20 posts tagged “management”

The Billionaire Broker: The Early Years of Charles Schwab

 

Charles Schwab always had difficulty in school, but he never knew why. Today, he has become one of the most famous – and successful – dyslexics in the world. From using comic books to help him pass English literature classes to heading up the largest discount brokerage in the U.S., Schwab’s current fortune of $5.5 billion ranks him as the 57th richest person in the country.

 

Charles Robert Schwab, Jr. was born on July 29, 1937 in Sacramento, California. His childhood was a difficult one, with his small-town lawyer father constantly turning family dinner conversations into talks about “how limited resources were.” As a result, Schwab was put to work early on. “I did as much as I could: raising chickens, pushing an ice-cream cart, bagging walnuts, driving a tractor on a beet farm, working on the railroad,” he says. “I think this eclectic career helped me a lot in life.”

 

Schwab went to school in Woodland, where he quickly discovered he had a problem. He could not read or understand English as well as the rest of the students. Knowing little about dyslexia at the time, Schwab’s teachers simply thought he was a slow student. He did not tell anyone about his problem for years to come, but he knew he would have to work hard to overcome it. He turned to the Classic Comic Book versions of the likes of “Ivanhoe” and “A Tale of Two Cities” to help him through his reading assignments.

 

“I bluffed my way through much of it, I’m sure,” says Schwab. “Fortunately, I have a pretty ‘up’ personality, and that helped me all the way through. I tried hard and I had pretty good communication skills, so I could persuade my teachers that I was a pretty good kid.”

 

After graduating from high school in 1959, Schwab was accepted into Stanford University, thanks in large part to his high grades in economics and his strong golf game. There, he earned a bachelor’s degree and an MBA. All the while, however, he continued to suffer from dyslexia. As a freshman, Schwab admits to having been “completely buried,” and he failed both French and English. “To sit down with a blank piece of paper and write was the most traumatic thing that had ever faced me in life,” he says. “I had ideas in my head, but I could not get the stuff down. It was a crushing time.”

 

As a result, Schwab finally turned to economics; numbers were the one thing he could understand. “I never perceived of myself as stupid; I can’t explain why,” he says. “I just thought that if I worked harder, maybe something would happen.”

 

After receiving his MBA, Schwab became a mutual fund manager and excelled. But a few years in, he was craving for more. In 1963, Schwab launched Investment Indicator with two other partners. It was an investment advisory newsletter that quickly grew to have over 3,000 subscribers. At a cost of $84 per annual subscription, Schwab was making a handsome income on the side. But still, he wanted more.

 

Finding Success in Stocks: Schwab Launches His Company

 

 Schwab was ten years into his career when he decided to venture off onto his own and start his own company. He had a vision for a business that would shatter the investing world. Schwab wanted to break down the barriers to Wall Street and make it easier for the average American to invest. How could he do that? Schwab had figured out how to lower the fees for buying and selling stock.

 

Schwab approached his uncle Bill, a fellow entrepreneur, who agreed to finance his nephew’s dreams. With a $100,000 loan, Schwab founded First Commander Corporation, whose philosophy was that the stock market should be open and accessible to everyone. After its first two successful years in business, Schwab bought out his partners, assumed all of the company’s debt, and changed its name to Charles Schwab & Co., Inc.

 

The young company quickly began to make a name for itself, especially in 1974, when the SEC initiated a 13-month trial period for the deregulation of certain brokerage transactions. While other brokers were using the time to raise commissions, Schwab decided to go the opposite route. He would create a discount brokerage firm. When the trial period was over, the SEC officially approved negotiated commissions, and the discount brokerage industry was born.

 

With that, Schwab branched out of San Francisco and opened an office in Sacramento. Advertisements began running across the country, portraying Schwab as a working class broker. By 1979, the company boasted over 33,000 customers. From there, Schwab began to introduce new features, including a 24-hour weekday quote service, and a state of the art computer system.

 

In 1981, Schwab made two prominent acquisitions and opened its first office in Manhattan. Two years later, the company was bought by the Bank of America for $57 million and celebrated its 500,000th customer account. Schwab continued to improve its services with the introduction of new online products like The Equalizer, and the touch-tone quote system SchwabQuotes. But in 1987, Schwab managed to buy back his company for $280 million and promptly went public. Its IPO of eight million shares sold for $16.50 each.

 

By 1994, Schwab had reached over $1 billion in revenues and $100 billion in customer assets. Its further growth was the result of an early focus on online technologies. Schwab launched Internet trading in 1996, and in just two years, it had gained over 1.8 million online accounts.

 

The collapse of the market would hit Schwab hard. Between 2000 and 2002, profits fell from $718 million to $109 million. In response, the company, which was under different management then, cut some 6,500 jobs. Then, after it did not bounce back as expected, the company called back its founder.

 

In 2004, Schwab returned as CEO to the company he had founded. Schwab hired outside consultants to assess the situation. After agreeing with their findings, he decided to cut $600 million in expenses and another 2,000 jobs. He also reduced fees and commissions, and closed down divisions that diverted attention away from the company’s original goal of serving individual investors. International offices were also closed.

 

Schwab wanted his company to shift away from being solely dependent on commissions to being a full-service broker. “We brought prices down, down, down so they are now essentially commodities,” says Schwab. “So if we want to succeed in this business, we have to move in a direction of adding other value to the relationship with our clients. And so where I might have said 15 years ago, 'We want to be the best discount brokerage,' today I want to be the best 'relationship company' in financial services.”

 

The company bounced back. Client assets rose from $942 billion in 2004 to $1.2 trillion just two years later. And now, Schwab wants to do it all again.

Can You Evaluate Your Own Abilities?...omg! its undoubtedly one of the toughest question to answer and also one of the hardest thing to implement in real life...isn't it?

A Cornell psychologist explains why it’s almost impossible to judge your own competence -- and how to overcome the blind spots

• Employee Engagement
• Performance Management

A GMJ Q&A with David Dunning, Ph.D., professor of psychology at Cornell University

 

Here it goes....

 

How good of a driver are you? Pretty good? Pretty great? Maybe the next Jeff Gordon, if you only had some training and a jumped-up Chevy? Well, perhaps -- but probably not, and you'll probably never know.

It's difficult, almost impossible, for us to accurately evaluate our competencies. So says David Dunning, Ph.D., professor of psychology at Cornell University and author of several books and papers on accuracy and illusion in human judgment.

Dr. Dunning focuses on the difference between people's perceptions of their abilities and reality -- a gap that can make all the difference in business. Why? Because our own incompetencies blind us to our incompetence. Employees are often asked to tackle something new at work; some will excel while others will fail. Is there a way to predict that failure in advance and avoid it? Furthermore, decision makers must have confidence in their fundamental ability to do their job, but when that confidence is misplaced, even once, the whole organization can suffer. Most business missteps and mistakes are essentially errors in judgment of judgment.

There are ways, however, to objectively evaluate your competence before you fall on your face. In this interview, Dr. Dunning discusses how to work around blind spots, how to make critiques more effective, and what to do when a coworker fails to accurately assess his or her competence.

GMJ: Why do people tend to overestimate their abilities?

Dr. Dunning: There are many, many reasons. The first is the spin we tend to give the feedback we receive about ourselves from the outside world. That is, we claim credit for our successes and lay blame for our failures elsewhere. Second, what people tell you to your face is never exactly what they're saying behind your back. That will give you an inaccurate idea of your abilities. And finally, people just don't have all the information they need to be able to see themselves accurately, and what they miss tends to leave them overconfident.

When we're incompetent, we're not often in a position to recognize that incompetence. Often we make errors of omission because we're not aware of how we could have done a task in a better or a different way. But because we are unaware of these alternatives, we think instead that we've done just fine.

So there are just a whole host of reasons why people generally, but not always, are left with a sense of confidence that may not be justified.

GMJ: There's a lot of research into gender differences in self-appraisal of competence. For example, some research shows that men tend to overrate and women under-rate their ability to pick stocks. Both views are inaccurate, though. Is that same gender dichotomy true in other aspects?

Dunning: No. At least in American culture, you find that both genders tend to be overconfident, but the tendency will differ depending on what area of life you're talking about. So it may be true that men are overconfident about their ability to pick stocks, but if you move to, say, knowledge about literature or aesthetics, the gender difference may go away or reverse.

If you take a look at teenage kids, boys will be more positive and overconfident in their ability to deal with science than girls are. But if you move to English, that gender bias goes away. In the North American culture, if there's going to be a bias that people on average tend to have, it's to be overconfident, though that obviously doesn't happen all the time. And that's not necessarily true in other cultures.

GMJ: What's the danger of being overconfident? What's wrong with being wrong?

Dunning: There are some areas where it could be right to be wrong, but I think we all can easily imagine areas where overconfidence can certainly get you into trouble. I wouldn't want to be an overconfident gambler. I wouldn't want to be an overconfident airplane pilot. I wouldn't want to be a doctor who doesn't know when he or she has to call in a specialist for a consult.

There are a number of areas where overplaying your expertise can have bad effects for you and the people around you. Now there might be some areas, and I think this is under explored in psychology, where being overconfident and being unrealistic may actually be helpful. Those areas tend to be where people are facing the extremes of life -- like you're putting your life together after your country has gone through a civil war, or you're facing a cancer diagnosis.

GMJ: Shelley Taylor [a professor of social psychology at UCLA] recently won the Clifton Strengths Prize for, among other things, researching just that -- she studied breast cancer patients and found that positive illusions are enormously therapeutic.

Dunning: That's right. I think the way to think about psychology is that everything is true -- but only in its specific context. So my take is that there are areas where overconfidence may be helpful. Something that energizes you, even if it's unrealistic, would be good for you in a difficult situation.

On the flipside, though, there are other contexts or situations where the exact same tendency is not something you want to display. I would not want to be a person with foremost confidence in my poker ability going up against a professional like Gus Hansen, for example. That's a situation where you're much more likely to be dead money than a winner. The consequences of overconfidence do depend on the exact situation or the exact task you're facing.

GMJ: People need to accurately judge their abilities, sometimes more than others, as you said. How can you figure out what you can't figure out?

Dunning: One of the pet phrases I have is "The road to self-insight runs through other people." Other people can often give us invaluable feedback that can really correct an illusion that we're suffering from.

One of my favorite, but most chilling, findings is from a study that surveyed surgical residents. They were asked about their surgical skills, and then they were given the standardized board exam. The residents' views of their skills didn't predict at all how well they did on the exam. But the impressions of their peers and their supervisors strongly predicted how well they did. Thus, there are times when what other people think of you can be an invaluable source of what you need to work on and what you're already good at.

And it can happen in different ways -- you don't always necessarily need formal feedback. If you just observe other people and see how they handle situations that you come across as well, you can more accurately judge your own skill in that situation. It's called benchmarking. I mean, it's no secret. Often you find different or better ways to deal with situations that you just hadn't thought of.

As I mentioned, people can't be expected to be aware of their errors of omission. But if you see how other people handle the same situation, it may clue you in to things that you didn't know you didn't know. And that can make you more accurate about yourself and more competent.

GMJ: Are there other ways to become better at self-evaluation?

Dunning: You can self-test, though it's easier to do it in some areas than others. When you're doing a task, evaluate yourself, and then try to get an evaluation from some outside source just to see if your evaluation agrees with more objective evaluations from the outside world.

One interesting thing for organizations to consider is, when employees are being trained, such as in technical skills, give them tests to evaluate their progress, but also have them estimate how well they did on the test. That may go a long way to alerting people to deficits that they didn't know that they had -- both in their skills and their ability to judge those skills.

You really do need some outside agent to point out that you have a deficit that you weren't aware of. You can't depend on your own devices; you really do have to seek help to get a better, accurate image of where your shortcomings lay.

GMJ: When you critique others, particularly people who work for you or maybe even peers, what do you do? Do you give an accurate critique or a tactful one?

Dunning: Giving feedback is a tricky business, and nearly 40% of feedback programs actually demotivate people. There is a skill to be learned here, and there are two things we can do to give feedback that's motivating, accurate, and tactful. The first thing is to give feedback that is concrete, as opposed to feedback that's about the person's character. You want to talk at the behavioral level. Feedback should not feel like a character attack, but rather a helpful suggestion. The other thing is to not only point out the bad, but point out the good, at a behavioral level.

So when you give people feedback, give them feedback that's both positive and negative. If all the feedback is just negative, negative, negative, they might develop some psychic calluses against that feedback.

The last thing I would mention, though, is that feedback becomes more risky and the consequences are higher if you receive it only rarely. Instead, to the extent that feedback is a small event that happens frequently, every piece of feedback carries less of a threat. You don't want managers and employees to be giving everybody feedback every five minutes, but giving feedback often and in small doses removes or reduces the threat level associated with it. You might want to spend more time with employees, giving them explicit goals for the week, the month, and the year.

GMJ: Because everybody hates annual reviews, right?

Dunning: Oh, everybody hates reviews -- giving as well as receiving them. And that creates a problem that managers have to avoid, which is waiting until you're angry to give the feedback you really want to give.

Think of what it's like to hear feedback from an angry person. Why on earth would a person listen to you when you're yelling at him? You're a crazy person; you are not giving objective feedback. One of the reasons to give feedback in frequent small doses is so you're not waiting until you blow.

GMJ: How do you measure improvement in subjective areas? How can you tell whether you're getting better at things like social situations or thinking creatively?

Dunning: That's a very good point, because social situations are subject to a lot of nuance. Those are inherently difficult areas to judge yourself, but even a little feedback can be tremendously helpful. And so even in these difficult situations -- and they are difficult, and people should just recognize that they're difficult -- getting outside feedback can still be very, very helpful.

Ninety-five times out of one hundred, seeking outside sources of feedback probably is going to be more helpful than confusing. Now, mind you, it's not going to work in all instances, but over the long term with a lot of people, it will be helpful. Even though it's stressful to go through, it can be some of the most useful information that we ever receive.

Nothing is ever going to be a panacea that works perfectly in all subjective circumstances. But we have things that can, even in the face of all that, make us better and make our situation better.

GMJ: How should you deal with someone who has gravely overestimated his or her own abilities and made a horrible mistake?

Dunning: Avoid something that can be read as a character attack. We're all prone to see a character attack -- that's a human tendency -- even if none is meant. You want to talk about the specific behavior, the specific consequences it created, and then point out, unless you're firing them, what they can do differently in the future. Suggest a way of improvement or a way of repair.

Some mistakes are so big that the person has to be fired; there's just no way around it. But if you're going to keep the person on, don't wander into character attack, especially if there's an angry undertone to your voice. I think the thing that you want to do is be concrete and behavioral as opposed to, "My God, you really screwed up big, didn't you?" That just won't do.

-- Interviewed by Jennifer Robison

My First Million: I am not a conformist

As i said in my earlier post, i wanted to post all the successful entrepreneur's stories for inspiration.

*Its a story of Grocery retail in India got a facelift, thanks to Subramanian, the man behind the Subhiksha chain.

AN opportunity to work as an investment banker with Citibank could have been anybody’s dream job, but this man gave it up to pursue his own ambitions. And definitely for the better. “I am grateful I didn’t have to work for a typical nine-to-six job for long,” says R Subramanian, the mastermind behind Subhiksha, India’s largest grocery and pharmacy retail chain.

 

An IIT-IIM graduate—and a topper of his batch—Subramanian barely worked with Citibank for a couple of weeks before realising that his passion lay elsewhere. The year was 1989. “I was always a conformist and wanted to do different things in life,” says this 41-year-old entrepreneur.
After Citibank, Subramanian joined Royal Enfield in Chennai as one of its general managers. However, that too couldn’t hold him back for long. Two years later he finally decided to venture out on his own. Hailing from a service background—his father was an officer in the Reserve Bank of India—entrepreneurship was an unusual choice for Subramanian. However, that did not deter him from treading into the world of business.
   Within a few months, he established his own outfit, Vishwapriya Financial Services and Securities that introduced IPO financing in in 1994. “While the question of capital grips several wouldbe entrepreneurs, I gathered an initial fund of Rs 50 lakh from angel investors,” he says. Launched with just two people, this Chennai-based company has today grown to be a Rs 250-crore entity with a headcount of 120 people across India.
   And that’s not all. Riding on the success of his first company, Subramanian decided to get into discount retailing. “In the mid-nineties, our finance business was doing well and we were planning to diversify. We studied two options, retail and software, and eventually zeroed in on the former,” he recalls. “I approached angel investors once again for an initial investment of Rs 50 lakh by the help of which I established my first outlet along with 10 people in a basement in Adyar, Chennai in 1997,” says Subramanian. Needless to mention, it became huge hit. Today, the chain has over 1,000 outlets nationally spread over 90 cities, with a turnover of Rs 2,300 crore.
   With Subhiksha, Subramanian changed the way groceries in India were sold. “We studied the Indian model of retail and combined it with the convenience of neigh bourhood retail with the benefit of discounts available from hypermarkets thereby creating a supply chain that could make the kirana operate cost efficiently,” he says.
   The model has been well received across the country, says Subramanian: “It gives me a huge kick to see that our model is not only being studied by management gurus here but is also being copied by global retailers who want to foray into the Indian market. Subramanian’s first million came in the first year of retailing operations in 1997. Now he has much grander plans. “We will continue to grow and be India‘s largest retailer in every segment,” he says, adding, “We plan to increase our presence in existing markets and selectively enter other markets as well.” However, the journey has not been all that simple. The biggest issue Subramanian says he faced was opposition to his pharma retail model from drug distribution cartels. “We sell medicines at a discounted rate of 10% and got into a spat with drug companies and distributors. However, the issue was resolved when we dragged them to court,” Subramanian reminisces.

Well, i wanna post all the great entrepreneur's successful stories...how they buit their business ventures and how these guy's earned their first Million Dollors...I'm sure this will be inspiring for anybody who has dream to become budding entrepreneur...put it like this who wanna be Millionaire..J

My First Million:  How Career Launcher spread his business

 

*Career Launcher is one of the reputed CAT coaching institute in India.

 

He first dropped education to pursue a career in cricket and then cricket to pursue education. “It was when I feared failing, I thought of securing my future by studying further,” says Career Launcher group chairman Satya Narayanan.

This self-effacing alumnus from IIM-Bangalore started his business from his New Delhi home with an initial investment of Rs 360, a table and four chairs for a classroom.

Hailing from a lower-middle class family, Narayanan did his initial education in Hyderabad, and then shifted to Meerut along with his family. “It was then that my father brought me a pair of slippers, as north India was known for chilly winters. I went barefoot to school in Hyderabad,” he reminisces.

When his family later shifted to Delhi, his passion for cricket took over and Narayanan dropped his Class 12 exams to participate in an under-15 cricket tournament. But soon enough, he realised that reaching the pinnacle of the game could be a very long and risky journey. Narayanan eventually took his class 12 exams and sailed through with 90% marks. That got him through St Stephen’s College in Delhi where he opted for a degree in computer science.

The next stop was IIM-Bangalore, where he was hired by pharmaceutical major Ranbaxy on campus. It was here that Narayanan’s interest in training began taking shape. “I used to find ways of getting into training. I realised that it was something that interests me and decided to start Career Launcher,” he says. He began with a post-CAT personality development programme (PDP), and found a helpful assistant in James, a student of DCAC College at Delhi University, who got posters and pamphlets for the programme printed and distributed.

Finally, in January 1995, Narayanan quit to start full time training of PDP batches from his home. The numbers began to swell and with 80 students enrolling into the programme, he approached his IIM and non-IIM friends for assistance. “Initially, they scoffed at the idea. But I finally convinced them to conduct classes in their flats. I used to buy them beer during weekends to compensate for the trouble they took for me,” says Narayanan.

Those days, mock-tests for CAT had just been started by St Stephen’s, SRCC, IIT and the Delhi college of Engineering. Narayanan proposed to these institutions a common mock CAT for Delhi students. This clicked, and 425 students took the common test in the first year. Thereafter, he also managed to convince other institutes across India for a national mock-test.

“We roped in a leading magazine and tied-up with a watch brand to give away watches to the top 25 test rankers. I also took into confidence bus drivers who delivered our material to smaller towns,” says Narayanan.

In the second year, close to 4,000 students across 22 cities took the mock-test and 300 students enrolled into his PDPs. “I made my first million in 1996. My friends and I went on a holiday to Nimrana, Alwar and Bharatpur Sanctuary. That was a remuneration to my friends for helping me so much,” he says.

Career Launcher is now a Rs 70-crore company with a presence in the US and the Middle East and an expanded portfolio including school, higher education and overseas test preparation services. And Narayanan is aiming higher too, “We are expecting a turnover of Rs 100 crore this fiscal,” he says.

9 Fun Things To Do In Developing Your Leadership
by Kenny Moore

For 15 years I lived in a monastic community as a Catholic priest. I now devote most of my time to Corporate America working on executive development, change management and organizational healing. Actually, the jobs have proven to be quite similar - except the pay is a lot better now.
Employee surveys increasingly confront executives with three major issues: nobody trusts; employees don't believe in senior management; and workers are too stressed out to care. Problems with trust, belief and caring. In my monastic days, we referred to this quandary as a crisis of Faith, Hope and Charity. I believe the problems confronting leaders today are more spiritual than fiscal.
It strikes me as a bit unfair to expect engineers and accountants to be masters of the spiritual domain. So here are nine fun ways to get you started.
1 - Become a better communicator by keeping your mouth shut.
Communication improves when you learn to be quiet and listen. This is no small task in a dominant business culture that says the ones that speak the most (and the loudest) win. The more effective leaders are the ones who can let go of their need to defend, explain and justify - and simply be present to the pain and imperfection in the company. It's only after employees have said all they wanted to say (or "emptied" themselves) that they become open to hear anything that you have to offer. I find it downright saintly to find a leader who has some comfort level with silence.
2 - Eat lunch in the cafeteria.
You can find out more about what's going on in your company by noshing with staff than by reissuing the Employee Survey. Just grab some cafeteria delicacy, plop yourself down at a table of co-workers, introduce yourself and say:0020                "So, how's things going?" Resist the executive temptation to correct, solve, judge and reinterpret. Employees feel affirmed when you ask for their opinion and actually make room for a response. While you will hear some plain old moaning, you will also hear about practices that are frustrating employees and hindering operational performance. In a short time, perhaps just by making a few calls, you'll be well on the road to eliminating some unproductive behaviors ... as well as improving employee trust and hope - two spiritual qualities that directly hit the bottom line.
3 - Send hand written cards.
Sit down and actually hand write a note to someone. Real pen; real paper - no E-mails. It's seldom done - and it's powerful. Spend the first 15 minutes of your day writing personal notes to people who are doing the right things. Saying thanks has become a lost art in the frenetic world of 24/7. It's a morale booster that costs pennies. You are not only responsible for the quantitative side of the business. You're also responsible for the qualitative piece. You're accountable for the "heart" of the company - its maintenance and healing. Valentine's Day has now become your domain. Use it by sending lots of Valentine cards; sign them "from someone who notices your good efforts."
4 - Say a Prayer.
The work of a leader is spiritual: building trust; inspiring staff; fostering creativity. You'd be foolish not to ask for all the help you can get - and prayer is a good way to start. Prayer can also improve that much needed executive skill: humility. It's often only after you've arrived in a leadership position that you realize that you're really not "in charge" of much. Success, both personal and corporate, is largely dependent on people and things outside your control. Humility is merely the willingness to recognize it. Prayer also gives you a chance to apologize. It helps to say, "I'm sorry" to the Gods for things you, your employees and company have done wrong in the quest to succeed. Who knows, maybe the reason the company's in a slump is because nobody's apologized to the Divine? As a leader, it's now part of your job.
5 - Meet with coworkers in their cubicles.
While you may be more comfortable having staff meet in your office, it's more valuable to leave and meet them where they are located. Leadership is not about your comfort, but that of employees. The rarefied air of the executive suite can become toxic. I also think of it as giving a sort of "home court advantage." An insightful leader meets people where they work, accepts them for their unique gifts. Also, the symbolic value of seeing you mingling with the troops improves trust. General Patton used this effectively and won many a battle by the loyalty his troops had for him.

Alter ego
6 - Spend quiet time with yourself.
A leader's value is determined both by whom she is as well as what she does. Spending time doing nothing increases your awareness and creativity. You become better able to respond rather than react. Being still, even for a few minutes each day, provides the foundation for becoming less operational and more strategic. You see the bigger issues, the underlying conflict, the creative approach that will take the organization to the next level. The Gods bestow the gift of wisdom, not in the maelstrom of activity, but in the silence within.
7 - Visit art museums.
Leadership is not only a science. It's also an art. What better way to develop this aspect than by spending time with the "masters?" Tell your staff that you'll be gone for the day. Remind them that they're in charge. Then take off and walk the corridors of your local museum. Even if you never took an art appreciation class, you can still amble among these solemn halls and ask yourself fun questions like: How can my organization be more creative? What can I do to reward more risk taking? What are some unmet needs that might expand the business? And, my favorite question, what would I do if I knew I wouldn't fail?
8- Increase tolerance for opinions that drive you wacky.
The future never arrives as you expect. Breakthroughs show up as irritating distractions to your defined business goals. Leaders with vision seek out discordant voices and surround themselves with people who challenge basic assumptions and traditional ways. Experiment with expanding your sense of humour so that you can play with those who see the world differently. Being able to question commonly accepted business practices and living with the ambiguity that this produces is the fertile ground for divine revelation.
9 - Work on the impossible.
One of the things I learned in the monastery was: just because something is impossible, doesn't mean you don't have to work on it. (Why else would I have been required to take the vow of celibacy?) Some of what a leader is required to work on will not be accomplished in his lifetime. That's what vision, brilliance and legacy are about. To those overwhelmed by this task, I give you the words of my old religious superior: if you think you're too small to be effective, then you've never been in bed with a mosquito. It is your task to explore and initiate impossible efforts that will serve the next generation. You have an executive responsibility to take politically incorrect stands in service of the long term corporate common good. Practicality and common sense be damned when it's clear what implausible work needs to be accomplished. The poet Theodore Roethke said it well: "What we need is more people who specialize in the impossible."
Worried that this will negatively impact your career? Don't. Since the work is "impossible" everybody will have very low expectations - so even making a little progress makes you look like a star. Likewise, because most of your peers will run headlong away from this challenge, you'll have little competition ... and the Gods just may come to your assistance giving you great surprise and success.
Finally, mixing God and mammon makes good business sense. Employees have many God given talents that they want to contribute, if someone would just lead the way. Thomas Aquinas, the medieval saint, once said: "Without work, it is impossible to have fun." The world of business is undergoing a radical transformation that is inviting the spiritual assets of the workforce into the hallowed halls of commerce.
Now go and do what any self-respecting leader should! Put yourself out in front of this transformation ... and take credit for starting it all. And be sure to have some fun while you're leading

 

 

IN DEFENSE OF MBAS Businessmen grouse about them, but the best ones have financial skills that corporations badly need.

 

Dumping on MBAs has become increasingly popular in recent years, both in the popular press and in specialized publications such as the Harvard Business Review. Newly minted MBAs, the critics say, are too ambitious, too impatient, and not worth the high salaries they command. I often hear similar complaints from senior managers and corporate directors. My short answer to these criticisms is that MBAs need no defense because their offense has been so successful. The marketplace has spoken: new MBA graduates with a few years' work experience command salaries as high as $70,000 a year, and even without on-the-job experience the top graduates from the premier business schools start at around $50,000. Consulting firms, investment banks, commercial banks, and large industrial companies presumably court these MBAs with such princely offers because their predecessors have proved to be worth it (and, presumably, because employers aren't really eager to find patient, unambitious young managers). My free-market orientation convinces me that this rebuttal is correct, yet the disappointment with MBAs is obvious and widespread. Why all the grousing from the managers paying these big salaries? I suspect that it arises from experience with the mediocre graduates who come out of even the best schools, and with the legion of MBAs churned out of lesser institutions. Some employees always prove disappointing, whether they have MBAs, B.A.s, or engineering or law degrees. But the smart students coming out of the top schools are equipped with new financial skills that can help any company improve its performance. How can employers monitor the quality of business education and identify the MBAs who deserve the accolades and the dollars? The easiest way is to stick with graduates of the schools that have been primarily responsible for disseminating the new learning in finance that has developed over the last two decades. By my lights, these schools are the University of Chicago, MIT's Sloan School, the University of Rochester, and UCLA. Moving strongly in this direction are Stanford, Wharton, Berkeley, Northwestern, Carnegie-Mellon, Columbia, New York University, and Harvard. The different ways that business schools train managers explain why MBAs are not created equal. Most business education falls into two broad categories. The first has a descriptive, institutional bent. Its purpose is to provide students with knowledge of current business practices, conventions, and -- though certainly not the intent of its proponents -- popular myths. This approach, which prevails at most state universities and many other schools, often is combined with an excessive reliance on the case study method pioneered at Harvard. Case studies, which force students to work through abbreviated versions of actual business situations, are designed to produce experienced decision makers. The exercise of making decisions under pressure is supposed to generate the best managerial talent, regardless (so it seems) of the validity of the reasoning underlying the decision. Business schools copied the case study method used in law schools, where it has long been extremely useful. In law schools, going to past cases means going to original sources, just as rigorous historians go to original documents. But, as Professor James Lorie of Chicago has pointed out, the use of cases in business education is little more than a vicarious and attenuated apprenticeship. And apprenticeship ceased long ago to be the predominant mode of education in almost all serious disciplines. By contrast, the second category of business education is fundamentally scientific in its methods. Known as the Chicago school or quantitative approach, it attempts to imbue the student with a valid theoretical understanding of business decisions -- not only of how such decisions usually are reached, which is where the institutional approach usually leaves off, but how they ought to be reached. The quantitative approach begins with the assumption that those business practices that have survived the test of time have good economic justifications. It then attempts to separate the real economic reasons from the popular myths. THIS APPROACH recognizes that before the student can adapt decision-making skills to specific, unforeseeable situations, he or she needs a solid grounding in such disciplines as economics, statistics, and accounting. The goal is to provide the student with a coherent body of objective, broadly applicable principles. Such principles are not based on ad hoc conclusions generated by a set of hand-picked cases or a collection of war stories passed down by successful veterans of the business world. They are the product of applied economic logic supported by empirical tests. Armed with scholarly studies subjecting masses of data to rigorous analysis, the student comes away with a reliable guide to how a variety of decisions can be expected to affect stock values. To illustrate the fundamental difference between the two approaches, consider one of my favorite managerial conundrums: what is the best dividend policy? Practitioners of the institutional approach usually impress upon their students the conventional wisdom that, given a fixed level of earnings, investors prefer that corporations distribute more of those earnings as dividends. All things being equal, higher payout ratios supposedly mean higher stock prices. After all, it doesn't take a financial wizard to determine that the market responds favorably to dividend increases and unfavorably to decreases. A business school with a scientific orientation approaches the question quite differently. First, the student reads a classic 1961 paper by Franco Modigliani of MIT and Merton H. Miller of Chicago putting forth the proposition that dividends are irrelevant to how the market values a stock. The student then reads an extensive body of empirical tests supporting that theory, and supporting the proposition that increases and decreases in dividends matter simply because they convey information about management's assessment of future earnings. Where does all this theory and evidence leave the future corporate decision maker? The purpose of the exercise is to foster a propensity to distinguish between financial illusion (in this case, the popular view that investors prefer dividends to capital gains) and market reality. After all this you might say, ''OK, Stern, this is well and good. But we need only one MBA to make your case, and we only deal with dividends in January. Should I hire just one and send him on vacation for the rest of the year?'' My answer is that, especially in finance, the kind of training pioneered at the University of Chicago has implications for a broad range of decisions. A revolution in the theory of corporate finance has been under way since the early 1960s. The study of finance, grounded in sound economic logic and bolstered by sophisticated statistical methods, has made steady progress toward achieving the predictive power of a hard science. Finance scholars are challenging much of the accounting-oriented intuition that continues to pass for the collective wisdom of Wall Street. Properly applied, the new insights can provide managers with a more sensible basis for setting corporate goals, evaluating divisions and subsidiaries, choosing among investment opportunities, pricing acquisitions and divestitures, structuring incentive compensation plans, finding the ideal capital structure, and communicating with the investment community. The modern theory of corporate finance is, at bottom, a change in the theory of valuation. To the extent that managers view their function as providing the maximum returns for stockholders, all financial decisions are grounded in some theory of capital-market pricing. How managers use the assets at their disposal and what they tell investors depend on their understanding of how the stock market works. The rise of modern finance theory has brought about a confrontation between two very different views of how the capital markets value securities. This, in turn, has given rise to two distinct philosophies of management. The traditional view holds that stock prices are determined primarily by reported earnings. Executives who subscribe to this ''accounting'' model of the firm see their goal as maximizing reported earnings per share. The rival view, the ''economic'' model, holds that the market value of any security is determined by the after-tax cash flows it provides. That is, the tricks that accountants can play with things such as inventory valuations don't really matter to the stock market unless they affect some real variable like taxes. According to this view, accounting profits offer a good measure of performance only insofar as they reflect real cash profits. When reported earnings differ significantly from cash flows, they distort performance and provide an unreliable guide to value. RESEARCH IN FINANCE and accounting has produced a large body of evidence attesting to the ability of the stock market to penetrate accounting fictions. The first implication, which business students schooled in the quantitative approach well understand, is that earnings per share don't count; cash flows count. The second implication is that public corporations should be run exactly as if they were private -- to maximize not earnings but cash flows. When a company properly communicates this approach to the market, the sophisticated investors whose assessments have the greatest influence on share prices take good care of the company's stock. The scientific revolution in finance is steadily winning converts in the corporate world. But much corporate practice still betrays the strong influence of accounting considerations and an unwillingness to believe what the market is saying. The prevalence of accounting-based management is the greatest challenge for the modern business school, and its greatest opportunity. The lessons of modern finance offer a great opportunity for managers to improve their service to shareholders. The MBAs who carry these lessons from the premier business schools into the next generation of senior management can be expected to provide great benefits for stockholders.

*  Originally this article was listed with  (FORTUNE Magazine) –written by   By JOEL M. STERN  

Jargon can sometimes get the better of common sense!

 

IN ACADEMIA, he was the man who could come up with an acronym for anything and everything under the sun, the moon, the stars, the galaxies and the not-so-Milky Ways. He was the ultimate matrix- master when it came to coining acronyms out of stale air. All of which earned him the directorship of the Indian Institute of Acronym Management, IIAM in short. “Gentlemen,” he told a bunch of students on their first day at IIAM, “the key to all success is BULLSHIT.” Nervous students thought they had heard it wrong, a front-bencher wondered whether he should score points for CP (class-participation) by guffawing and then decided to wait and see how it all went.
  “BULLSHIT,” the IIAM director elaborated, “is the latest in management education. The ‘B’ stands for baggage, the U for unlearning, the first L for learning, the second L for learning again, the S for strategy, the H for honing, the I and T for information technology. I and I alone have developed this matrix- model. What it means is that you first have to unlearn the baggage of the past, then learn from the present, learn from the future, then hone your strategy through information technology. That, gentlemen, is all it takes to become a SUCCESS.”
   The front-bencher beat the rest of the class in applauding this in-house IIAM directorial gem and the director mentally took note and decided to award him an A-plus for CP. “Wait, gentlemen,” he said, “Wait! SUCCESS stands for the following: S for strategy, U for unlearning, C for clarity, C for coherence, E for empathy, S for symbiosis and S for synergy. That, gentlemen, is my SUCCESS model for success in any and every sphere. I commend it to you and to posterity.” The director then took up a piece of chalk and asked the assembled class what it stood for. “Chalk,” said the front-bencher, “but I’m sure you know best, Sir.”
   The director beamed at his protege. “It’s not chalk but CHALK. The C stands for cogency, the H for honesty, the A for appropriate, the L for learning and the K for knowledge. The CHALK within you can be developed to promote your growth and the growth of whichever organisation is fortunate to employ you after I have taught you,” the director said. 

                                                   

                                            
   “Sir,” said the front-bencher, “If the rishis of yore had developed your felicity in communicating profound ideas with utmost simplicity, India would still have been a great nation and not just another Third World country.” The director smiled and said, “GREAT and not just great — G as in god-fearing, R as in rapport, E as in elucidation, A as in analysis and T as in telepathy.”
   This time, the students were too stunned to even react. Just then the bell rang and everyone got up to leave. “Where are you going,” the director asked a pretty young thing. “For a snack,” she replied. “S as in savoury, N as in nutritious, A as in appetising, C as in crunchy and K as in Canteen”

The important role of motivational books was cited by nearly all the comeback small business owners interviewed for "The Great Comeback." (At least one, Dave Ramsey, is a best-selling author himself.) To see what magic they unlock, My Business columnist Harvey King spent a weekend sampling some of the genre's best-known titles. Here is some of what he discovered:

If you think misery loves company, forget it. Misery loves the company of someone who's left misery far behind. At least that appears to be the secret of successful success books.

Together these books contain dozens of lists of steps, habits, guidelines and principles for reaching business and personal goals. Synthesized, their collective philosophy of fulfillment boils down to this Top 10 list of truths:

1. Despite your defeats, you are not defeated until you believe you are.

2. You are not lazy, you are uninspired.

3. Whether you think you are going to succeed or fail, you will.

4. Too many people with far greater limitations than you have proven wrong the reasons you accept for why you can't succeed.

5. Be honest and admit you know what you really want, then put that specific goal down in writing and develop a plan to achieve it.

6. Never forget your written goal. Each day, remind yourself of it and renew your commitment to it.

7. Anything worth having (or being or doing) will come only as the result of hard work, persistence, continuous learning and, likely, specialization.

8. Follow the Golden Rule (the real one, not: "He who has the gold, rules.")

9. Passion is the key to fulfillment. Other required traits are flexibility, confidence, optimism, commitment and persistence.

10. Start right now.

Despite their similarities, each book has a unique twist--a secret sauce that helps differentiate it from the sea of other books in the genre. Except for Who Moved My Cheese, the books are neatly divided into a series of lessons or essays easily read in daily chunks. (Cheese is so short, it's already a one-chunk--or slice--read.) Each book depends upon a unique metaphor demonstrating that success, achievement and fulfillment do not result from passivity, but require active journeys up steps, down highways or through mazes.

Each, in its own way, brings hope and inspires action. Each, in a strange and inexplicable way, seems based on the movie Rudy.

Seven Habits of Highly Effective People
Steven Covey
Simon & Schuster
(June, 1989), $25.00*

Who Moved My Cheese?
Johnson and Blanchard
Putnam Publishing Group
(September, 1998), $19.95*

See You at the Top
Zig Ziglar
Pelican Publishing Co
(June, 1982), $22.00*

Think and Grow Rich
Napoleon Hill
Renaissance Books
(October, 2001), $28.95*

What Should I Do With My Life?
Po Bronson
Random House
(December 24, 2002), $24.95*

*price of hardback edition

This article originally appeared in the April/May 2003 issue of My Business magazine.

 This is an article collected from here . it's very important for people who wanna go for Global MBA...

"DOES YOUR PAPER PROFILE LOOK LIKE EVERYBODY ELSE'S? STOP THINKING ABOUT YOURSELF IN TERMS OF STEREOTYPES AND START EMPHASISING YOUR UNIQUE TRAITS "

 

After Akshay Mansukhani scored a 710 on his GMAT, he knew he could retake it and get a 750 and climb to the 99th percentile. But to score a spot at Wharton (which last year had a median GMAT score of 710), he took the advice of a professor he had while a student at Wharton’s undergrad program and instead chose to spend his time perfecting the essay portion of his application. “The way the Indian education system is set up, grades mean everything,” says Mansukhani who graduated in 2004. “But applying to B-school is like building a house. Your scores are only one pillar, if it doesn’t have the other pillars it doesn’t stand up properly.”
          For international students like Mansukhani, being from a country where large numbers of students are also seeking a US B-school education can make it more difficult for your application to stand out from the pile in the admissions office, even with top-notch test scores. And it’s not just where you’re from, it’s also what you’ve done that can put you into the one-of-a-crowd category. In other words, it’s not that you’re not right for business school. For business schools seeking diversity in their classes, you’re too right. So—when you can’t change who you are—how do you make your application something more than just one of many? 

 

 

                         

 

Stop Stereotyping Yourself    

First of all, say the experts, stop stereotyping yourself. Obviously, with background and experience a large part of the application process, it’s important to realise that others have had similar experiences, says Thomas Caleel, Wharton’s director of admissions. But that’s just a starting point for building your own application personality. “Identifying with a (pool) is different from being in a pool,” Caleel adds.
Taking time to reflect on what you’ll say in the application essay can show that you’re not just following the pack, Caleel adds. “Once you really start to drill down on an individual, there are 20 pools that we can put you in,” he said, such as “where they’re from or what industry they’re working in or what company they’re working for.” In order to dig deeper, Caleel recommends examining the purposely vague essay questions and using them as a vehicle to cover various facets of your life including hobbies, personal experiences, leadership roles, and favourite activities. Coming across as genuine in essays is vital. And officials agree that the main reason applicants get rejected is because the application is based on what they perceive admissions people want to hear instead of being truly authentic.
   
Mixing Up the Essay    

Those inside admissions offices at top B-schools acknowledge that while potential students are all held to the highest standards, applications are looked at on an individual basis. “If we get an entrepreneur from Kenya, his application is going to be less polished then a McKinsey consultant from New York,” says Caleel, adding that this way of considering applications gives an opportunity to assemble a diverse entering class.
   Admissions consultant Jeremy Shinewald, the founder of MBA Mission, is straightforward, warning his clients that they’re in a “high-risk group that faces strong competition, either because of ethnicity, country of origin, or work history. To demonstrate individuality, Shinewald recommends writing the essay out of chronological order by skipping the traditional introduction. “A lot of people can write, ‘When I started as an analyst at Morgan Stanley,’” says Shinewald. “If you were to say, arriving in Minneapolis, I rushed to meet the CFO of Best Buy,’ it’s a much more gripping way of introducing yourself.”
But having a career similar to other B-school applicants can also have its upside. If you’re applying from an area of business that’s heavily represented in b-schools, chances are your higher-ups will often have an MBA. Matt Milanovich, a first year at North western’s Kellogg and a former consultant, took advantage of these available resources before applying.

 

Connect With People, Not Web Sites    

After starting on his application, Milanovich asked co-workers who already had MBAs to answer his questions and help walk him through the process. He also managed to get recommendations from managers. “As a consultant you want to make the most of the contacts that you have,” says Milanovich who had four years of work experience.
   If your previous career doesn’t provide such resources, giving your interview and application an insider slant by learning about the school could help. Tina Mabley, the director of admissions at the University of Texas at Austin McCombs School of Business, recommends checking in with student volunteers, meeting alumni, or visiting the school.
   It will automatically give you a better understanding of the school and prevent you from using the “three marketing slogans available on the Web site,” she adds. But Mabley warns that using information about the school is different from sounding too rehearsed and simply repeating information.
   
More Than Grades and Scores    

University of Arizona Eller School of Management student Greg Goodman knew he needed to somehow stand out as something more than just another white male applying to the school. He focused on his experience as an officer in the military and how he would bring armed forces leadership skills to the B-school environment. He also chose to write the optional scholarship essay to show the admissions team that he was a serious applicant—and got a 50% reduction in tuition.
   While high GMAT scores tend to speak for themselves, the rest of an application should convey who you are and what you’ll be like as a student. Deena Maerowitz, a senior admissions consultant with Clear-Admit, a private admissions consulting firm, agrees that especially for students who fall into a very crowded pool of similar candidates, numbers alone don’t cut it.—BW

This is really great...from HP guys....somuch inspirational....yes, indeed..it gives me somuch motivation...i'm sure oneday i'll become entreprenuer..:)

 

HP  the Pioneer in IT reveloution's Saga....goes like this.....

 

The Early Years of Technology Giants Hewlett and Packard:

 

“Here we were with about $500 in capital trying whatever someone thought we might be able to do,” recalled Bill Hewlett. “So we got into this thing not by design but because it worked out that way.”

Hewlett and his fellow Stanford pal, Dave Packard, might not have planned for their success, but the two friends would go on to create what is today the largest information technology company in the world. From their days tinkering with gadgets in Packard’s one-car garage, to becoming two of the founding fathers of Silicon Valley, Hewlett and Packard have left a company – and a legacy – that has stood the test of time.

William Redington Hewlett was born on May 20, 1913 in Ann Arbor, Michigan. The family relocated to San Francisco when he was three years old. While attending Lowell High School, Hewlett’s father died of a brain tumor. After the tragic event, Hewlett decided to enroll in Stanford University to study electrical engineering. “I'd always been interested in scientific things, but my father – who died when I was 12 – was a greatly beloved doctor, and I did not want to compete with his image,” recalled Hewlett, “so instead of getting interested in medicine I invested a lot of hours disassembling door locks and things like that. My mother just called it mischief.”
Hewlett would receive his Bachelor’s degree in 1934, and follow that up with a Master’s degree from MIT in 1936 and another Electrical Engineer degree from Stanford in 1949.

David Packard was born on September 7, 1912 in Pueblo, Colorado to a lawyer father and high school teacher mother. “I remember that while quite young I got a thrill from looking at pictures of railroads, bridges, motors, generators, and other mechanical and electrical equipment,” said Packard. “I tried to simulate some of these devices with small-scale models in our backyard.”

Following high school, Packard decided to move to San Francisco and pursue a degree in electrical engineering from Stanford. It was there that he would meet Bill Hewlett. Both students were studying under Frederick Terman, a pioneer in the field of radio engineering. After noticing how much the two had in common, Terman encouraged them to go into business together and start an electronics company.

“When I talked to business schools occasionally, the professor of management is devastated when I say we didn’t have any plans when we started,” said Hewlett. They did not have a plan, nor did they have much money – just $538 to their names. But with that, and Packard’s one-car garage, they figured they had enough to get going. Hewlett rented a cottage behind Packard’s house and the two began working away in the garage.

The two college buddies did not have a specific plan, but they envisioned creating a global company from day one. Today, that garage – now called the birthplace of Silicon Valley – is a California state historical landmark which hints at the things that were to come.

Taking the Garage Global: HP Steps it Up

 

As soon as Hewlett and Packard began working away in their garage, they decided to create a set of rules to live by. Rule number one was “Believe you can change the world.”

Hewlett and Packard now had their company, they had a lab of sorts to work from, and they had the inspiration to achieve big things. What they did not have was a product. And so, Hewlett went back to look at his graduate thesis from Stanford. It focused on practical applications for electrical engineering technology of negative feedback, and it would be the inspiration for HP’s first product.

Together, Hewlett and Packard created an audio oscillator. It was in fact the first practical, low-cost method of generating high-quality audio frequencies that were needed in a wide range of industries, including defense and medicine. Hoping to impress the idea that the company had been around for awhile, they named their product 200A. “We really didn't know if this oscillator was any good,” said Hewlett. “We simply put one together that worked pretty well, sent a letter out to universities and others, got three or four orders, and tried it again.”

One of those first orders was from Walt Disney Studios, who wanted eight oscillators for their upcoming movie, “Fantasia.” From there, the two patented their product and began working on the next one. Because of the success of 200A, each subsequent and improved version would take on the suffixes ‘B’ through ‘E’.

In 1940, the two were finally able to move from their garage to a rented office building in Palo Alto, California. They expanded their line of products to include signal generators, voltmeters, oscilloscopes, counters, and more. While Hewlett provided many of the company’s early technical innovations, Packard easily took on the role of administrator. Soon, they had moved on to producing calculators, computers and printers.

Over the next few decades, with Hewlett and Packard still at the helm, the company continued to innovate and expand. A partnership with Sony and Yokogawa Electric in Japan, as well as a small spin-off company called Dymec, did not prove too successful and both were eventually brought back into HP. But a number of the company’s products would be revolutionary, including the HP 800 and HP 250 series of computers, which were nearly a decade ahead of the PC. In fact, Wired magazine called the HP 9100A the world’s first PC. HP was also responsible for the world’s first handheld scientific electronic calculator.

From 1947 to 1964, Packard served as the company’s president. After that, he became chairman of the board for various years until 1993. Three years after he left HP behind for good, Packard passed away. By the time of his death, his stake in the company was more than $1 billion. Meanwhile, Hewlett served as the company’s president from 1964 to 1977, as well as CEO from 1968 until 1978. He then served as vice chairman of the board until 1987.

Today, HP continues to reign as the world’s leading IT superpower. With a reputation for innovative and reliable products, it now earns revenues in excess of $104 billion.