Leaders In London

“American Airlines saved $40,000 in 1987 by eliminating one olive from each salad served in first class.”

I’ve heard that story so many times, I kind of doubt it’s true. But the principle is sound at any rate. It’s the leadership challenge facing most of us at the moment: how to cut costs without affecting quality. So, how do you get your people to identify a whole load of ‘olives’ – a simple change in purchasing or in operations that will save money without affecting service quality?

1. Share the American Airlines story with your management team.

2. Task each one of them with cascading the story down through the ranks, explaining to people that their task is to ‘bring me an olive’ – a proposed cost-saving that will have no impact on customer quality.

3. Ask the management team to each bring you back at least one ‘olive’ idea by the end of the week. Or, if you prefer to let them run it, do so, and ask them to let you know how it’s working. Adapt the exercise to how you prefer to lead.

Maybe recognize and reward the best ideas and act on them. If it works for you, make this a weekly exercise and keep a tab on the accumulated savings.

It’s not just small beer (or olives). See below on how Mike Abrashoff got his front line to make suggestions for savings and saved 25% of his annual budget.

PS There are of course, limits to this approach, so it’s only one string to your bow. As the business guru Tom Peters, who spoke at Leaders in London two years ago likes to say, “You can’t de-olive your way to greatness!”

Wise words from Michael McKinney over in the Leading Blog:

Results are achieved by exploiting opportunities not solving problems.

“Solving problems can only return the organization to its prior status quo. To achieve results managers must exploit opportunities. However, in most organizations, its best people spend too much time putting out fires rather than searching for new opportunities than can become tomorrow’s cash cows.”

Source: Inside Drucker’s Brain (Peter Drucker, that is) by Jeffrey A. Krames. Hat tip to Michael McKinney who adds some advice from a previous Leaders in London speaker, Tom Peters, on how to lead in turbulent times, in the Leading Blog on the Leadership Now website

This is a provocative post just to get you thinking differently on a Tuesday morning…

There’s a new economics of capitalism. It’s been emerging for a while, but the clearing away of the weird world of financial derivatives that looked like the new capitalism - but has turned out not to be - has cleared the air.

Investment banks are almost no more (their financial model, it seems, doesn’t work…yet was seen as the engine of capitalism until a year or so ago).

So, let’s do what leaders are supposed to do, and look away from the slow motion car crash that is transfixing us all, and look to the edges to see what’s emerging.

And here it is. Here’s the one surprising thing that is moving to the heart of economic thinking. Here’s what Kofi Annan, who spoke at Leaders in London last year, calls “the single highest returning social investment in the world today”.

It’s what drives the success of GrameenBank and the other pioneers of the multi-billion dollar microlending form of new banking that is thriving while largescale investment banking is disappearing as a business model. Muhammad Yunus, founder of GrameenBank, who was granted the Nobel Prize for making it work, is coming to Leaders in London to help us define the new economics.

‘ It’ could be the mythical lever big enough to move the world (”Give me a lever big enough and…”) out of poverty. And, as economists have noted resoundingly recently, move Africa in particular out of poverty to become self-sustaining and capitalism has a Continent-sized new engine.

Tom Peters, another of our past Leaders in London speakers, has for long plugged away on a variant of this insight, pointing out that the second biggest economy in the world by size of purchasing power after the US isn’t China, it’s….women. (See what he did there? ‘Reframing’, our NLP-er friends call it: leaders see differently; that’s where insight comes from).
The actual lever, that is most likely to have the most positive effect on the world economy, according to Annan and economists who back him up on this, is educating women.

The Financial Times says today that women’s education has moved from ’sandal-wearing’ fringe issue to the heart of economic thinking.

GrameenBank only lends to women, because they pay back, whereas their husbands don’t. Female education is the variable most highly correlated with improvements in social factors. Women typically spend their income on food and healthcare for their children, leading to an upward spiral of health and wealth.

Move on to the wider issue of women as consumers and Tom Peters has an eye-opening set of slides he goes through that shows that in the US, women are the decision-makers on buying almost everything, including ride-on mowers, the ultimate in boys’ toys.

In what way is this mainstream or linked to your leadership agenda? Well, it takes an investment bank to notice it first, oddly. In March, Goldman Sachs said it would invest $100m in 10,000 women from developing countries to improve their access to entrepreneurial education. They can see a return on investment by thinking differently. Can you? (PS Interesting to see if they are still making that investment or if they have changed their minds as $100 m suddenly became real money that they might not have available…)

There’s more here:
FT on the impact of developing developing women on world economics

And here’s Tom Peters $5 booklet ‘Women Roar’, which starts off with this rant from Tom: “The evidence is clear!
(1) WOMEN ARE BETTER LEADERS THAN MEN (under the conditions of the New Economy).
(2) WOMEN ARE THE WORLD’S BIGGEST MARKET OPPORTUNITY (BY FAR) … and are wildly underserved. The stakes amount to TRILLIONS of dollars. Our story: WOMEN ROAR. WOMEN RULE. Believe it!”

Tom Peters’ 26 Rules for Leading in a Downturn…

…which you can find in full here, include these wise words from Peters, who interviewed Larry Bossidy on stage for us at Leaders in London.

”
*Take advantage of others’ timidity; tighten the belt with a mighty tug, but in a key area or two, double the strategic project budget rather than halve it.

*Painful decisions must be made—make them as gracefully as possible; doing so is the best investment in the long term possible. Your reputation will be shaped by the long memory of how you behaved when the fan was covered with yogurt.

*Tough decisions mostly affect other people’s families. You must still make the tough decisions, but the minute they cease to be agonizing, resign—you’re not worth saving.

*Character rules in adverse times.

*Now is when investment in relationships pays off—and now is when you pay the full price of not having invested in relationships when times were good and you didn’t “need to be nice” to others.

*Keep good people—if it kills you.

[Don’t mess with your franchise players. Nurture them as never before.]

*Practice transparency to a fault.

[People in the know—from receptionist to EVP—are far more likely to be positively engaged and supportive during a nasty downturn. “In the know” means “the works,” not just a few breadcrumbs of sanitized info.]

Remember the Four Ps of Marketing? As part of his 100 Ways To Succeed series of occasional posts, past Leaders in London speakerTom Peters lists The Boss’s 6 Ps as:

Passion!
Persistence!
Partners!
Performance!
Painstaking!
Presence!

The actual Boss he is talking about, from whom he suggests all bosses should learn, is Bruce Springsteen, whom Peters had just seen in concert, which is what inspired him to pull together his Six Ps.

We hear so many tails of failed bankers, in their dual role as perpetrators and victims of the credit crunch (’the biter bit’ we used to say in journalism) - apart from Banco Santander, just voted best bank in the world by Euromoney and largely untouched by the crunch: kudos to them - that we should pause and remind ourselves of the banker who had Tom Peters dancing around the room at 6 in the morning.

Tom, a past speaker at Leaders in London, of course, said this on his blog when Muhammad Yunus and his GrameenBank won the Nobel Prize:

“I danced around the kitchen! Though alone at 6 a.m., I pumped my arms skyward again and again! ‘Yes! Yes! Yes!’…

“I stumbled across Yunus & Grameen about 5 years ago. I went bananas! The story, of course, is amazing. Moreover, it dovetails with all of my Primary Biases…

I poured over Yunus’ book, Banker to the Poor; and also became immersed in David Bornstein’s The Price of a Dream: The Story of the Grameen Bank (University of Chicago Press). As usual, I put together a wee slide show, which we include here (NB Goes to the post on Tom Peters’ site, where you can download the Powerpoint) as it was in 2001 (with slight 2006 additions).

Glory Hallelujah!!

Yes!
Yes!
Yes!”

Phew! you can see how he energises a room, can’t you. I look forward to seeing him back at Leaders in London some time in the future. In the meantime, Muhammad Yunus himself will be with us at Leaders in London 2008. You can find out more and download the brochure on the link below.

Posted on behalf of
Leaders in London
by
Phil Dourado