Samuel Prasad, Ph.D.

To steer a boat you have to move to the back.

This is quite contrary to the theories developed by Kurt Lewin, Ronald Lipitt, and Ralph White in 1939 which state that there are only three major styles of leadership:

• Authoritarian
• Participative
• Delegative

Authoritarian style of leadership assumes that the leader has all the information necessary to make the right decisions. For this style of leadership to succeed employees must unconditionally accept the power of the leader and follow directions without questioning them. It does not mean that the leader can use demeaning language, engage in abusive or unprofessional behavior. As you can well imagine, this style of leadership may work well in the military but it rarely achieves the desired goals in a non-military work setting. Why? People don't like to be ordered to do things without explaining the rationale for the directives and without a clear understanding of the end goals. 

The participative style of leadership is much more common in companies where the leader includes one or more employees in the decision making process. The leader still makes the final decision and is responsible for the outcome of the decision. This style recognizes the strength and knowledge of key employees and is a sign that the leader is secure, confident and is not afraid to seek counsel from others. This is a style that most employees respect.

The delegative style of leadership must be used wisely and only if the leader has the full trust and confidence of peers and the team. This style of leadership assumes that the employees empowered to make decisions understand the end goals, are able to obtain and analyze the required information before taking any action. This style must be used only if the leader is not quick to blame others even if decisions made by employees causes things to go terribly wrong.

Social scientists over the past century have come up with many leadership theories. Most well known among them are:

1. "Great Man" theories assume that leaders are born, not made.
2. “Trait” theories assume great leaders share particular traits that make them well suited for leadership.
3. “Contingency” theories purports that environmental and external variables, including the type of followers determine the person best suited to lead.
4. “Situational” theories states that people who can recognize situational variables that affect the outcome of an action or decision are best suited to be leaders.
5. “Behavioral” theories are based on the supposition that great leaders are made not born which is the exact opposite of the "Great Man" theories.
6. “Participative” theories suggest that good leaders elicit input from other members of the group before making decisions.
7. Management theories also known as "Transactional theories" are based on a system of rewards and penalties. Good leadership is rewarded for accomplishing the stated end goals while failure to meet them are seen as signs of poor leadership and are punished.
8. Relationship theories also known as "Transformational theories" is the best form of leadership where leaders are able to motivate, transform and inspire their group members. It is no wonder that leaders who belong to this group have the highest ethical and moral standards.


Transformational leaders are ones who have learned the art of leading from behind. They listen to the people around them. They usually surrounded themselves with smart problem-solvers who do not need to be told what to do. Transformational leaders spend their time focusing on what they should be doing to achieve the end goals because they know that the people around them will do the same without  having to be micromanaged or told what to do every step of the way.

"To steer a boat you have to move to the back. Leadership is about asking questions and letting people answer them," says Anne Berkowitch co-founder of SelectMinds a social networking company in New York.

Project Failures due to Human Risk Factors

What percent of projects fail due to the "human risk factor"? According to published statistics more than half of the 60% of projects that fail are due to human factors. With numbers so high it is no wonder that human resource management is an inherent and critical part of any project activity, and as such plays an important role in the success of any project. But the sad story is that applying risk management to humans are largely absent because most project managers do not understand the process of identifying and assessing risk factors of team members, which if done properly would allow them to proactively develop techniques to mitigate such risks and boost the success of their project.

Project managers clearly understand that a team's performance is primarily dependent on the members in the team. Bruce Tuckman, an American psychologist proposed in the 1960s that a group of people who have to work together usually go through a series of conflicting and underperforming phases before they learn to work together. This is called the "forming-storming-norming-performing" model in which the group's first phase is characterized by individuals ignoring their differences, wanting to be friends so that they can be accepted into the group. This is very much like the "honeymoon" period in a marriage. This is followed by the "storming" phase in which members are no longer afraid to confront others in the group with their own ideas and perspectives. The third phase called "norming" is one in which members begin to trust each other, and begin to establish rules of conduct and behavioral standards for the group as a whole. They still need supervision to guide them and ensure that they all work for the common good of the group. Lastly, during the final stage called "performing" the group has now become highly self sufficient and is able to work very effectively without external supervision towards achieving a common goal.

But not all teams reach the "performing" stage. In fact, very few do, especially since product and project cycles have shrunk to weeks and months. So how does a project manager assemble a team that has an increased propensity towards performing at peak capacities in a very short time. Here are some of my thoughts:

• ensure that there are controls to increase quality and reduce defects due to human factors. In other words, provide the proper tools for the job. At the most basic level - performance can be evaluated through inspections. Remember, that quality cannot be inspected into a product. Quality begins by setting quality assurance standards followed by using well-defined quality control processes to ensure that the product meets quality assurance standards.
• reduce costs due to human performance limitations, i.e., do not hire people whose skills are not a good fit for the job at hand.
• reward and publicly acknowledge team members for exceeding quality and performance standards.
• have a strong leader at the helm who can articulate the vision of the project, motivate members to reach their full potential and one who is not afraid to tell the truth when things go wrong. Only full disclosure and truthfullness allows for quick course corrections.
• empower the team and encourage them to take calculated risks without fear of penalization. 

A quality-based organization goes a long way towards reducing the time and cost to bring a product to market.

Vendor Management - Project Managers get a C-minus.

Project managers are woefully ill-prepared in the area of procurement and/or vendor management. I am being very generous when I give them a grade of C-minus.

Price doesn't matter and SLA's (service level agreements) are only marginally important. It sounds quite dubious, and I am sure I will be hearing an earful from procurement managers vehemently condemning my statement. But having negotiated technology contracts for over 15 years with vendors across the globe - from Asia to Europe to America, I have found that traditional negotiating practices have inherent flaws and do not help in accurately calculating the ROI of a vendor engagement. Why? Because when using traditional methods - many components of the value proposition provided by the vendor does not even figure in the calculation of the ROI.

First, price should not be the only factor in selecting a vendor because organizations who are focused on the lowest bidder typically end up  paying for it in other ways, as in marginal performance and sub-standard quality from the vendor.

Second, while SLAs are important to the extent that they describe service guarantees it means different things in different countries. SLA's for the most part are enforceable only in western countries. In may eastern countries I have found that SLAs are used mostly as guidelines and not as legal binding contracts, which means that the customer has no legal recourse if the terms of the SLAs are not met.

No, I am not against SLAs. I do believe in identifying the right metrics or key performance indicators (KPIs) in drafting a SLA not only to define service guarantees but also to evaluate the performance of a vendor. On-time delivery, adherence to industry standards, low defect rates and a product that meets specifications are metrics that are agreed upon universally. But there are other heuristic factors that cannot be empirically quantified which are equally important in assessing not only the performance of a vendor but also the ROI.

There is a new school of thought that is starting to take hold where vendor performance is measured not just on "tangible" ROIs but also on "intangible" ROIs. A tangible ROI has a direct impact on the bottom line of the company. Intangible ROIs in most cases may not have a direct cash impact on the company. Here are a few examples of intangible ROI's.

According to Stephen Guth of CIO Magazine, the three top "intangible" ROIs are Innovation, Flexibility and Commitment.

Innovation:

• Does the vendor have the domain knowledge and relevant industry certifications to participate in the evaluation and re-engineering of the customer's processes?
• Is the vendor willing to share industry best practices and business improvement methods that they have adopted with success elsewhere which they believe would benefit the customer?
• As a result of vendor participation how has the customer's CIR (continuous improvement ratio) changed, which is defined as the number of process improvements implemented by the customer divided by the number of process improvements suggested by the vendor?

Flexibility:

• Is the vendor willing to change product scope or service offerings to meet the changing market needs of the customer?
• How easy is it to negotiate with the vendor?
• What is their ability to respond to unanticipated events?

Commitment:

• Has the vendor proven to be trustworthy based on their actions?
• Has the vendor invited you, the customer, to tour their facilities?
• Has the vendor provided unfettered (but reasonable) access to their domain experts?
• What has been the quality of the relationship between vendor and customer executives?
• Last, but not least - how high is the trust ratio, which is defined as the number of promises kept by the vendor divided by the number of promises made by the vendor?

 

Choosing the right Offshore Outsourcer.

What is offshore outsourcing? It is contracting with a third-party company located in another country to provide services to design or build products that might otherwise be performed by in-house employees.  Having worked with offshore vendors since the early 1990s, I have 10 tips which hopefully will help you choose the right offshore outsourcer.

1. Choose an outsourcer with whom you or someone in your network has worked with in the past and has established a level of trust. Do not view the outsourcer as one who is merely providing extra bodies to staff a project. The team at the outsourcer is really an extension of your staff. They must understand your company's culture and you must understand theirs. Be ready to go native! Start with a site visit to the outsourcer's facility. Take time to meet and get to know the outsourcer's team.
2. Do not shortcut internal preparation, planning and goal setting. Forrester data shows that it is quite beneficial to spend sufficient internal time on defining the overall goal of the outsourcing effort with respect to your company's business strategies and ensuring that detailed documentation is available for services that are being outsourced. The probability of failure goes up dramatically when the internal preparation is "fast-tracked".
3. Do not decide to outsource solely based on economic considerations. According to Gartner, outsourcing deals based on price alone are doomed to fail. Outsource to make your company more competitive in the market. Even though, cost savings will likely continue to be the driving force behind many outsourcing deals - do not nickel-and-dime the outsourcer. If you drive down the outsourcer in price or go for the cheapest offer - just like anything else - you get what you pay for. Outsourcing work to another country is usually a lot more expensive than you think because of hidden costs. Stephanie Overby in CIO magazine says, "Expect to pay up to 10% on managing the offshore contract."
4. Do not give up control of your outsourced project. There are many who believe that outsourcing a service transfers ownership of that business process to the vendor. Wrong! You need to remain engaged by participating in the planning, design and implementation in addition to determining how well quality standards and requirements are being met at every step. Successful outcomes are a result of defining quality metrics against which the outsourced service is measured at pre-determined points to determine variances so that quick corrective actions can be taken.
5. Outsourcing has inherent risks. Not all risks associated with outsourcing can be eliminated through well crafted service contracts. It is important to first identify and quantify the risks depending on the outsourcing operation and then work with the vendor to mitigate them. Risks associated with data security, process discipline, failure to deliver, turnover of vendor personnel and knowledge transfer are some of the common risks that need to be addressed. Ultimately, risk costs money. By using a collaborative approach not only can the risk costs be reduced but it usually results in reduced vendor charges as well.
6. One size does not fit all. The criteria used to choose an outsourcing vendor are different depending on the type of service, size and scope of the project being outsourced. It is important to stay focused on vendor qualifications that are pertinent to the project being outsourced and not use a generic one-size-fits-all approach. For example if marketing or advertising functions are being offshored it is important for the vendor to be knowledgeable about local culture and social norms. On the other hand, technical capabilities may play a bigger role in selecting an outsourcer for a technology project.
7. Choose a partner for the long haul. While it is important to ensure that the outsourcer is adequately positioned and qualified to meet your immediate requirements it is prudent to look beyond their current capabilities. Can the outsourcer scale up on technology, people and infrastructure as the needs of your company change? It is a good idea to share your company's strategy, roadmap and goals (as much as is practical) to see if there is a good match.
8. Choose an outsourcer with international certifications. This is an indication that the outsourcer follows industry best practices and standards which implies that there is a much higher probability that the end product will meet specifications with a lower than average defect rate. Teams with industry certifications provide a degree of predictability with respect to product quality and delivery.
9. The location of an offshore outsourcer is important because differences in language and culture in addition to the geopolitical climate can cause major problems. A country with a stable government that respects IP rights with good universities/colleges where the commercial language is English is usually a good bet.
10. Last but not least prepare your internal staff for the transition. Communicate, communicate, communicate. Outsourcing can cause major changes within the organization from layoffs to restructuring. The impact of outsourcing on your company's operations must be clearly communicated to spare employees the painful process of guessing who is going to be laid off next. According to Mary Weier of Information Week, offshore outsourcing rarely leads a company to eliminate most of its staff. In fact, it's fairly typical for companies that have adopted an offshore model to retain 70% or more of their internal staff.

If you could never fail..what would you do?

I recall seeing this question in one of the social networking sites some time ago. In contemplating this philosophical question I found that the answer can be gleaned by rephrasing the question - if I could always succeed at anything I attempted...what would I want in life? Well, like most people I would want good health and long life for my family and myself, a successful career, lots of money so I could buy anything I wanted, sail the world, play the Old Course at St. Andrews with Tiger Woods and beat him, and of course, world peace.

What's wrong with this picture? Well, we all know that a world with no diseases, no war and people buying and consuming anything they want, whenever they want will eventually lead to a rapid depletion of the world's natural resources, which is a sure recipe to cause the implosion of the earth's ecosystem and destroy every living being on the planet.

If the above is true, I'm sure most of us would not want success to be guaranteed. Why would we want the world to self-destruct? We learn from our failures and become better human beings.

According to Deepak Chopra, "success is the continual expansion of happiness and the progressive realization of worthy goals in spite of setbacks that may occur from time to time from which we learn and emerge even stronger." He goes on to say, "success is not only being able to enjoy every day in what we do to ourselves for our own gratification but also what we do to make the lives of our less fortunate fellow beings around us just a little less arduous."

Does "management" make it difficult for people to work?

Well, it depends. There are two types of management – bad and good.

The former is of the bureaucratic type that thwarts innovation, slows progress and rules exist just to safeguard ineffective managers. This style of bad management makes it easier for non-performing individuals to stay in positions of power. In such a scenario, Peter Drucker was absolutely correct when he said, “most of what we call management consists of making it difficult for people to get their work done.”

But then there is good management - the collaborative style which fosters creativity and free exchange of ideas critical to the success of a company. This type of management aims to maximize productivity by eliminating barriers so that people can accomplish their goals easily.

Can we completely do away with management? In a utopian world inhabited by geniuses and supermen it may be possible. Unfortunately most of us mortals need leadership and guidance. According to Mr. Drucker, “no institution can possibly survive if it needs geniuses or supermen. It must be organized in such a way so as to be able to get along with average human beings.”

What happened to corporate morality?

Morality is based on a loose consensus on what is right or wrong and usually refers to a code of conduct that is deemed acceptable by a society.  Joel Bakan in his book "The Corporation: The Pathological Pursuit of Profit and Power" surmises that corporations are completely selfish and in many cases even break the law to boost profits. In other words, unbridled greed and power have turned corporations into immoral entities. Employee welfare and societal good take a back seat to shareholder profits. This is quite evident in the "globalization" phenomenon characterized by the outflow of jobs to countries where wages are the lowest. Don't get me wrong - I am not saying that a corporation should not be competitive in the global market nor am I saying that a coproration should not make money. But at what cost? Should shareholder value come before the welfare of employees? Should a corporation be allowed to outsource scores of jobs destroying whole communities in the process? The notion that corporations in a free market will regulate themselves and behave responsibly has been proven wrong. Even Alan Greenspan has finally admitted that Ayn Rand's brand of unregulated free market capitalism does not always work in the real world. The chorus heard often is that government should stay out of the business of running businesses. Let the free markets rule, we are told time and again. We now know what unregulated human greed can do. It is time for a change. Speak up, stand up and demand that the government do its job of providing a regulatory framework where corporations don't profit at the expense of its citizenry.