MANAGEMENT is efficiency in climbing the ladder of success; LEADERSHIP determines whether the ladder is leaning against the right wall - Stephen Covey

Thursday, December 29, 2005

Creative Accounting

Creative Accounting refers to accounting practices that deviate from standard accounting practices (GAAP, FRS, AS etc...) and are characterized by excessive complication and the use of novel ways of characterizing income, assets or liabilities....well, am glad you realized there is no need to have a novel way to account for expenses...everyone gets novel (sometimes overboard!) once in a while to account for expenses (whether incurred or not!). Many a times, the words "innovative" or "aggressive" are used as a surrogate for "creative"...its just a jargon - who cares!

The fact of the matter is that by using such creative accounting practices, many organizations (am constrained by character count to name all of em'!) have been subject to accounting scandals & other fraudulent "innovative" mis-adventures that had ultimately led to its own dwindling (apart from swindling!). One must understand that because of such several dismal events, the accounting & auditing fraternity were put to humiliation, mortification and severe embarrassment, though the fault doesn’t fully lie with accountants…well, am not here to play the blame-game but we must understand that it is the responsibility of the management of a company to prepare its books of account as per the generally accepted accounting principles & conventions and the auditor (accountant) is supposed to express an independent opinion (qualified or otherwise!) on the accounts prepared by the company’s management. Again, to qualify or not is another matter altogether….it again depends on so many things right from auditor independence, client relationship, fee-hike, new business proposition, consulting services & other non-audit services et al.

To conclude, I feel that both companies and accountants must understand the repercussions of creative accounting practices and ensure that accounting doesn’t actually get too creative to count beans behind bars!

Wednesday, December 21, 2005

Merry Christmas & Happy New Year

Wishing you all a Merry Christmas & Happy New Year.
Thoughts for 2006...
> You don't get to choose how you're going to die. Or when. You can only decide how you're going to live. Now. - Joan Baez
> Everyone is kneaded out of the same dough but not baked in the same oven. - Yiddish Proverb
> The real voyage of discovery consists not in seeing new landscapes but in having new eyes. -Proust
> Let everyone sweep in front of his own door, and the whole world will be clean. - Goethe
> I offer you peace. I offer you love. I offer you friendship. I see your beauty. I hear your need. I feel your feelings. My wisdom flows from the Highest Source. I salute that Source in you. Let us work together for unity and love. - Gandhi's Prayer For Peace
> There is more hunger for love and appreciation in this world than for bread. - Mother Teresa

Education & Entrepreneurship!

Many a times I have felt that entrepreneurship CANNOT BE taught in B-Schools the way it is meant to be practiced in the REAL WORLD! Its more of an Art than Science and hence can be excelled (seldom perfected!) over a period of time. However, the spirit of entrepreneurship, best practices, real-world case-studies, management games, entrepreneurial simulation et al COULD BE taught (whether relevant or not to the real world!) in B-Schools…well, the beauty is that when all of these (and much more!) could be learnt in the corporate world, people pay a fortune to learn these thingz @ B-Schools and end up with a mid-life crisis!! I love the quote “I was born intelligent, education ruined me!” and I think its true because to the best of my knowledge, till date, not many successful entrepreneurs have had fabulous education (In fact, many of them have quit their Ivy League education to make a dent in the universe!). However, they ended up making a truckload of reserves & heaps of fortune (technically called WEALTH CREATION!). I guess education & entrepreneurship is inversely propotional! What have you got to say??

Tuesday, December 20, 2005

Management lingo for the millenium!

I recently read this at a website and therefore wanted to share it with the ROW (Rest of the World)...
BLAMESTORMING: Sitting around in a group, discussing why a deadline was missed or a project failed, and who was responsible.
SEAGULL MANAGER: A manager, who flies in, makes a lot of noise, craps on everything, and then leaves.
CHAINSAW CONSULTANT: An outside expert brought in to reduce the employee headcount, leaving the top brass with clean hands.
CUBE FARM: An office filled with cubicles.
TOURISTS: People who take training classes just to get a vacation from their jobs. "We had three serious workers in the office; the rest were just tourists."
XEROX SUBSIDY: Euphemism for swiping free photocopies from one's workplace.
PERCUSSIVE MAINTENANCE: The fine art of whacking the heck out of an electronic device to get it to work again.
ASSMOSIS: The process by which some people seem to absorb success and advancement by kissing up to the boss rather than working hard.
FLIGHT RISK: Used to describe employees who are suspected of planning to leave a company or department soon.
UNINSTALLED: Euphemism for being fired. Heard on the voicemail of a vice president at a downsizing computer firm: "You have reached the number of an Uninstalled Vice President. Please dial our main number and ask the operator for assistance. *(Syn: decruitment)
CLM (Career Limiting Move): Used among micro serfs to describe ill-advised activity for eg: trashing your boss while he or she is within earshot is a serious CLM.
Well, the above may be put to practice at your own risk!

Beyond Numbers!

Many of you may think that being finance professional, it would be a peccadillo (colloquially known as "sin") for me to scribe something like this but the reality lies in accepting and agreeing to the fact that there is so much more for finance professionals than just mere numbers (number crunching!) to an organization. Many a times KPI (Key Performance Indicators) usually represent financial measures ignoring the "important" non-financial crunch – which I feel is an equally essential sauce (remember…..its all in the sauce!). I strongly believe that organizations (both profit & not-for-profit sector) should adopt a more holistic approach to performance measurement & management wherein KPIs include non-financial performance measures like customer dissatisfaction, ethical trading, supplier relationships, people / employee satisfaction index, workforce diversity, environmental parameters, community contributions, major incident rate, total waste & recycling rates etc…

Today, I feel there is a shift (not too sure whether it’s a quantum shift!) from treating financial measures as the foundation for performance measures, to being only one of several measures used by corporates to evaluate their performance. There is also a possibility that staff (many-a-times) play sport (does it reflect their sportiveness or lack of it??) to maximize financial measures rendering the whole performance evaluation exercise futile. Companies worldwide are transforming themselves for a world where competition is based more on information, and on ability to exploit intangible assets, than on their ability to invest in, and manage, tangible assets. Concept of Balanced Scorecard (Robert Kaplan & David Norton) was introduced to complement financial measures with those related to: customers; internal business processes; and learning. Many corporates have used this as cornerstone of a new strategic performance management system. Well, the key point is to discover how human, organizational and intellectual assets combine in creating VALUE.

Monday, December 19, 2005

Management - Art or Science?

I have wondered many a times as to whether Management is an art or science and haven't found an exact answer to this question...well is there any ONE answer??? NO! There is no 'yes or no' answer to this question (I bet this can't be a box-ticking exercise!).

Management as an Art is a practice that has been followed for ages (donkey’s years!) by many noble-beings (were they called managers in the early era??) and has been unremitting since then...maybe the style has changed but the objective hasn't. Being an art, its practice to perfection was one of the most essential feature (sine-qua-non) that everyone was looking at. However, due to efflux of time, many realized that it wasn't important to be perfect BUT necessary to be excellent. If you aren't excellent, u better take a jump!

Management as a Science always had (and continues to have) a 'Cause & Effect' relationship that has been practiced (did I say preached?) for time immemorial (well, still being very well practiced and preached in many companies!) inorder to enable people to perform better (hopefully!) and understand the quantification (many-a-times distorted!) behind their performance. I guess, time has come for us to realize the importance of management BOTH as an art and science and to appreciate its co-existence within an organization. I truly believe that it is in the best interest of the organization to have a mix of both (art & science) in right proportions and at the right stage of the organizations' cycle inorder to derive immense benefits from the use of managerial tools, techniques, practices, philosophies, processes & disciplines AND at the same time KISS (Keep It Simple Stupid!).

Saturday, December 17, 2005

WTO in HK - An update

The World Trade Organisation's biennial ministerial conference got under way in Hong Kong, amid protests and scuffles with the police. In general, ministerial conferences are the WTO’s highest decision-making body, meeting at least once every two years and providing political direction for the organization. This sixth conference will be vital for enabling the four-year-old Doha Development Agenda negotiations to move forward sufficiently to conclude the Round in 2006.
This year, thousands of demonstrators from more than a dozen countries marched through Hong Kong, some scuffling with police and others diving into the city's harbor in protest. About a hundred other Korean activists jumped into the cold waters of Victoria Harbor wearing life preservers and tried to swim to the convention center but were cut off by police patrol boats. Also, about 4,500 demonstrators stayed on a route designated by police and peacefully protested trade accords they say benefit the rich at the expense of the poor. Many protesters in Hong Kong said they hoped their presence would pressure negotiators to produce a fairer deal for poor nations, by making rich countries' markets more open to goods from the developing world
Pascal Lamy, director-general of the WTO, urged delegates to continue working toward a wide-ranging trade deal that could lift the global economy. "We must not focus on ourselves. We must focus on our children, and our grandchildren," he said. The meeting took place under high security in a glistening convention center that extends into the harbor. Police have sealed off the area around the building with water-filled plastic barriers and metal fencing, and patrol boats are positioned in the surrounding waters.

Friday, December 16, 2005

Loyalty Management

Did u know there is something called "Loyalty Management"? Well, if you didn't know, here's what it means - "Loyalty Management grows a business’s revenues and profits by improving retention among its customers, employees and investors." in Darrell Rigby's own words. Loyalty programs measure and track the loyalty of various groups, diagnose the root causes of defection among them, and develop ways not only to boost their allegiance but turn them into advocates for the company. He also mentions that Loyalty Management quantifiably links financial results to changes in retention rates, maintaining that even small shifts in retention can yield significant changes in company profit performance and growth.
Common uses, as identified by Darrell Rigby include:
a) Build lasting relationships with customers who contribute the most to profitability, and capture a larger share of their business;
b) Generate sales growth by increasing referrals from customers and employees;
c) Attract and retain employees whose skills, knowledge and relationships are essential to superior performance;
d) Improve productivity, and decrease recruitment and training costs;
e) Strategically align the interests and energies of employees, customers, suppliers and investors, in a self-reinforcing cycle;
f) Improve long-term financial performance and shareholder value.
WOW! Whadda concept!

Live Life Fully!

The most memorable New Year gift in the recent past is a lovely "Live Life Fully" kit (a one-page document!) that my dad (Mr.J.Kannan, a Freight Forwarding veteran) gifted to me a few daya ago. I am simply dumbstruck by this document and thought it would make great sense for me to post it here for the benefit of the ROW (Rest of the World). Here it goes...
Live Life Fully



Einstein and the Banker!

Einstein dies and goes to heaven only to be informed that his room is not ready yet. He is greeted by the doorman, who explains, "I hope you will not mind staying in the dormitory, but it's the best we can do and you will have to share the room with others We are very sorry!"
Einstein says that this is no problem at all and that there is no need to make such a great fuss. So the doorman leads him to the dormitory. They enter and Albert is introduced to his four new roommates.
The doorman states, "Here is your first room mate and he has an IQ of 180!" "That's wonderful!" says Albert. "We can discuss mathematics!"
Next the doorman introduces his second roommate, saying, “His IQ is 150!""That's wonderful!" says Albert. "We can discuss physics!"
Further along, the doorman says "And here is your third room mate. His IQ is 100!""That's wonderful! We can discuss the latest plays at the theater!"
Just then another man moves out to capture Albert's hand and shake it. "I'm your last room mate. I'm sorry, but my IQ is only 80."Albert smiles back at him and says, "So, where do you think interest rates are headed?"

Tuesday, December 13, 2005

Never Assume!

I always say "Assumption is the mother of all f**kups"...Well, maybe thats a crude (and an uncensored!) way to hit the nail but as long as you hit the nail right on its head...its fine!. I have come across many occassions where people tend to assume things and therefore end up doing things that aren't expected out of them. To them, here is what I would like to say "Dont assume things: when you ASSUME you make an ASS out of U and ME", which is bad enough. Therefore, the final take-away is "Never assume, Seldom deny, Always distinguish!"

Monday, December 12, 2005

Shut Up, Move On (SUMO)

I recently read an article about Paul McGee a.k.a the "SumoGuy" in a professional association's journal and I personally found it very enriching and therefore thought I could share it with the ROW (Rest of the World). As Paul puts it "SUMO is a phrase to say to ourselves (and sometimes others!) when we are acting or thinking in a way that is hindering our ability to succeed.....SUMO is meant to be challenging, thought-provoking and memorable message". The SumoGuy has identified SIX PRINCIPLES designed to help you create and enjoy a brilliant life:
1) Change your T-Shirt - Take responsibility for your own life.
2) Develop fruity thinking - Take charge of your thinking. When you change your thinking, you ultimately change your results.
3) Hippo time is OK - Understand how setbacks affect you and how to recover from them.
4) Remember the beachball - Increase your understanding and awareness of other people's world.
5) Learn Latin - Change comes through ACTION and not INTENTION.
6) Ditch Doris Day - Create your own future rather than leave it to chance.

Make everyday a "Great Day"

You know, William Shakespeare said around 400 years ago that nothing is either good or bad but thinking makes it so. Ponder that. Even that may send a person into a lifetime of happiness or send another into a psych ward! Many people have lost limbs or endured other similar injuries and they believe it may have been the best thing that ever happened to them, going on to remarkable success and happiness in life in spite of, and even as a result of, their injury. Many others, though, are reduced to rubble from the exact same event.
The statement is phenomenal:"No matter what I am doing, I try to make it as enjoyable as possible." Because we know very few people who don't either spend enormous amounts of mental energy either looking backwards bemoaning their past and crying over it or looking to the future, imagining the worst outcomes. Very few people, enjoy very many present moments to (many of them) the fullest. Life is made up only of present moments. Present thoughts. Present decisions. Present actions. In each one, we have a choice... to be in it, to do what we should, what we can and to enjoy it for what it is. When they're gone, they're gone forever.
Yeah, sure... some moments and some days are better than others. But we can't determine which days are going to be those monumentally wonderful days. Therefore, one thing you could do is to write or type on a piece of paper and tape it to the top of your monitor these words:"No matter what I am doing today, I am going to make it as enjoyable as I possibly can." Make that your primary focus today... each and every minute and every hour today, and I promise you that today will be one helluva great day!


Benchmarking is a systematic comparison of organizational processes and performance to create new standards or to improve processes. A benchmark is a point of reference for a measurement. There are 5 types of benchmarking...
1) Internal - benchmarking within a corporation, division, business units etc
2) Competitive - benchmark performance / processes with competitors
3) Functional - benchmark similar processes within an industry
4) Generic - comparing operations between unrelated industries
5) Collaborative - benchmarking carried out collaboratively by groups of companies
Various costs that could be attributable to benchmarking exercise would include visit costs (travel costs. lost labour time, boarding & lodging costs etc..), time costs (investment of time by team-members to research a problem, brainstorm, performing management experiments etc...) and database costs (costs of creating and maintaining a database of best practices and companies associated with each of the best practices).
I must say that benchmarking is a tough process that would involve tons of commitment & persistence for it to succeed. Also, it must be performed continously inorder to reap the true benefits over time (did I say "In relentless pursuit of excellence"?)

Nobel Prize 2005

The Royal Swedish Academy of Sciences has decided to award the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, 2005, jointly to Prof. Robert J. Aumann (Center for Rationality, Hebrew University of Jerusalem Jerusalem, Israel) and Prof. Thomas C. Schelling (Department of Economics and School of Public Policy, University of Maryland College Park, MD, USA) for having enhanced the understanding of conflict and cooperation through game-theory analysis. As described by Prof. Jörgen Weibull, Member, the Royal Swedish Academy of Sciences, Chairman of the Economics Prize Committee, Game Theory is all about strategic interaction. Such interaction may occur within or between families, local communities, firms, organizations or whole countries. In most instances, no single party, or "player", can determine the outcome single-handedly; the result of interaction depends on everyone's behavior. Just as in chess or bridge, a player's best move thus depends on the moves that have been and will be made by other players. Consequently, in strategic interactions each player acts on the information at his or her disposal, as well as on expectations of others' future actions. However, others' actions depend, in turn, on their information and expectations about your actions, so all players' actions, information and expectations are intertwined in a complex and fascinating pattern. The analysis of strategic interaction, with due regard to these complexities, is precisely what game theory is all about.

Friday, December 09, 2005

Top-10 lies told by Finance Profs!

Recently, I read this at a website and therefore wanted to share it with ROW (Rest of the World)...Here it goes...

10 - Don't sweat that poor grade on your midterm. I am certain that you'll do much better on the final.
9 - Come by my office any time. I'm always available.
8 - You can make a killing as a stockbroker.
7 - Don't worry if you can't remember that formula. The main thing on the test is that you grasp the intuition.
6 - It doesn't matter what I think; write what you believe.
5 - If you come to all the lectures, you'll do just fine.
4 - My other section is much better prepared than you guys.
3 - What's your problem? Any moron can understand bond pricing models.
2 - Don't worry about that final grade. No one will care anyway.
1 - Of course, I make a lot investing. I only teach so I can help young people.

Intel & JP Morgan invest in India

Intel, the world's largest chip maker, and JP Morgan Chase, the global investment banker, said on Monday that they would outsource significant operations to India, an indication that more complex high-value work was moving here. J. P. Morgan Chase said it would add 4,500 employees in India by 2007. UBS said it would open its first center in Hyderabad, with 500 jobs, in early 2006. Goldman Sachs has 750 people in its center in Bangalore but has a capacity for 1,500 employees.
Now, my question is whether the above companies want to use India as a mere body-shopping location / destination (ofcourse the Indian workforce would be more than delighted to work for Intel, JPM, UBS, GS etc for the lofty salaries that they would be paid BUT in 10 yrs time, I bet Indian grads would be recognized as mere transaction-processors....jus rote processing!) or do they really wanna add value by moving / shifting their CRITICAL (Value added!) activities from the US (which I doubt, if it would happen in the forseeable future!)

Thursday, December 08, 2005

HK Business Awards 2005

Last nite, I was invited to the Annual HK Business Awards hosted by SCMP & DHL and I must say that the awards nite was indeed fantastic tho Bernard Lo of Bloomberg did ape (or atleast tried to!) Conan O' Brien, Jay Leno, Deve Letterman & the likes....ofcourse, the chinese felt that he was pretty good at comments from me tho'.
Well, the main purpose of this post was to mention about Ms.Mimi Donaldson (co-author of Negotiating for Dummies) who was the key note speaker at yesterday's awards function. Well, she basically kicked-off with 'leadership' and what it means to be a 'leader' and then started talking of 'formal people' and 'casual people' and the ways and means through which these both types of people co-exist..(I believe, if u cant cure, u gotta endure!) and she cracked a few jokes involving BOTH formal & casual people and I must say her speech was short, sweet, crisp, simple & kinda "old wine in a new bottle" types.....ofcourse, it was FUN! But if you ask me "Well, did the leaders learn anything new?", I would say "Well, Next question please!"

Tuesday, December 06, 2005

Dare to become an accountant!??

These 3 questions (and their answers, ofcourse!) COMPLETELY changed my perspective about bean-counters...dunno whether its for the good or bad (hopefully not worse!)

Q: When does a person decide to become an accountant?
A: When they realize they don't have the charisma to succeed as an undertaker.

Q: What's the definition of an accountant?
A: Someone who solves a problem you didn't know you had in a way you don't understand.

Q: What's the definition of a good tax accountant?
A: Someone who has a loophole named after him.

Hope you enjoyed reading in as much as I enjoyed posting it on my blog.

Candor - A Must?

I am reading a book written by Jack Welch titled "Winning" in which he excellently describes about candor and what it actually means in an organizational context (both as a leader and as a manager). I totally agree with the concept of candor but would like to know as to how far can this concept be stretched!?? Is it too good to be frank?? Is freedom from prejudice the best thing at all given occassions?? Is it OK to be impartial at all times?? Is it good to be open at all times and to all people?? Well, I believe, obviously the answers to the above is an "Unconditional NO" for the simple reason that everyone is a prisoner of his / her own experience and no one can eliminate prejudices....u have to just recognize em'! Feel free to share your thoughts...

Saturday, December 03, 2005

The Thinkers 50 Ranking

Produced by Suntop Media in association with the European Foundation for Management Development (EFMD), the Thinkers 50 2005 provides a new ranking list. Top-5 thinkers are ....1) Michael Porter, 2) Bill Gates, 3) C.K.Prahalad, 4) Tom Peters and 5) Jack Welch. Other Notable Thinkers include Jim Collins (6), Philip Kotler (7), Henry Mintzberg (8), Gary Hamel (14), Stephen Covey (18), Rosabeth Moss Kanter (19), Robert Kaplan & David Norton (22) to name a few. Four notable Indian thinkers who appear in the list are C.K.Prahalad (3), Ram Charan (24), Vijay Govindrajan (30) and Rakesh Khurana (33). Kudos to all u guys for making India proud!

Friday, December 02, 2005

Total Quality Management

TQM - A very interesting topic indeed..Do you know what it really means?? (I mean in letter & spirit!!!)...well, actually TQM is a concept / philosophy that was introduced in the late 70s (early 80s) inorder to involve everyone (TOTAL) in the organization performing all activities to conform to a set of quality (QUALITY) standards (policies, procedures, guidelines, framework etc..) that could be managed (MANAGEMENT) economically, effectively & efficiently (remember 3-Es?). The basic principles of TQM are: -
1. Quality can and must be managed.
2. Everyone has a customer and is a supplier.
3. Processes, not people are the problem.
4. Every employee is responsible for quality.
5. Problems must be prevented, not just fixed.
6. Quality must be measured.
7. Quality improvements must be continuous....remember KAIZEN?
8. The quality standard is defect free.
9. Goals are based on requirements, not negotiated.
10. Management must be involved and lead.
Therefore, the key to improving quality is to improve processes that define, produce and support products and services.

Doing is Everything!

I recently received an email from a friend of mine based in the Swiss which had a very inspiring quote by Nolan Bushnell (Founder of Atari Computers) - "The critical ingredient is getting off your butt and doing something. It's as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer." I am absolutely inspired by this quote and therefore wanted to share it with ROW (Rest Of the World). It's so true that "Actions speak louder than words" and its always "Better late than Never" pull up your socks & get crackin' with whatever you wanna do (accomplish!).

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