=PERFORMANCE
(Note: 1) Capability stands for given the constraints, what is the ability of the system?
2) Potentiality stands for, if certain processes/constraints are addressed, what would be the ability of the system? )
The closer the answer for performance is to 1 the more effective the individual, department is.
I admit the fact that determining the capability, potentiality is a itself a complicated task, but the above ratios gives us a framework to measure performance and have a fair evaluation for individual/departments.(as sated above, statistical variation can be good start for measuring sales performance across regions and determining capability)
Perhaps than talent assessment and Performance Measurement systems would lead to a fairer performance led growth.
But the next question comes to mind is whether Revenue contribution is equal to performance and should employees be evaluated or promoted based on their revenue contribution or Performance.
One cannot rule out the possibility that certain profiles have an inherent advantage in contributing growth as well as revenue to their organization, primarily due to external circumstances (industry growth, city, policy change etc) rather than the talent of those employees. So, if revenue led promotion is the norm which according to me is in most cases, than talent assessment itself is a myth.
Partly the reason for Revenue Led promotion is the norm is due to the extremely difficult nature of measuring performance. For e.g., unless the understanding and application of Statistical Variation (special and common causes) is not there, one cannot judge two salespersons in different markets/regions based on revenue contribution and pass a decision on their performance without factoring things such as client base, purchasing power of clients, etc. etc.
So is there a way out and more importantly what is Performance. I have come across the closest definition of performance proposed by the legendary cybernetician – Stafford Beer. The explanation in terms of ratios is as below
ACTUALITY/CAPABILITY = PRODUCTIVITY
CAPABILITY/POTENTIALITY = LATENCY
PRODUCTIVITY*LATENCY=PERFORMANCE
(Note: 1) Capability stands for given the constraints, what is the ability of the system?
2) Potentiality stands for, if certain processes/constraints are addressed, what would be the ability of the system? )
The closer the answer for performance is to 1 the more effective the individual, department is.
I admit the fact that determining the capability, potentiality is a itself a complicated task, but the above ratios gives us a framework to measure performance and have a fair evaluation for individual/departments.(as sated above, statistical variation can be good start for measuring sales performance across regions and determining capability)
Perhaps than talent assessment and Performance Measurement systems would lead to a fairer performance led growth.
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