David Jacobson's External Insights

Deciding priorities for 2006

It's often very easy to mistake self-organisation (tidying up your office, updating contacts and diary, archiving completed files, throwing out old  articles) for productive work.

Whilst it's great to set aside some time each week for these activities (or to catch up after times of frantic activity), unless these activities are related to your main business objectives, you have been distracted from your real goal and lost an opportunity.

Don't get me wrong: it's good to regularly look at what you do and ask yourself (and others) how can I do my job better? But unless you're following through on a system (say to build a knowledge bank or to automate a regular process), most often you're time wasting.

Stephen Covey talks about this at a personal level in terms of putting First Things First. (He also talks about putting the big rocks into your life bucket before the small ones, otherwise they won't fit in.)

So my resolution for 2006 is to go back to basics: do the important things first. First thing is to resolve what's the most important.

UPDATE: From Good and Bad Procrastination:"There are three variants of procrastination, depending on what you do instead of working on something: you could work on (a) nothing, (b) something less important, or (c) something more important.  That last type, I'd argue, is good procrastination."

Microcredit: building entrepreneurs from basics

Evelyn Rodriguez's post today from Koh Jum in Thailand during the Tsunami Disaster Remembrance Week ("Teach Him To Fish") is a reminder that giving someone the resources to use their skills can be a more effective and sustainable gift than things which may look impressive but cannot be used (eg a huge generator in a village which does not have the facilities to support it).

Which reminds me that that 2005 has been the International Year of Microcredit.

Microcredit is the making of very small loans (say from from $10 to $500) to unemployed persons who could not get a loan from a traditional bank without evidence of income or security. In developing countries it has successfully enabled extremely impoverished people (mostly women) to engage in self-employment projects that allow them to generate an income.

The most prominent example of microcredit is the Grameen Bank in Bangladesh (their slogan is "banking for the poor").

And co-operatives which have existed since the nineteenth century are still active today.

What CEO's are talking about

According to McKinsey these are the themes that have preoccupied senior executives, government officials, and other people concerned with business and public policy over the past year: the continuing emergence of Asia; offshoring management, economics, and policies; growth in the world's biggest companies; energy prices and supply; and the impact of aging populations.

Read McKinsey Quarterly articles on these topics

Kerry Packer

The announcement of the death of Kerry Packer today makes you think about how certain people have "larger than life" reputations.

As Australia's wealthiest person (AUD$7 billion) he was recognised as a person of power who was prepared to use his influence. His interests included the Nine television network and numerous magazines and sporting and gambling interests.

Notwithstanding his poor health (he survived a heart attack and a kidney transplant) when he appeared publicly (which was infrequent) he was forceful and self-confident.

Here's a quote from a 1999 ABC Media Report on media ownership:

an amusing quote from the ABA's cross-examination of Kerry Packer. You may remember it was Kerry Packer who flattened his questioners with replies at a Senate Committee hearing in 1991. It seems he was true to form during his behind-closed-doors testimony to the ABA. When asked how it was he was in hospital one day for an operation and off to the United States the next, he replied, 'Operations don't worry me a lot. That may sound strange to you, but I've had a lot of them and I believe I'm bulletproof.'

His son James is expected to continue his day to day control of the family's business interests.

Wikipedia entry

UPDATE: Crikey comments

Corporate blogging

If you run a business and are looking at different ways of getting your marketing message out and communicating with existing and potential customers, consider a blog.

As it is the holiday season, if you have a broadband connection spend a few minutes watching the video of presentations at the recent Lewis Industry Forum by Loic Le Meur, EVP of SixApart and Dr Jo Twist, technology correspondent for BBC Online, where they spoke about the impact of blogging on corporate reputations and on the way the media operates .

Le Meur gives some interesting case studies of the good and bad of blogging and emphasises the importance of conversations and collaboration through blogging. He notes the importance of keeping confidential things confidential and also in not assuming what blog readers will find interesting.

Jo Twist makes it clear that blogs are an important source of news for her as a journalist. She reads blogs to get the latest news and comments on issues from politics and business to disasters to oddities (she uses Bloglines to aggregate the RSS feeds of 122 blogs) . She emphasises the role of journalists as fact checkers: by interviewing people, taking photos and adding value to stories which may have first been mentioned in a blog. She emphasises that the role of journalists (at least those at the BBC) is to be accurate, not necessarily the quickest or first.

If you're a business wondering what blogs are all about, listen to these talks.

Using contracts to strengthen business relationships

In this post I mentioned Constance Bagley's new book Winning Legally: How to Use the Law to Create Value, Marshal Resources, and Manage Risk.

HBS has now published an excerpt on the topic of  using the contract negotiation process to strengthen relationships.

Some key quotes:

Although some argue that contracting can signal distrust and encourage opportunistic behavior, researchers have found that "clearly articulated contractual terms, remedies, and processes of dispute resolution" can complement trust-building behavior, such as flexibility, bilateralism, and repeated exchanges."...

The parties negotiating a contract should make every effort to be as clear as possible about their expectations. Slipping in a provision the manager knows would be unacceptable to the other side if it were pointed out is simply an invitation for a lawsuit. Instead of phrasing provisions that are unlikely to be well received in complicated jargon and burying them in lengthy drafts circulated to the entire working group, managers should instruct their lawyers to explain the provisions in understandable terms to the counterparty and their counsel and attempt to reach an agreement before circulating the drafts to the entire working group. It is far preferable to hash out any ambiguities at the negotiation stage while the parties are on good terms and in the mood to make a deal. Positions tend to polarize once the agreement is signed and a dispute arises.

NAB CEO contract

In June I posted a note about trends in Australian CEO contract terms . I observed that there was a preference for rolling contracts over fixed term contracts particularly for incumbent employees.

National Australia Bank has now announced that its CEO's current fixed term contract due to expire in February 2007  will be replaced by a rolling contract from February 2006.

His remuneration will be a mix of a fixed base salary and short term and long term incentives.

The termination provisions are critical for rolling contracts. In this case the provisions are as follows:

"Mr Stewart may resign by giving six months' notice.  If he gives notice within the first two years all performance rights and options will lapse and all restricted securities will be forfeited.  If Mr Stewart resigns after two years then, with approval from the Board, Mr Stewart will retain performance rights and options on a pro-rata basis taking into account his service  over the 3 year performance period.  These securities will remain subject to the original terms and performance hurdles.  In this instance Mr Stewart would retain all of the restricted shares.  The National may terminate Mr Stewart's employment by giving six months' notice.  The termination payment is equivalent to 12 months' fixed remuneration.  In this event Mr Stewart would retain all of his performance options, performance rights and restricted securities."

Creating long term business-adviser relationships

At the beginning of this year I posted a note  on how businesses could get more out of their external lawyers.  That note focussed on how businesses and their lawyers could use technology to achieve  a better relationship through sharing of information and collaboration.

I have just read an article by David Maister ,a professional service firm consultant, titled Do You Really Want Relationships?  which discusses the difficulty on the one hand in moving professional service firms generally (not just lawyers) from acting as experts to acting as advisers and the caution on the other hand shown by businesses in developing relationships with external firms .

If you are a business do you see your professional service firm as your enemy or someone you have a profitable long-term relationship with?

Some key quotes:

"many people have built their past success on having a transactional view of their clients, not a relationship one, and it is not clear that they really want to change. Stated bluntly, professionals say that they want the benefits of romance, yet they still act in ways that suggest that what they are really interested in is a one-night stand. ..

Most professional-to-client interactions involve little if any commitment to each other beyond the current deal. The prevailing principle is “buyer beware.” Mutual guardedness and suspicion exist, and the interaction is full of negotiation, bargaining, and adversarial activity. Both sides focus on the terms, conditions, and costs of temporary contact. Each side treats THEM as “different,” as “other.”

This is the way many professionals and their clients want it to be. They want a transaction, and may not yet (if ever) be ready for relationships. Rather than acting to build relationships, both sides might initially have the brakes on...

Although it is not an identical concept, the difference between transactions and relationships is similar to the distinction between being an expert to one’s client versus being an advisor.

An expert’s job is to be right—to solve the client’s problems through the application of technical and professional skill. In order to do this, the expert takes responsibility for the work away from the client and acts as if he or she is “in charge” until the project is done.

The advisor behaves differently. Rather than being in the right, the advisor’s job is to be helpful, providing guidance, input, and counseling to the client’s own thought and decision-making processes. The client retains control and responsibility at all times; the advisor’s role is subordinate to this, not that of a prime mover....

Relationships can be scary, particularly if they rush too quickly into creating obligations that neither side is yet ready to accept. Both client and provider may be reluctant to commit to each other for future activity until significant experience with each other is developed."

Whether you are a professional service firm or a business that uses one, read the whole article and think about  the issues it raises.

UPDATE 13 December: HBS Working Knowledge  has an interview with Constance Bagley the author of Winning Legally: How to Use the Law to Create Value, Marshal Resources, and Manage Risk.

Finding things

As more and more information is stored on our computers how do we find what we need?

Do we  use new methods of naming folders and files or just use better desktop searching tools or document management software?

The University of Washington Information School is conducting a Research Project called Keeping Found Things Found. The Project website contains ideas on labelling and organising information and retrieving it.

Peter Drucker tributes

Peter Drucker's recent death has prompted many tributes including these from The Economist and the NY Times. Forbes has a 2004 interview.

He created the concept of knowledge workers and was a leading thinker and writer on "what is the purpose of business?" and leadership.

McKinsey  has put together a collection  of articles on knowledge workers.

UPDATE: Google's Ten Golden Rules for managing knowledge workers