Friday, February 29, 2008

Overloaded Star Performer

How many of us did get their performance targets moved-up as part of the last appraisal? Undoubtedly, all of us. How has that impacted our drive to achieve the new stretch targets? If you had put X amount of your ability(for the lack of one single factor) and T hours last year to achieve previous target, these are the options you have for this year:

I) X+ Delta(X) Ability and T hours
II) X Ability and T+ Delta(T) hours
III)X+ Delta(X) Ability and T + Delta(T) hours
IV) X Ability and T hours - Missed the target!

Among the four options, IVth is dangerous for your career and IInd and IIIrd will create stress. If you are really smart, you will go for option I. You will still be able to spend the same amount of time, as you did last year, with your family, at the golf course or wherever you like to spend those extra hours(?). But its not easy!
How many people could actually do that?

A recent article in Harvard Business Review titled, "Manage your energy, not your time" touches on the exact same points. Its not that the message is new but the use of term "energy" is actually very interesting since it is fundamental to whatever happens in our universe or beyond. Question is, how energy is tied to your ability to do something? One way to define ability is, trained energy. Its like switching on a light bulb. You know electrical energy is there and once switched on it will result in lighting the bulb.

Manging energy is the key. It is different from managing physical health. It has more to do with mind than body. Yes, a healthy mind lives in a health body, but healthy body doesn't necessarily guarantees healthy mind. Why? What else is needed?The answer may help you ace the common job interview question,"what keeps you going?"

More in subsequent posts...

Wednesday, February 27, 2008

What Starbucks can do?

Ok. The whole world now knows that Starbucks is having issues in managing its growth. Yesterday's shutdown of stores for few hours for re-training employees proves the fact that company understands the challenges it is facing. First one is, "How to make good coffee?" Wasn't it surprising for Starbucks which is supposed to be selling "Coffee Experience" ? Or it is acceptance of the fact that the unprecented growth Starbucks had in last few years impacted both, the quality of the coffee and the experience? How Starbucks is going to respond to the recent threat from McDonald's coffee? Was the company right in experimenting with $1 a short-cup of coffee? What kind of signal it sends to its customers and competitors? How stock analysts and investors are going to view it?

Lets see if we can explain this situation with a "new" performance measure called "GPAIPAD". This measure was the result of serendipity while valuing another company of similar business structure. This will be explained in more details in future posts. The measure shows that as of 30th Sep'07 the company is leaving 39 cents per dollar of investment in Assets to cover operating expenses, other than interest expenses. The same measure was 41 cents per Asset Dollar in 2006. In a way, it equates to Return on Assets Starbucks is producing per store. The same measure shows GPAIPAD of 27 cents for McDonald's. But the stock price of McDonald's is way above than Starbuck's. So what is the difference? Difference is, the future outlook. There is something which McDonald's is doing right but Starbucks is not. What is that?

Starbucks really need to get back to its original strategy of Operational Excellence and Customer Intimacy. It is the "experience" piece it needs to work upon. Copying a product and selling it at a lesser price is easy, copying an experience is not. Defining exactly what "Starbucks experience" means may be a good starting point and go from there. Things as simple as giving discounts to groups can be very effective. Isn't that what Starbucks should be really after? Group Experience! How nice... Look at this line in Starbuck's mission statement,"Contribute positively to our communities and our environment". Try to answer how Starbucks can contribute positively to communities? Isn't a group discount an obvious thing? Why just discount, shift your focus to providing a great experience to groups. Understand that, bad economy means less individual customers...but ...same number of groups, because groups tend to stay together, have discussions, both about good and bad things. Think, what may encourage groups to come to Starbucks? Casual meetings? Enahance the experience of those. Think, what may discourage groups to come to Starbucks or reduce the number of members in a group? Unavailability of health drinks? Provide those. May be, create new health drinks. Be inclusive while being exclusive! Its like providing one veggie meal option at a Sushi restaurant.

Increasing per store contribution will be the key to success of Starbucks. Lets see how the story unfolds.

Sunday, February 24, 2008

Executive MBA Pros and Cons

As more and more companies are realizing the value of MBA, experienced managers who do not have an MBA are flocking business schools to get a degree. The biggest questions these managers face while deciding on an executive MBA program are:

Is it worth the time and effort?
Top business schools vs the closest school available?
Stop-buy-fly EMBA programs versus the "full-time" EMBA programs?
Learning opportunity versus networking opportunity or both?
Return on Invested Capital?

Here are some great information resources which may help prospective candidates: