THE MOST BEAUTIFUL FLOWER

The park bench was deserted as I sat down to read
Beneath the long, straggly branches of an old willow tree.
Disillusioned by life with good reason to frown,
For the world was intent on dragging me down.

And if that weren't enough to ruin my day,
A young boy out of breath approached me, all tired from play.
He stood right before me with his head tilted down
And said with great excitement, "Look what I found!"

In his hand was a flower, and what a pitiful sight,
With its petals all worn--not enough rain, or too little light.
Wanting him to take his dead flower and go off to play,
I faked a small smile and then shifted away.

But instead of retreating he sat next to my side
And placed the flower to his nose and declared with overacted surprise,"
It sure smells pretty and it's beautiful, too.
"That's why I picked it; here, it's for you."

The weed before me was dying or dead.
Not vibrant of colors, orange, yellow or red.
But I knew I must take it, or he might never leave.
So I reached for the flower, and replied, "Just what I need."

But instead of him placing the flower in my hand,
He held it midair without reason or plan.
It was then that I noticed for the very first time
That weed-toting boy could not see: he was blind.

I heard my voice quiver, tears shone like the sun
As I thanked him for picking the very best one.
"You're welcome," he smiled, and then ran off to play,
Unaware of the impact he'd had on my day.

I sat there and wondered how he managed to see
A self-pitying woman beneath an old willow tree.
How did he know of my self-indulged plight?
Perhaps from his heart, he'd been blessed with true sight.

Through the eyes of a blind child, at last I could see
The problem was not with the world; the problem was me.
And for all of those times I myself had been blind,
I vowed to see the beauty in life,
and appreciate everysecond that's mine.

Life Is Full of Many Simple TREASURES

As I walked along today
A penny caught my eye;
But really, there's nothing
That just one cent can buy...

It's just a piece of copper,
And I've never stopped before;
But somehow there was something
I couldn't just ignore...


This time I couldn't help it,
I just had to pick it up;
I truly could not begin believe
How it'd bring me such great luck!


Now for every tiny coin I find
I stop and say a prayer;
For I know that little blessings
Can be found anytime, anywhere.


I'm sharing this special poem with you,
For I hope you too shall see,
The simple treasures in everyday life -
Even those as common as that little, copper penny.

January 29, 2006

GONG XI FA CAI

G one is the past
O h look forward to the future
N ow
G o reach for the goal!

X cellence achieve
I n this Dog Year

F earless[ly] face
A

C an-Do
A ttitude
I nspire!

Sing to the tune "Gong Xi, Gong Xi Ni"

In the middle of every difficulty lies opportunity.

Albert Einstein

"We should seize every opportunity to give encouragement. It is oxygen to the soul." George M. Adams


A personal coach can provide encouragement PLUS:

F ocus
O rganization
C larity
U plift
S tructure

I nspiration
S upport

P erspective
A ccountability
C hallenge
E nergy
D etachment

R esources
E xperience
S kills
T ools

What is the business of business?

By building social issues into strategy, big companies can recast the debate about their role in society.

Ian Davis

2005 Number 3

The great, long-running debate about business's role in society is currently caught between two contrasting, and tired, ideological positions. On one side of the current debate are those who argue that, to borrow Milton Friedman's phrase, "the business of business is business." This belief, most established in Anglo-Saxon economies, implies that social issues are peripheral to the challenges of corporate management. The sole legitimate purpose of business is to create shareholder value. On the other side are the proponents of corporate social responsibility, a rapidly growing, rather fuzzy movement encompassing companies that claim that they already practice the principles of CSR and skeptical advocacy groups arguing that they must go further in mitigating their social impact. As other regions of the world—parts of continental Europe, for example—move toward the Anglo-Saxon shareholder value model, the debate between these points of view has increasingly taken on global significance.
Both perspectives obscure, in different ways, the significance of social issues to business success. They also unhelpfully caricature the contribution of business to social welfare. It is time for CEOs of big companies to recast this debate and recapture the intellectual and moral high ground from their critics.
Large companies must build social issues into strategy in a way that reflects their actual business importance. Such companies need to articulate their social contribution and to define their ultimate purpose in a way that is more subtle than "the business of business is business" and less defensive than most current CSR approaches. It can help to view the relationship between big business and society as an implicit social contract—Rousseau adapted to the corporate world, you might say. This contract has obligations, opportunities, and advantages for both sides.
To explain the basis for such an approach, it may help first to pinpoint the limitations of the two current ideological poles. Start with "the business of business is business." The issue here is not primarily legal: in many countries, such as Germany, companies have a legal obligation to stakeholders, and even in the United States the legal primacy of shareholders is open to very broad interpretation.
The problem with the "business of business is business" mind-set is rather that it can obscure two important realities. The first is that social issues are not so much tangential to the business of business as fundamental to it. From a defensive point of view, companies that ignore public sentiment make themselves vulnerable to attack. Social pressures can also serve as early indicators of factors essential to corporate profitability: for example, the regulations and public-policy environment in which companies must operate, the appetite of consumers for certain goods above others, and the motivation of employees—and their willingness to be hired in the first place.
Companies that treat social issues as either irritating distractions or simply unjustified vehicles for attacks on business are turning a blind eye to impending forces that have the potential to alter the strategic future in fundamental ways. Although the effects of social pressures on these forces may not be immediate, that is not a reason for companies to delay preparing for or tackling them. Even from a strict shareholder perspective, most stock market value—typically, more than 80 percent in US and Western European public markets—depends on expectations of corporate cash flows beyond the next three years.
Examples abound of the long-term business impact of social issues. That impact is growing fast. In the pharmaceutical sector, the past decade's storm of social pressures—stemming from issues such as public perceptions of excessive prices charged for HIV/AIDS drugs in developing countries—are now translating into a general (and sometimes seemingly indiscriminate) toughening of the regulatory environment. In the food and restaurant sector, meanwhile, the long-escalating debate about obesity is now resulting in calls for further controls on the marketing of unhealthy foods. In the case of big financial institutions, concerns about conflicts of interest and the mis-selling of products have recently led to changes in core business practices and industry structure. For some big retailers, public and planning resistance to new stores is constraining growth opportunities. And all this is to say nothing of the way social and political pressures have reshaped and redefined the tobacco and the oil and mining industries, among others, over the decades.
In all such cases, billions of dollars of shareholder value have been put at stake as a result of social issues that ultimately feed into the fundamental drivers of corporate performance. In many instances, a "business of business is business" outlook has blinded companies to outcomes, or to shifts in the implicit social contract, that often could have been anticipated.
Just as important, these outcomes have not just posed risks to companies but also generated value creation opportunities: in the case of the pharmaceutical sector, for example, the growing market for generic drugs; in the case of fast-food restaurants, providing healthier meals; and in the case of the energy industry, meeting fast-growing demand (as well as regulatory pressure) for cleaner fuels such as natural gas. Social pressures often indicate the existence of unmet social needs or consumer preferences. Businesses can gain advantage by spotting and supplying these before their competitors do.
Paradoxically, therefore, the language of shareholder value may in this respect hinder companies from maximizing their shareholder value. Practiced as an unthinking mantra, "the business of business is business" can lead managers to focus excessively on improving the short-term performance of their businesses, thus neglecting important longer-term opportunities and issues, including societal pressures, the trust of customers, and investments in innovation and other growth prospects.
The second point that the "business of business is business" outlook obscures for many companies—the need to address questions about their ethics and legitimacy—is related to the first. For reasons of integrity and enlightened self-interest, big companies need to tackle such issues, with both words and actions. It is neither sufficient nor wise to say that it is for governments to set laws and for companies simply to operate within them. Nor is it enough simply to point out that many criticisms of businesses are unmerited or that those throwing the mud ought also to examine their own practices and social responsibility. Irrespective of whether the criticisms are valid, their cumulative effect can shape the strategic context for companies. It is imperative that businesses seek to lead rather than merely react to these debates.
Moreover, in certain parts of the world—particularly some poor developing countries—the rule of law and basic public services are notable by their absence. This reality can render the "business of business is business" mind-set positively unhelpful as a guide for corporate action. If companies operating in such an environment focus too narrowly on ill-defined local legislation or shy away from broad debates about their alleged behavior, they are likely to face mounting criticism over their activities as well as a greater risk of becoming embroiled in local political tensions.
Is CSR the answer? If only it were. The point is not to criticize the many laudable CSR initiatives undertaken by individual companies or to dispute the obvious need for businesses (as for any other social entity) to act responsibly. It is rather to examine the broad prescriptions proposed by groups and activists involved with CSR. These prescriptions commonly include stakeholder dialogue, social and environmental reports, and corporate policies on ethical issues. This approach is too limited, too defensive, and too disconnected from corporate strategy.
The defensive posture of CSR springs from its origins. Its popularity as a set of corporate tactics was driven, in large part, by a series of anticorporate campaigns in the late 1990s. These campaigns were in turn given impetus by the antiglobalization protests mounted around the same time. Since then, companies have been drawn to CSR by nice-sounding if vague notions such as the "triple bottom line": the idea that companies can simultaneously serve social and environmental goals as well as earn profits. Companies have seen CSR as a way to avoid nongovernmental-organization (NGO) and reputational flak and to mitigate the rougher edges and consequences of capitalism.
Developing countries must rethink how to attract and regulate investment. See "The truth about foreign direct investment in emerging markets."
This defensiveness starts the argument on the wrong foot—certainly as far as business leaders should be concerned. Big business provides huge and critical contributions to modern society. These are insufficiently articulated, acknowledged, or understood. Among them are productivity gains, innovation and research, employment, large-scale investments, human-capital development, and organization. All of them are, and will be, essential for future national and global economic welfare. Big business also supplies investment vehicles that are likely to be central to the provision of pensions in the aging countries of the Organisation for Economic Co-operation and Development (OECD). In developing countries, meanwhile, the entry of multinational companies through foreign direct investment has often contributed critical capital, technology, skills, and other poverty-reducing economic spillovers. It is no coincidence that developing countries place such emphasis on attracting big business and the investment it can bring to their economies.
CSR is limited as an agenda for corporate action because it fails to capture the potential importance of social issues for corporate strategy. Admittedly, companies undertaking a stakeholder dialogue with NGOs will be more aware, in advance, of potential issues. But tracking NGO opinion is only part of the process of understanding the range of social pressures that can ultimately affect core business drivers such as regulations and consumption patterns.
An obvious next step for companies, having understood the possible evolution of these broad social pressures, is to map long-term options and responses. This process clearly needs to be rooted in the development of strategy. Yet typical CSR initiatives—a new ethical policy here, for example, or a glossy sustainability report there—are often tangential to it. It is perfectly possible for a company to follow many prescriptions of CSR and still be caught short by seismic shifts in the socially driven business environment. One of the compounding problems is the fact that many companies have chosen to root their CSR functions too narrowly, within their public- or corporate-affairs departments. Although such departments play an important tactical role, they are often geared toward rebutting criticism and tend to operate at a distance from strategic decision making within the company.
A contract has two sides, and business must acknowledge that in return for the ability to function, it is subject to rules and constraints
In the limitations of both CSR and of the "business of business is business" thinking lie the outlines of a new approach—as relevant for Chinese, German, and Indian companies as for US and British ones. Three main strands stand out. The first is a helpfully simple prescription: businesses should introduce explicit processes to make sure that social issues and emerging social forces are discussed at the highest levels as part of overall strategic planning. This point means that executives must educate and engage their boards of directors. It also means that they need to develop broad metrics or summaries that usefully describe the relevant issues, in much the same way that most companies analyze customer trends today. The risk that stakeholders—including governments, consumer groups, lawyers, and the media—will mobilize around particular issues can be roughly estimated by studying the known agendas and interests of these parties. For example, the likelihood that the obesity debate would rebound on food companies was partly predictable from the growing expenditures of governments on obesity-related health problems, the inevitable media focus on the issue, plus the interest of some lawyers in finding fresh corporate targets for litigation. By the time businesses seriously engaged with the question, they were in a defensive posture, merely struggling to catch up with the public debate. In the future, companies will need to be much better at understanding and anticipating such issues.
Both the second and third strands of the new approach reflect the idea that there is an implicit contract between big business and society or indeed between whole economic sectors and society—the contract that is the subject of this article. Detractors have often successfully portrayed the contract as a one-way bargain that benefits business at society's expense. The reality is much more complex. The activities undertaken by business have clearly brought social benefits as well as costs. Similarly, however, there are two sides to a contract, and business must acknowledge that in return for the ability to function, it is subject to rules and constraints. At times, the contract can come under obvious strain. The recent backlash against big business in the United States can be seen as society seeking to shift the terms of the contract as a result of popular perceptions that business has abused its power. Similarly, in Germany at present, business is struggling to defend itself against charges that its contract with society is fundamentally unbalanced.
The second strand requires companies not just to understand their individual contracts but also to manage those contracts actively. To do so, companies can choose from a range of potential tactics, such as more transparent reporting, shifts in R&D or asset reorganization to capture expected future opportunities or to shed perceived liabilities, changes in approaches to regulation, and, at an industry level, the development and deployment of voluntary standards of behavior.
Some companies and sectors are already experimenting with such approaches. Nonetheless, there is scope for much more activity, provided it is aligned with corporate strategic goals. Reshaping conduct on an industry-wide and increasingly global basis may be particularly important, given that the perceived misdeeds of one company can rebound on its sector as a whole.
An important point to remember is that companies, depending on their circumstances, will have quite different tactical responses, so off-the-shelf or simply nice-sounding solutions may not always be appropriate. Transparency offers a good example. It is easy, but wrong, to say that there can never be enough of it. What might be good for a pharmaceutical company trying to restore the consumers' trust could be damaging for a hedge fund manager. A voluntary code of practice for a retailer naturally would be very different from that of a copper-mining company.
This observation leads me to the third strand of the new approach for business leaders: they need to shape the debate on social issues much more consciously by establishing ever higher (but appropriate) standards of integrity and transparency within their own companies and by becoming much more actively involved in external debates (such as those in the media) on issues that shape the social context of business.
A starting point may be for CEOs to articulate publicly the purpose of business in terms less dry than shareholder value, although that should continue to be seen as the critical measure of business success. However, it may be more accurate, more motivating—and indeed more beneficial to shareholder value over the long term—to describe the ultimate purpose of business as the efficient provision of goods and services that society wants.
This is a hugely valuable, even noble, purpose. It is the basis of the contract between business and society and the basis of most people's real interactions with business. CEOs could point out that profits are not an end in themselves but a signal from society that a company is succeeding in its mission of providing something people want—and doing so in a way that uses resources efficiently relative to other possible uses. From this perspective, the creation of shareholder value or profits is the measure, and the reward, of success in delivering to society the goods and services we desire, which is the more fundamental business objective. The measures and rewards reflect the predominant values of the relevant society.
CEOs could point out that profits are not an end in themselves but a signal from society that a company is providing things people want
By moving away from a rigid focus on the term shareholder value, big business can also make clear to broad audiences that it understands the trade-offs inherent in its social contract. The debate between business and society is essentially one about how to manage (and reach agreement on) those trade-offs. What might this point mean specifically? There is no shortage of big social issues today that directly affect many big businesses and require new debate. These issues include ensuring that aid organizations and trade regimes successfully promote the development of Africa and other poor regions, whose economic liftoff would present a major potential boon to global markets as well as to international security; promoting a more sophisticated and sensitive approach, by both companies and governments, to balancing the societal risks and rewards from new technologies; spearheading dialogue on the health care and pension challenges in many developed countries; and supporting efforts to resolve regional conflicts.
Obviously, the relevant issue must be matched to the specific business. Some companies and business organizations have taken strong public stances on these and similar issues. But in general, high-level, concerted corporate activism is more notable by its absence. Business leaders shouldn't fear taking a more forward role advocating the idea of a contract between business and society. Public receptiveness to active business leadership on issues such as these may be a lot greater than some might be inclined to think. Despite the poor image and bad press of big business in recent times, polls suggest that people retain a belief in its ability to provide a positive contribution to society.
More than two centuries ago, Rousseau's social contract helped to seed the idea among political leaders that they must serve the public good, lest their own legitimacy be threatened. The CEOs of today's big corporations should take the opportunity to restate and reinforce their own social contracts in order to help secure, for the long term, the invested billions of their shareholders.
About the Authors
Ian Davis is the worldwide managing director of McKinsey & Company. This article was originally published as "The biggest contract" in the May 26, 2005, issue of the Economist.

Copyright © The Economist Newspaper Limited, London, 2005. All rights reserved. Reprinted by permission.

http://mckinseyquarterly.com/article_abstract.aspx?ar=1638&L2=21&L3=37

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Quote of the Day

In essence, if we want to direct our lives, we must take control of our consistent actions. It's not what we do once in a while that shapes our lives, but what we do consistently.

Anthony Robbins

How a CEO Manages Astonishing Growth
By Scott Thurm From The Wall Street Journal Online

When John Chambers was named chief executive of Cisco Systems Inc. in January 1995, the computer-networking equipment maker had 3,000 employees and sales of approximately $2 billion a year. Today, Cisco is a telecommunications behemoth, with 30,000 employees and annual revenues nearing $20 billion. Cisco has grown into the third most-valuable company in the world, at one point reaching a market capitalization of $541 billion.

As it diversifies into fiber-optic communications gear and other new fields, Cisco continues to grow at an astonishing rate, exceeding 50% a year. It adds 1,000 employees a month and devours, on average, a high-tech start-up every two weeks.

In recent weeks, amid concerns about its lofty valuation and investors' retreat from tech stocks, Cisco's high-flying stock price has lost some of its altitude, declining by more than one-fourth since late March and erasing more than $100 billion in market capitalization. Although the share price remains more than double the level of a year ago and roughly on pace with the company's 10-year trajectory, the recent decline raises questions about Cisco's ability to keep its employees and potential acquisition targets happy.

How do you run a company growing that fast, with a stock that volatile? In recent interviews, the 50-year-old Mr. Chambers offered some tips.

WSJ: How has the recent decline in Cisco's stock affected your ability to recruit employees and complete acquisitions?

Chambers: The market's ups and downs in large don't affect our decision-making here at Cisco. . . . We've always made decisions based on what we think is best for our employees and shareholders and the company in the long run and not on the short-run gyrations in the stock market.
We've been very open with employees in particular that we want them to view the opportunity for the long run. That's why we extended [the vesting period of our] options from four years to five years and why we pass out options ever year. It's why we wouldn't reprice options.
While it may sound callous, it's easier for us to operate in a tough market than it is in an up market. [Our stock doesn't fluctuate as much as others.] So companies that weren't interested in being acquired as recently as a month ago are now interested in being acquired. . . . The last couple of months [the gyrating market] hasn't had any impact other than making it easier to acquire. It's the same thing with employees. There are a lot of employees at start-ups who have seen their net worth erode very quickly or their options under water, so it makes it easier for us to recruit them.

WSJ: At a time when Microsoft is on the verge of being broken up, how has Cisco avoided antitrust scrutiny?

Chambers: I'd be shocked and extremely disappointed if this were to be an issue for Cisco. . . . [We operate on] open standards and [there is a] lack of barriers of entry into the marketplace. . . . Four hundred to 500 start-ups have entered the market against us in last 18 months. Then there's our position in the market. For data, voice and video combined, we have less than a 10% market share. There is only going to be one network in the future [combining these elements], and we still have a relatively small piece.
I learned the hard way at IBM and Wang [Laboratories] that competition is good for you. Competition is what forces you to move faster. . . You don't view competitors as the bad guy. They are actually the good guys in terms of what they are doing to customer life that forces us to act quicker. We will have more market share three to five years from now because we have good competitors.
We have a culture that accepts competition in a very positive way, that doesn't try to stifle or kill competition. [My rule is], you never do something to someone else that you would have a problem with if they did to you.

WSJ: How do you manage differently today than when you took over?

Chambers: Part of the answer may surprise you. A lot of the basics haven't changed. The approach that we started in '93 was one of segmenting the market, being No. 1 and No. 2 in each segment and each product area. . . . , and [devising] our strategy to make that happen. . . . [We were] very much focused on how we used systems to gain competitive advantage and allow the scaling of the company to cookie-cut ideas. . . .We're now to the point where we actually can scale pretty rapidly. . . . It might surprise you, but there isn't a lot of difference . . . if you manage -- let me use the term `lead' as opposed to `manage' -- if you lead that way, whether you're 2,000 people, 20,000 or 100,000 people.

WSJ: How do you "cookie-cut" ideas?

Chambers: We don't do something that, if it works well, we wouldn't replicate. So we try to set it up in a way that, if it's really successful, it's replicable across the whole company. Without that attention to discipline, you can't scale with the speed that is needed. . . .

WSJ: Are there things a CEO can't do in a company this large?

Chambers: My goal hasn't changed in terms of having responsibility for setting the strategy at Cisco . . . that's one of the top three things I do. The second thing that I do is recruit and develop and retain the leadership team that is going to be able to implement that strategy.
The third thing that I do is really focus on what culture we want here at Cisco. . . . And it hasn't changed. The leader must walk his or her talk. So if you say customer success is most important, I still listen to every critical account in the world every night. Now, we have a process that works like clockwork behind that, but it's one of the areas I haven't changed.

WSJ: How does it work?

Chambers: When a network is unstable, that's a critical A. When a network has the potential of becoming unstable and we've got to watch it, that's a B. So I get a report on all critical A accounts in the world. Now the fact that we focus on it so heavily helps us to resolve it quicker but also helps us to prevent it. So I get a report each evening on anywhere from zero to 15 [accounts]. If there are only a few, then probably we haven't made enough new boxes out there. If it begins to get up to double digits, then we've got a customer-satisfaction issue coming our way. . . .
Then we pay every manager on customer satisfaction. It's amazing how that works. Once you say it's going to be part of their compensation, people say, `This must really be important,' and secondly, `John's going to ask me about it all the time.' And for either reason, they respond very well.
In our most recent survey, [customer-satisfaction scores] went up tremendously around the world. [There is a] one-to-one correlation between customer satisfaction and future revenues and profits.
The problem is that it lags 12 to 24 months, which is why most American companies don't pay as much attention to it as I believe that they should. Case in point: When I saw Dell's customer satisfaction go up dramatically . . . I knew that they would be a good stock five years ago.

WSJ: You mentioned recruiting top talent. What do you look for in your managers?

Chambers: People talk about vision or instinct. . . . Your ability to lead is based upon your life's experience. Part of it is education. Part of that is the values you grew up with. . . . The largest part is the experience you've had in multiple stages of leadership over your career. . . .
I believe you've got to articulate to your team what you expect of them and what you're going to hold them accountable for.

So at the heart of that is getting the results. . . .

The [second] key element of a leader is how good is your team. If you ask, "What's going to get the result?" it actually is the quality of the team that is the key determining factor -- the ability to attract, retain and develop, and you've got to develop at the speed that we're growing.
The mathematics of this are interesting. If you grow at 50% per [year] for 18 months . . . it requires you to double your leadership team every 18 months, just mathematically to stay where you were before.

The third element is trust and integrity. . . .

The fourth element is industry knowledge. . . .

The fifth element is teamwork, and I'm a nut on teamwork. . . .

The sixth element is communication skills . . . and this is becoming more and more a requirement, particularly for leadership higher in the organization. . . . It isn't [just] one-on-one communications any more; it's how do you get your message across? My average presentation today, probably half of them are in front of 500 people or more. . . . And a large part of communication skills, which people forget, is [listening]. . . . Your ability to listen as the company gets bigger also becomes more of a challenge, because you can't walk around and touch like you used to. You've got to learn how to do that in groups. . . .

[The seventh is] customer focus. . . . You've got to say, Does each one of our leaders, regardless of what function they're in, really think `Customer First'? It's amazing when you go to other companies and you sit in on their meetings, how sometimes the word "customer" never comes up. It's actually scary. . . .

[Eighth is] balancing planning and reacting. . . . We are probably world-class at reacting, and when you're really good at the diving catches, if you're not careful, you can dive and catch too often. . . . The next element is people skills. . . . And then finally, can you drive Cisco's culture?
WSJ: With 30,000 employees, how do you stay in touch with the front lines?

Chambers: Well, probably if you add time together with the customers and with our own employees, that's probably 70% of my time. And sometimes they overlap. When you call on your customers, you're often with your local team. . . . I rank [each VP and senior VP] each quarter, top to bottom, about how many [customer] visits did they participate in and what their evaluation [was] from the customers.

WSJ: Do you still meet with groups of front-line employees every month?

Chambers: The birthday breakfasts are probably the most valuable sessions I do with employees. Once a month, anybody who has a birthday in that month can come and quiz [me] for about an hour and a half, and anything is fair game. We deliberately asked directors and VPs not to participate so that people who I don't get a chance normally to listen to can participate. And every single time I learn two or three things that either I need to do differently, or things that I thought were working one way weren't.
But again, it's building the culture. You want to lead by example. If you do that as a CEO, that will filter down through the leadership style of your team, where they'll do meetings with their employees and listen to their team.

WSJ: How do you keep track of Cisco's diverse products and customers?

Chambers: This is where the Web-based architecture is so key, because I can see an automatic roll-up [summary] of customer satisfaction very quickly any time I want. I can see an automatic roll-up of every order around the world and explode that down, not just by key geographies, and I look at every geography every day. So I look at my four key theaters, then I can explode it down to if I want to see by country or by city or by key customer, even down to an individual sales rep. . . . And then we, I, listen to constructive criticism probably more, not probably, definitely a lot more than you do compliments. Compliments are nice and I always need them, but I really listen to what we need to do better very, very carefully.

[The key is] how do you put a lot of the day-to-day activities down one layer, and then over time down two, and then over time down three. And now the decisions that [once] would have come to the CEO might be made by the first line manager.

So for example . . . margins. Very often at the end of a quarter I might have realized that we had a problem in one of our product lines, that we didn't meet our margin expectations on it. Well, today the first line manager can see who has responsibility for that product, either in engineering or in manufacturing [and] that the second week into the quarter our margins aren't in line with what we expected. They can explode that information down because of our use of
Web-based architecture to understand exactly [what happened]: Are we discounting too heavily again? Is it because we're seeing more competition on a global basis, therefore we had to adjust, price-wise? . . . You can explode out your orders that are in the process so you can see: Will it correct itself or is it something that's going to get worse?

Well, those decisions used to come to the CFO and CEO two to three weeks after every quarter was closed. That now is done by the first line manager any time they want to look into it. That's what empowerment is all about. That's what the Internet is about. It's about empowerment.

WSJ: You run this company without a defined No. 2. Why?

Chambers: I think if you signal who's going to be your replacement too early, you put that person into a no-win situation. [And] you put other people into career decisions that may not be in the best interest of the company. So my own view is that probably within the last year before I leave I will signal, very vividly and very directly, who my replacement will be -- and that assumes that I don't mess up along the way and the board [replaces] me or my employees lose confidence or shareholders lose confidence in me. . . .
I think companies like GE have shown how important [waiting to designate a successor] is, in terms of both keeping the talent together, but also giving people a chance. Because the person who's most likely to be that person today may very well not be [that person] three or four years from now.

I will over time, however, have to empower a COO type of position in the company or one to two key leaders that I'll load more onto. You've got to have that responsibility in order to scale. So at some time in the future you will see me probably move with a COO just to pull part of the load. That's not an indication they are my successor, but it does mean that I've got to have one or two people who I give more responsibility to for the company.

WSJ: That's very different from your own experience. You came in, several years before you became CEO, as a clear No. 2, and with a promise of being No. 1. Wasn't that a good idea, or was that just a different time?

Chambers: Well, it was different time, different place, different age and a leader. [Chairman and former Chief Executive] John Morgridge made a decision for personal reasons that he didn't want to stay as the CEO and president of the company, and he would want to move on to chairman, and that he wanted a different skill set, somebody who was going to be in it for, potentially if things went well, the next 10-plus years. . . . And we didn't miss a beat.

By the time I was announced as CEO, I already had everybody reporting to me and John went off and rode a bike in Vietnam for four months. So the transition had been one of the smoothest ever. But it was very clear that John didn't want to stay in the leadership role and that he needed to be able to answer that question to the shareholders, to the board and to our employees.

WSJ: As fast as you've grown, you've got ambitious plans to grow even more, including the campus you're planning for another 20,000 people. Isn't there a little bit of hubris in planning for that many more people?

Chambers: Today, we still do most of our [planning] in the two-year scenario, but for product development we can go out to three-plus years and oddly enough, the area that we plan most for is campuses. To get a campus selected, to acquire it, to work it through the appropriate government and other entities that have an influence over that, and to get your building started and up, almost requires three to five years now.
If we're fortunate enough to become a $50 billion company in the next four to five years, and that depends on how well we execute -- but the market will support it, with or without Cisco, if it isn't us it will be somebody else -- we would need probably 100,000 employees.

Having said that, I also have the healthy paranoia. Every single building here and in [the new campus] will be built all with a separate entrance, a separate utility pattern. So if we ever had to, we could sell each one individually or lease each one individually. I learned that the hard way at Wang Laboratories.


Five Lessons From John Chambers On Managing Growth

1. Make your customers the center of your culture. Cisco ties employee compensation programs directly to customer satisfaction results.

2. Empower every employee: You will increase productivity and improve retention.

3. Thrive on change.

4. Teamwork requires open, two-way communication and trust.

5. Build strong partnerships. Leading companies this decade will focus on internal development, effective acquisitions and also forming an ecosystem of partnerships in a horizontal business model.

To do the Impossible ...
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The Power of Metrics:The CPM Dashboard Meets Six Sigma

Column published in DM Review MagazineJune 2003 Issue


By Kent Bauer

Digital dashboard, executive cockpit, business flight deck. While these may sound like terms from the training manual at the air force academy or a commercial flight simulator, today they are standard vernacular from the virtual glass house to the boardroom.
While CEOs and senior executives endeavor to steer through an era of turbulence and economic uncertainty by leveraging data assets to cut costs and improve operational efficiency, data derivatives such as key performance indicators (KPIs), customer metrics, operational benchmarks and balanced scorecards are becoming common at successful organizations. Gauges, meters, stoplights, interactive charts and alerts are now standard for monitoring and proactively managing business.


The corporate performance management (CPM) dashboard views are typically tied to key indicators companies use to measure performance and manage business. At GE, they have focused on developing KPIs that measure the bottom-line impact of sell (QTD sales, previous day's orders), make (QTD digitization savings, finished goods inventory) and buy (YTD indirect conversion cost percentage change, realized direct e-auction savings) decisions across all businesses.

In the customer relationship management space, companies are using CPM dashboards to measure the success of customer retention, cross-sell and customer servicing programs. However, the term CPM dashboard may have multiple meanings. For our purposes, the CPM dashboard is defined as a customized graphical interface that delivers mission-critical information on a real-time basis to business decision makers via a variety of visuals, including gauges, alerts, charts, table and spreadsheets.

Although gauges, meters and charts are the most visible components of the CPM dashboard, they typically reflect only 10 percent of the development effort. The other 90 percent includes resources devoted to data collection, cleansing, integration, meta data management and database development. Data warehouse, data marts and analytical engine components are the heart and soul of the CPM dashboard. Designed, implemented and managed correctly, these components not only ensure that data is consistent and accurate, but provide transparent drill-downs to the appropriate level of granularity to support business analysis. This allows the business users to investigate alternative cause-and-effect scenarios and base business decisions on real-time data, rather than anecdotal evidence.

What does Six Sigma have in common with the gauges, meters and stoplights on the CPM dash?

The journey from drawing board to successful implementation requires more than the proverbial pixie dust.
The set of comprehensive challenges for the CPM dashboard is extensive, requiring a framework and process that marry:

management's concerns (revenue growth/cost savings),
business needs (data access/analyses) and
technology deliverables (drill-down/collaborative communication capabilities).

While multiple methodologies have been developed to support individual functional areas (balanced scorecard, SDLC, RUP, etc.), only one transcends all - Six Sigma.

Six Sigma was employed at Motorola in the late 1980s as a measure of quality, but has since evolved into an overall business improvement methodology focused on systematically increasing product and process quality.

In the traditional statistical definition, Six Sigma's goal is to achieve no more than 3.4 defects per million opportunities (or Six Sigma) during the design and production of any product or service. In the 1990s, GE, Honeywell, Dow and other companies expanded the concept of Six Sigma to include customer focus, company culture, a statistical toolkit, a business philosophy and an overall goal for quality and performance.

Six Sigma offers an approach that is customer-focused, business-value driven and data and fact-based. Its best practices ensure that customer requirements, executive sponsorship and bottom-line impact are in place long before a project leaves the starting gate. This sounds optimistic, but Six Sigma has the power to deliver. We define Six Sigma as a barometer or thermostat for gauging and directing an organization's strategic focus with a twist of IT: Six Sigma is a comprehensive business management strategy incorporating a broad array of business best practices focused on delivering business value and customer satisfaction by leveraging data assets and IT infrastructure.

Although many of us think of Six Sigma as purely focused on improving existing processes through the DMAIC (design, measure, analyze, improve and control) methodology, a sister methodology DMADV (design, measure, analyze, define and verify) has emerged to address the development of new products and processes. The DMADV process is well suited for IT development projects such as the CPM dashboard. Many Six Sigma tools, such as VOC (voice of consumer), CTQ (critical to quality) trees, stakeholder analysis, affinity diagrams, SIPOC flows and impact assessment, add significant structure to project development efforts while mitigating risk.

Employing Six Sigma during CPM dashboard development and delivery helps assure the integrity of the information generated so business executives have the quality information they need to make decisions that affect company performance and results.

...............................................................................
For more information on related topics visit the following related portals...Metrics/KPI/BSC.
Kent Bauer is the managing director, Performance Management Practice at GRT Corporation in Stamford, CT. He has more than 15 years of experience in managing and developing CRM, database marketing, data mining and data warehousing solutions for the financial, information services, healthcare and CPG industries. Bauer has an MBA in Statistics and an APC in Finance from the Stern Graduate School of Business, New York University. A published author and industry speaker, his recent workshops have focused on integrating performance management and Six Sigma for KPI and dashboard development.
Please contact Bauer at kent.bauer@grtcorp.com.

http://www.dmreview.com/article_sub.cfm?articleID=6792

The Power of Metrics:The CPM Dashboard Meets Six Sigma

Column published in DM Review MagazineJune 2003 Issue


By Kent Bauer

Digital dashboard, executive cockpit, business flight deck. While these may sound like terms from the training manual at the air force academy or a commercial flight simulator, today they are standard vernacular from the virtual glass house to the boardroom.
While CEOs and senior executives endeavor to steer through an era of turbulence and economic uncertainty by leveraging data assets to cut costs and improve operational efficiency, data derivatives such as key performance indicators (KPIs), customer metrics, operational benchmarks and balanced scorecards are becoming common at successful organizations. Gauges, meters, stoplights, interactive charts and alerts are now standard for monitoring and proactively managing business.


The corporate performance management (CPM) dashboard views are typically tied to key indicators companies use to measure performance and manage business. At GE, they have focused on developing KPIs that measure the bottom-line impact of sell (QTD sales, previous day's orders), make (QTD digitization savings, finished goods inventory) and buy (YTD indirect conversion cost percentage change, realized direct e-auction savings) decisions across all businesses.

In the customer relationship management space, companies are using CPM dashboards to measure the success of customer retention, cross-sell and customer servicing programs. However, the term CPM dashboard may have multiple meanings. For our purposes, the CPM dashboard is defined as a customized graphical interface that delivers mission-critical information on a real-time basis to business decision makers via a variety of visuals, including gauges, alerts, charts, table and spreadsheets.

Although gauges, meters and charts are the most visible components of the CPM dashboard, they typically reflect only 10 percent of the development effort. The other 90 percent includes resources devoted to data collection, cleansing, integration, meta data management and database development. Data warehouse, data marts and analytical engine components are the heart and soul of the CPM dashboard. Designed, implemented and managed correctly, these components not only ensure that data is consistent and accurate, but provide transparent drill-downs to the appropriate level of granularity to support business analysis. This allows the business users to investigate alternative cause-and-effect scenarios and base business decisions on real-time data, rather than anecdotal evidence.

What does Six Sigma have in common with the gauges, meters and stoplights on the CPM dash?

The journey from drawing board to successful implementation requires more than the proverbial pixie dust.
The set of comprehensive challenges for the CPM dashboard is extensive, requiring a framework and process that marry:

management's concerns (revenue growth/cost savings),
business needs (data access/analyses) and
technology deliverables (drill-down/collaborative communication capabilities).

While multiple methodologies have been developed to support individual functional areas (balanced scorecard, SDLC, RUP, etc.), only one transcends all - Six Sigma.

Six Sigma was employed at Motorola in the late 1980s as a measure of quality, but has since evolved into an overall business improvement methodology focused on systematically increasing product and process quality.

In the traditional statistical definition, Six Sigma's goal is to achieve no more than 3.4 defects per million opportunities (or Six Sigma) during the design and production of any product or service. In the 1990s, GE, Honeywell, Dow and other companies expanded the concept of Six Sigma to include customer focus, company culture, a statistical toolkit, a business philosophy and an overall goal for quality and performance.

Six Sigma offers an approach that is customer-focused, business-value driven and data and fact-based. Its best practices ensure that customer requirements, executive sponsorship and bottom-line impact are in place long before a project leaves the starting gate. This sounds optimistic, but Six Sigma has the power to deliver. We define Six Sigma as a barometer or thermostat for gauging and directing an organization's strategic focus with a twist of IT: Six Sigma is a comprehensive business management strategy incorporating a broad array of business best practices focused on delivering business value and customer satisfaction by leveraging data assets and IT infrastructure.

Although many of us think of Six Sigma as purely focused on improving existing processes through the DMAIC (design, measure, analyze, improve and control) methodology, a sister methodology DMADV (design, measure, analyze, define and verify) has emerged to address the development of new products and processes. The DMADV process is well suited for IT development projects such as the CPM dashboard. Many Six Sigma tools, such as VOC (voice of consumer), CTQ (critical to quality) trees, stakeholder analysis, affinity diagrams, SIPOC flows and impact assessment, add significant structure to project development efforts while mitigating risk.

Employing Six Sigma during CPM dashboard development and delivery helps assure the integrity of the information generated so business executives have the quality information they need to make decisions that affect company performance and results.

...............................................................................
For more information on related topics visit the following related portals...Metrics/KPI/BSC.
Kent Bauer is the managing director, Performance Management Practice at GRT Corporation in Stamford, CT. He has more than 15 years of experience in managing and developing CRM, database marketing, data mining and data warehousing solutions for the financial, information services, healthcare and CPG industries. Bauer has an MBA in Statistics and an APC in Finance from the Stern Graduate School of Business, New York University. A published author and industry speaker, his recent workshops have focused on integrating performance management and Six Sigma for KPI and dashboard development.
Please contact Bauer at kent.bauer@grtcorp.com.

Valentine Inspiration

I WILL ALWAYS LOVE YOU, DEAR

(I do swear that I'll always be there. I'd give anything and everything and I will always care. Through weakness and strength, happiness and sorrow, for better, for worse, I will love you with every beat of my heart.)

W ith all my heart and all my being
I will love you and cherish you
L et us share, today and forever
L ove is beautiful

A new beginning, a new life starting
L ife is never the same without you and your smile
W e will walk the journey together
A lways hand in hand ,my dearest
Y ou’re the deepest desire of my heart; my inspiration, my everything
S o precious a treasure you are – I’ll always love you

L ife will be empty without your presence
O h, you're the answer to my prayers from up above
V oice of our hearts calling each other
E ntwined us together as one

Y ou are the one and the only one
O ur shared love will endure forever
U nited, never separated

D arling, darling,
E mbrace
A nd hold me tight in your arms
R emember our love!

Tune to “From This Moment On” by Shania Twain

The Four Universal Principles That Can Bring You Uncommon Success
by Loral Langemeier

I talk a lot about having a particular mind set when working on your business. It's the same wealth mind set I learned from my mentor, Bob Proctor. Some of you have seen Bob's stick figure drawings that show how we get the results we do in our lives.

Essentially, your thoughts become an idea. That idea causes a particular emotion. The emotion alters your vibration, and the vibration is expressed through action. The actions create the results that show up in your condition, circumstance, and environment. The action in turn causes a reaction that again alters your results. This is the same cycle we run through daily, and it's why a person stuck in poverty stays in poverty, and the person finding incredible deals keeps finding more incredible deals.

The stick figure's "head" is split in two - the conscious and subconscious. The subconscious is by far the larger of the two, and is your power center. Any thought you continuously impress upon your subconscious becomes fixed, or in the words of Michael Roach, "germinate, then expand."

This is where the principles put forth by Roach really intrigue me. I see a lot of truth in these principles, and I'll explain each in my own words.

The Four Principles:

1. Whatever it is you are currently experiencing always matches the general content of thoughts that were at one time impressed upon your subconscious.

2. The strength of the original impression continuously expands in your subconscious until it flowers and forces you to have an experience that directly relates to that impression.

3. No experience of any kind ever happens unless there was an original thought that had been impressed that relates to the experience.

4. Once a thought has been impressed in the subconscious, it must lead to an experience. No impression is ever wasted.

I'll try to relate these principles to a practical application, so you can get a sense of their power.

A young girl is told repeatedly that women don't have a good mind for business. This thought is impressed upon her subconscious, and grows throughout her teens. What she sees, and the experiences she has are in alignment with this impression and cause it to grow. She goes through college, finds a job, and moves to an area that is experiencing a real estate boom. However, all the houses she finds are bad deals, or she arrives too late. Her experiences match the impression in her subconscious that she doesn't have a good mind for business.

A second young girl is told that she can do anything she wants, and that she's got a good mind for business. Her experiences serve to reinforce this impression, and by the time she moves to the same area as the first girl, she's already created several businesses for herself. She sees incredible deals all over town, and jumps on them immediately.

Here we have two girls living in the same town. One sees great deals, the other gives up because she can't seem to find any decent deals. One believes she has a knack for business, and the other is convinced she's not good at business. The experiences they have and the circumstances that greet them on a daily basis match whatever has been impressed upon their subconscious minds.

How this Information can Change Your Life:

First, you have to realize that whatever it is you are currently experiencing is a result of thoughts and actions from your past.
Current circumstances are no more or less than the _expression of what has been impressed upon your subconscious mind.
You are simply experiencing what you have prepared yourself to experience. I see this as very good news, and here's why.
If what you're currently experiencing is a result of past thoughts and actions, then doesn't it apply that your future experiences will be a result of your present thoughts and actions? Yes it does!

You may have heard me talk about the importance of being in action, and about compartmentalizing your tasks throughout the day.
That is, when it's time to do email, you do email.
When it's time to work on a particular project, that's what you do.
This requires diligence and sometimes a great deal of practice to stay focused.
When you act in this way, you start creating little successes in each part of your life.
These successes and the focused attention create NEW impressions upon your subconscious. These new impressions will eventually surface in the form of new experiences.

Think of it a different way, and this will blow your mind.

To experience what you want in the future, all you have to do is begin impressing into your subconscious the thoughts that directly relate to that experience today, then acting according to the feelings you have when you impress those thoughts.

This is how you create new experiences.

Simply figure out what you want to experience, and work your way back from the experience to determine the thoughts and actions that will create the experience. This always works, without exception.

Positive thoughts get reinforced through positive action, and negative thoughts through negative action. It's an incredibly simple concept to understand, but takes a lot of patience and persistence to get right, and you have to stick with it. Here's a practical example.

Say you want to get involved in flipping real estate, but your current experience is that everyone else seems to find the good deals, and that you always get there too late. Look back at your life to examine the thoughts and actions that were impressed upon your subconscious and resulted in your current experience.

In "The Diamond Cutter", Roach goes through 46 business problems people face, and identifies the root cause and how to create new impressions.
It's likely that, if you're always behind or left out, you had this image of yourself impressed upon your subconscious early in your life. Maybe your brother or sister got all the attention, or you had to wear his or her old clothes.
These thoughts create feelings of inadequacy, resentment, or jealousy.
Actions are then based on these feelings, and reinforce the impression of "not good enough".
You have to break the cycle and create new, positive impressions.

What I like about Roach's approach is how much it requires very specific action to create a new impression in your subconscious.
People who don't take the time to do a financial baseline or forecast are fueling the impression of lack - lack of time; lack of resources; or lack of money.

To create the opposite impression in your subconscious, complete your baseline and forecast as a way of impressing the thought that "there is plenty of time to do what's needed for my business, and I believe I can make my targets."

It's important to understand that the simplest tasks often create the most powerful impressions.

Knowing that you have over 60,000 thoughts in a day, what if you took actions throughout the day that required you to have mostly positive thoughts?

In the above example, the person who feels that everyone else gets the good stuff would benefit from having a mini-celebration every time she hears about another person's success.
This impresses the idea that there are good deals to be had, and getting them is a very good thing. Yes, it's that subtle, and that easy to create new impressions.
Remember to give it time, though.

Creating the impressions that result in building wealth and the _expression of your power

1. Examine your current situation and understand what has been impressed upon your subconscious.

2. Create the vision of what you want to experience in the future.

3. Determine the thoughts and actions that will most likely result in those experiences.

4. Define the strategies and tactics necessary to impress the right thoughts and take the right actions.

5. Go into action.

More specifically: If you haven't already created your 2006 baseline and forecast, do it as soon as possible to nurture the impressions of success.

Take the steps to protect your assets and your business.

This helps to create the subconscious impression of your value and worth.
Develop real marketing plans for your business to impress upon your mind your ability to succeed.
Create or further develop your wealth team.
Surround yourself with quality people you trust, and you impress upon your subconscious the energy or idea of quality. This results in quality experiences.
Celebrate in the success of your colleagues, and learn to collaborate instead of compete.
Collaboration and celebration (and gratitude) create impressions of success in your subconscious, so that you may create future experiences in which you feel celebrated and grateful.

Summary: These are extremely powerful concepts.
Yes, you absolutely need to learn about and exercise the fundamentals of wealth building. Develop your plan and strategy.
Create your baseline and entity structuring.
But, perhaps most importantly, begin creating the kinds of impressions on your subconscious that will eventually lead you to the experiences you want to have. I am constantly working on my mental conditioning, as should you if you want to join me at the head of the table.

Loral Langemeier, author, speaker and founder of Live Out Loud is a pioneer in financial coaching who empowers people to build wealth and achieve financial success.

LEARN!
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The Anatomy of a Change Agent

A CLEAR MIND, one that is not cluttered with unresolved issues or unexamined motives.

EYES that can see beyond today.

EARS that can listen to other points of view.

A NOSE that can sense opportunities and timing.

A MOUTH that can speak out with honesty and respect.

A HEART that can feel others pain and respond with compassion.

A FIRE IN THE BELLY – a sense of passion and responsibility that makes one want to rise each morning.

SKILLFUL HANDS that can do scut work as well as strategy.

LIGHT FEET that can move swiftly when the timing is right.

The SOUL OF A WARRIOR - with a deep sense of honor, perseverance, and patience, along with the willingness to act decisively.


© 1999, C.M. Perme & Associates, Inc.

Agents of Change
By Cathy Perme

What makes a change agent different from someone who just raises hell and makes life difficult for everyone else? The difference lies in their sense of responsibility for the change itself and care for the people who must live with it.

I recently participated in an intensive research and study group on non-violent systems change that drove this message home. Within our small group in Bandera, Texas, were change agents from Northern Ireland, Albania and the Balkans, South Africa, and the U.S. Some held positions of power, some were community activists, and some simply found themselves in situations they could not ignore. Our conversations were intense, real, and immediate. Here is what I learned about change agents in the midst of change:

1. Real change agents have often had a “watershed moment” when they recognized, with keen perception, the entirety of a situation and what they could do to influence it. One of our group, a Protestant minister from Northern Ireland, once bore the casket of a young Catholic boy killed by extremists. His courage at that moment helped to avert further retaliation and bloodshed in his own community.

2. Real change agents are skilled individuals who are comfortable with whom they are. They are clear about their values, they understand their own motivations, they are confident in their own skills, and they know how to build coalitions and ask for help. They may be a product of their
history, but they are neither blinded nor possessed by it.

3. Real change agents are willing to submit their egos to a larger goal. It was often not easy for the three folks from Northern Ireland who represented different interests to be in the same room together. But they had a common goal – sustaining peace – and were firmly dedicated to it.

4. Real change agents build energy and consensus, and do not divide and conquer. The allure of power politics is overwhelming and can often produce short-term results. Each of these change agents knew that long term, systemic change came from the people whose lives were affected by it. Their focus was on ways to build trust, dialog, and movement to help people let go of perceptions and beliefs that limit their future.

There are real change agents working everyday in our organizations and communities. Being a change agent is not about personality. It’s not about leadership style. It is about awareness, conviction, humanity, and courage.


It is a far cry from just raising hell.

'You Cant Create a Leader in a Classroom.'

Professor Henry Mintzberg is one of the world's most influential teachers of business strategy. Now he's developing a new lesson plan: to change the very essence of business education itself.

From: Issue 40 November 2000 Page 286 By: Jennifer Reingold Photographs by: Chris Chapman

Henry Mintzberg, 61Professor of managementMcGill UniversityMontreal, Canada

Attending the annual meeting of the Academy of Management with Henry Mintzberg is the business-world equivalent of attending the MTV Video Music Awards with Mick Jagger. The Academy is the world's largest association devoted to the study of management, and its annual meeting is a marketplace for aspiring professors looking to land their first job. At the presidential luncheon, where Mintzberg is to receive an award, he can scarcely manage a forkful of pasta with cream sauce without being tapped on the shoulder again and again by starry-eyed fans. "I just had to meet you," gushes one such follower. "I can't wait to tell my colleagues!"

When Mintzberg bounds to the stage to claim his award, applause courses through the cavernous ballroom of the Toronto Sheraton Centre. As the luncheon ends, he is mobbed by well-wishers and colleagues. Posing awkwardly for a photograph with a professor from the Netherlands, Mintzberg looks both gratified yet a bit irritated by the fuss.

His fans are enthusiastic for a reason. With 10 books and more than 100 published articles to his credit -- and with a faculty position at McGill University, in Montreal, as well as at INSEAD, the high-profile business school outside Paris -- Mintzberg, 61, is a dominant figure in the field of management and strategy. For some 30 years, he's been contributing pathbreaking ideas and trailblazing analyses, all rooted in the real work of companies and their executives, to a discipline that often feels stuck in the abstract and the theoretical. And although many of his ideas were considered radical (some would say downright heretical) when he introduced them, Mintzberg is "hot" again: More and more companies are realizing that there's an enormous difference between a CEO with keen financial instincts and a great leader. Mintzberg has shown that management itself is as much a Jackson Pollock painting as it is a quantifiable science. "There's a reason I'm getting this award in 2000 instead of in 1990," Mintzberg says, flashing an ironic smile.

It would be easy for Mintzberg to bask in the overdue glory, to become yet another past-his-prime academic celebrity who recycles old ideas into new books and gets paid ridiculous sums of money to regale corporate bigwigs at off-sites. But that's never been Mintzberg's style. Indeed, these days, Mintzberg is in hot pursuit of a personal goal that he wrote down on a scrap of paper almost two years ago and then locked away in a vault at a bank in Montreal. He plans to open the vault someday to see if he will have delivered on the goal. One of the things that he wrote: "Change management education."

It sounds like a strange ambition, given that management education in general, and the MBA in particular, has never been more popular. Top business schools are overflowing with applications; companies famous for their mutual love affair with MBAs (Goldman Sachs and McKinsey & Co. immediately come to mind) now scramble to compete for the affections of the top graduates from the best schools. If it ain't broke, one can't help but wonder, why fix it?
Pose that question to Mintzberg, and you'll get an earful as he explains, calmly but firmly, that management education is terribly broke. "The MBA is a fabulous design for learning about business," he says. "But if you're trying to train managers, it's dead wrong. The MBA trains the wrong people in the wrong ways for the wrong reasons."

Mintzberg concedes that the U.S. style of management education is in demand around the world -- but mainly, he says, for the big bucks that such a degree confers upon its holder. "Right now, we are creating a kind of neo-aristocracy," he complains, "a 'business class' that believes it has the right to lead because it spent a couple of years in a classroom." But if you really want to learn how to be a manager, he says, you need to be in an environment with, well, other managers. "This is supposed to be about leadership," he says. "You can't create a leader in a classroom."

Mintzberg has other questions. How can aspiring managers expect to learn from business-school case studies -- which are obsolete on the day they are printed and which give the professor too much control over classroom discussion? What does it mean to learn to think globally? It's not enough, Mintzberg insists, to teach American-style ideas to a class with a smattering of students from outside the United States. To become a global-minded manager, you have to learn how people from other countries and other cultures think and act in various situations. And how many companies really value the idea of management education itself -- as opposed to the credential? "I ask a lot of managerial groups, 'What happened on the day you became a manager?' " says Mintzberg. "And the answer, almost inevitably, is 'Nothing.' It's like sex. You're supposed to figure it out."

Lots of professors are good at raising provocative questions. What distinguishes Mintzberg is that he is devising answers. Along with a colleague, Jonathan Gosling of Lancaster University Management School, in the United Kingdom, Mintzberg has created an educational experience that is in many ways the anti-MBA. The program, an International Masters in Practicing Management (IMPM) , is now in its fifth cycle. Nearly 180 participants have gone through the program, and, according to those participants and their sponsoring executives, it has had an indelible impact on their personal and professional lives. "It changes people more than any other program I've seen -- ever," says Frank McAuley, 44, a Kellogg MBA and vice president for leadership effectiveness at the Royal Bank of Canada, which has sent 16 people through the program. "It brings them to a different place."

Learning to Learn

Henry Mintzberg's entire career has focused on understanding how managers make decisions and how they develop strategy. After studying mechanical engineering at McGill, he went to work in operations research at Canadian National Railways. Then he went to MIT to study management and decided to switch tracks, so to speak, because he was more interested in how people worked than in how things operated.

In his first book, The Nature of Managerial Work (Harper and Row, 1973) , Mintzberg explored his topic by watching what managers actually did in their offices, rather than, as most academics do, by inventing theories and then trying to back them up. What he found demolished the assumption that managers were organized and confident planners. His research demonstrated that real bosses spent more time responding quickly to crises than they spent doing anything else -- a lesson that many new-economy chieftains think they're discovering only today. Although the book was rejected by 15 publishers before it reached bookstore shelves, it became a huge success -- and Mintzberg's career as an influential author was on its way.

Although Mintzberg had been railing against management education for years, what had been theory became practice in 1993, as he was considering a new MBA program at McGill. He heard about a more practical model that Gosling had been using at Lancaster with British Airways executives. He first tried, and failed, to create a joint program along the Lancaster lines with INSEAD. Then he approached Gosling himself. Working together, the two decided to create something completely different: a program that focused on teaching real executives how to deal with real problems, the kind that don't fit neatly into case studies. The duo toyed with calling the program the "Alternative MBA," and then with calling it the "Real MBA."

"That wouldn't distinguish it," says Gosling, "so we had the notion of 'Real-Alternative MBA,' which would have the acronym RAMBA, a sort of feminine Rambo. We liked that, but there was no way that the management school at Lancaster was going to allow us to launch something called 'RAMBA' while it was still trying to sell the MBA." Once it was dubbed the 'IMPM,' Mintzberg and Gosling decided to make the program more global by adding INSEAD, the Indian Institute of Management and Japanese faculty from several schools, including Hitotsubashi University. The first cycle began in spring 1996.

So what makes the IMPM different -- and more worthwhile -- for managers? Start with this: There is no home campus for the program, which consists of two-week modules spread over 16 months and five countries: Canada, France, India, Japan, and the UK. After each module, when students have returned to work, they must write a reflection paper describing how what they learned relates to their job. They meet regularly with a tutor in their area and work on "ventures," which are program-long projects to create real change in their own work environment. There are five modules: Managing Self, the reflective mind-set; Managing Relationships, the collaborative mind-set; Managing Organizations, the analytic mind-set; Managing Context, the worldly mind-set; and Managing Change, the action mind-set. Each module is presented by one of the five partner universities. Students travel to each campus for one module and spend the time immersed in the home culture of the country, making company visits (called "field studies") and learning from colleagues, some of whom are now in their home country. "It has been absolutely a life-changing experience," says Jane K. McCroary, 45, project manager for the online travel portal at Deutche Lufthansa AG and a member of the first graduating class. "Somehow IMPM learning was implicit in the stomach, in the gut. You learned not explicit things but things that improved judgment and performance."

In the IMPM, all students must be practicing managers and all must be sponsored by their companies, which include Alcan Aluminum Ltd., AstraZeneca PLC, Deutche Lufthansa, the International Federation of the Red Cross and Red Crescent Societies, Matsushita Communication Industrial Co. Ltd., Motorola, and the Royal Bank of Canada. Students stay in their jobs, so that classroom activity can be connected to ongoing work experiences. The IMPM also encourages people who already work in groups, whether those groups are in-person or virtual, to attend the program together. This is both a support network and a better way of ensuring that new ideas will become reality when the participants return to the work world.

Another critical distinction is the concept of reflection -- quite a switch from traditional executive education, which uses a lot of "action" learning or case studies. "The last thing managers need from us is boot camp -- intense, high-pressure classroom activity," says Mintzberg. "They live boot camp every day! What they need is to step back from the pressures and to reflect on their experiences." Because Mintzberg rejects the notion of silos, most of the business functions are covered either in the analytic module or in "close learning" (otherwise known as "distance learning") between modules. This doesn't mean that you have to hug a tree or dance at a powwow at every session of the IMPM -- though you will sometimes find yourself in drama workshops or yoga classes. What it does mean is that you must learn to ask the right questions, to reflect, and to avoid the traditional manager's trap of reacting to one crisis after another. "Management is, above all, a practice, where art, science, and craft meet," says Mintzberg.

It is that type of interaction that seems to have the most impact. When McCroary was in Japan for the collaborative module, she was walking with another student, an engineer from Matsushita, amid cherry blossoms falling from trees onto a driveway. "He explained to me that a lot of Japanese haiku is written about exactly this event, and I admitted that I had been thinking 'What a messy tree.' The combined effect was so powerful that when I got home, I made it a point to select people who were different from me in a project."

A recent innovation at the IMPM is the 50-50 rule. Unlike the traditional lecture or case format, where a professor is the only expert in the room, IMPM sessions allow students to spend half of the time in conversation with other students. The discussions often veer off on tangents -- but that's the point, says Mintzberg: The executives must decide for themselves what's relevant. "Our program doesn't take more work," he says. "It almost takes less work. But you have to have a lot of depth and understanding and then react to the class." The Royal Bank of Canada's McAuley sat in on a session in Bangalore the day after the IMPM participants had visited several Indian companies. The next morning, like every morning, began with a session called "reflections." "That was the most fascinating conversation in an academic setting that I had ever seen," McAuley says. "We zoomed around the room discussing everything from political to economic issues, and then got into ethics and business."

The IMPM's managerial exchange takes the 50-50 rule to its logical extreme. Between two modules, participants spend a week at a partner's office and then present a paper detailing their observations. That was the highlight of the program for Jeff Guthrie, 42, a 24-year veteran of the Royal Bank of Canada. He accompanied his partner, Helga, an Icelandic native and a team leader for West Africa for the International Federation of the Red Cross and Red Crescent Societies, to a refugee camp in Sierra Leone -- her "office." Apart from the shock that he felt from seeing firsthand the extent of the human suffering there, Guthrie learned a real management lesson. "It was typical, if we had a problem, for our solution to be 'give me, give me, give me the resources that I need to solve this,' " he says. "What the Red Cross taught me was that people said, 'How can I solve the problem with what I have?' "

"Move Society -- Have Some Impact"

The IMPM's spirit of informality and on-the-fly innovation come straight out of Mintzberg's worldview. He seems to find inspiration in any kind of conversation or event, such as the Montreal jubilation gospel choir that he saw last Christmas. "It was the best thing I'd ever seen on a stage in my entire life," he says. "Not that it was the most polished performance; it was just unbelievable energy. I watched that and said the role of a manager is to bring out the energy that's inherent in people."

Mintzberg takes that same open-mindedness to his research on strategy. "I often think that if we got rid of the word 'strategy,' we'd be better off. Not because strategy is bad, but because we formalize it. Strategic planning is an oxymoron. The idea that it is immaculately conceived, like Moses walking down from the mountain, is silly."

Now that the IMPM is established, Mintzberg is moving on. He has stepped down as the program's chairman (Gosling will take over his role) , but he's hardly abandoning the cause. Instead, he's trying to "diffuse" the concept to other sectors. He's writing a book called Developing Managers, Not MBAs, about management and about the theory and practice of the IMPM. Already there is an IMPM for Canadians in the volunteer sector, and plans for a health-care IMPM are under way. And the day after the awards luncheon in Toronto, Mintzberg and his team met with executive-development heads from nine companies to sell them on Mintzberg's latest concept -- ALP, the Advanced Leadership Program. It's an IMPM for very senior managers. If all that isn't enough, there's the rest of civilization to think about. Also written on Mintzberg's locked-up sheet of paper are the words "Move society -- have some impact." So Mintzberg is stretching beyond management with a new book, tentatively titled Getting Past Smith and Marx: Toward a Balanced Society. He thinks the structure of current political and social dialogue has been corrupted by the twin tyrannies of shareholder value and rampant consumerism.

The success of the IMPM suggests that after years of MBA bashing from the Canadian wilderness, the world may finally be moving toward Mintzberg's point of view. Traditional MBA programs are now trying to bring out the more emotional, thoughtful side of management. Companies everywhere, desperate for more effective leadership, are working with their executives to develop more robust approaches to managing, rather than simply sending them off to cookie-cutter executive-education programs. "It was extraordinary at the Academy of Management this year to hear so many people saying the same thing as Henry's been saying for years," notes Gosling.

And yet, while that's happy news for Mintzberg, it's obvious that part of him relishes the role of the renegade, the naysayer, the lonely voice on the fringe. "I've always been a cynic about things that are too popular and too widely believed," he frets, peering intently over round, metal-framed glasses. Indeed, Mintzberg says that he does his most creative thinking when he's involved in some type of solitary physical activity, whether it be canoeing, cross-country skiing, or bicycling. Back in 1987, when he was finishing an eight-day bike trip from Paris to the Charles de Gaulle Airport, he was loaded down with gear and luggage. As he approached the Champs-Elysées, Mintzberg saw a phalanx of police officers guarding a bizarrely empty avenue. He asked what was going on, but no one responded, so Mintzberg slipped past a barrier for a bit of experiential learning. He rode alone down the long, wide avenue until he was spotted by a slack-jawed policeman at the end of the street.

It turned out that the Canadian professor had nearly managed to become the first cyclist to ride along the Champs-Elysées as the Tour de France came to a close. It's not a bad metaphor for his career: one of the most original minds in management, charting his own course, being chased by others, who are pedaling furiously and who get to the same spot as Mintzberg -- only much later.

Jennifer Reingold (jreingold@fastcompany.com) is a Fast Company senior writer. Contact Henry Mintzberg by email (mintzber@management.mcgill.ca) , or visit the IMPM on the Web (www.impm.org) .

Sidebar: What's Fast
How do you get stressed-out executives to turn off their cell-phones, close their day planners, and open their minds to learning? It's a question that both fascinates and torments Henry Mintzberg, Cleghorn Professor of Management Studies at McGill University, visiting scholar at INSEAD, and cocreator of the International Masters in Practicing Management. Here are some of his basic beliefs.

Real executives only, please. The concept of teaching management to twentysomethings who are just a few years out of college makes no sense to Mintzberg. Only by having been in the trenches can you relate personally to what's being taught. You must be sponsored by your company and should continue to work while you're in the program. Only if you have experiences of your own to share can you contribute to class discussions.

Your colleagues are also your teachers. The IMPM uses what's called the "50-50 rule," which means that for every hour the professor speaks, students get an hour to discuss issues that are relevant to them. That allows the lessons of the classroom to flow immediately into the real-life experiences of the students. And because IMPM students sit in groups around tables, rather than in the standard U-shaped classroom (which Mintzberg believes deifies the professor) , it's easier for lessons to flow.

Smash the silos. Most MBA programs still teach through the prism of specific subjects such as finance or marketing. But that's no way to learn, according to Mintzberg. "The MBA is fine for training," he says. "But the concept of teaching specific skills in finance or in marketing does not help with the real-life decisions that people make in the business world each and every day."

The IMPM, in contrast, uses holistic mind-sets such as "reflective" and "analytic" to connect the dots. And since many of the IMPM students are now in general-management roles, that's where they should stay. Says Mintzberg: "Why would you want to push them back into the silos?"
Be ready to abandon the script. In the IMPM, each module is redesigned at the end of the preceding one to bring in some of the most current problems and issues faced by the students. If everyone is struggling with e-commerce, for example, the program is flexible enough to spend extra time in that area and to eliminate a workshop that is less than enthralling to the students. While there is always a blueprint, it is up to the students to make their education relate to their jobs, and the IMPM professors adjust where necessary.

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