Blog of Strategic,General and Financial Management (English/Spanish)

Strategycorner is now expanding its content to include posts about General Management, Financial Management, Finance Transformation, Marketing and HR Management. Posts will be published in English or Spanish.

At the end of the blog there are different charts about Strategic Management in Spanish. In the archive area you could find a lot of posts about strategy and its execution in English/Spanish.

Jesús Peral
Executive MBA IE Business School, Madrid,Spain

Master in Strategic Management
IDE-CESEM Business School, Madrid, Spain

Find at the end of blog all charts related to Strategic Management topics commented in the posts

Mapa Estratégico Genérico/Strategy Map

Mapa Estratégico Genérico/Strategy Map
Mapa Estratégico Completo

Modelo de Dirección Estratégica/Strategic Management Model

Modelo de Dirección Estratégica/Strategic Management Model
Modelo desarrollado en las entradas 1 a 100. Ver archivo del blog
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viernes, 8 de septiembre de 2017

Perhaps it is not so difficult to manage people

During my career I have heard many times that it is complicated to lead and manage people. However when an employee reaches certain level of experience and knowledge, let´s say, when reaching the professional seniority, you could set goals to this employee, give some empowerment, facilitating the role of the manager. In these circumstances manage people could not be so complicated unless in a particular organization the obedience is more valued than the intelligence.

The typical conflict between manager and subordinates or collaborators, can appear for different reasons. I could include here the incompetence of both sides, the typical organizational ineptitude and the fact, sometimes very common, the employee is obliged to give up the common sense, his/her consolidated knowledge and his/her professional values. In the environment where his/her obedience is more valued that his/her intelligence you should also value his/her loyalty and the mutual understanding. Of course, not all the employees escape from the effort and need to have a foreman as a manager.

During my extensive experience managing people I have found collaborators within the famous theory X and Y from McGregor. Indeed, it is easier to manage people under the Y, skilled, engaged and committed with the results, than under the X, collaborators that try to escape from the effort. Basically because with the first group you normally have low intensity relationships or frequency once you have set and agree the goals with them. On the other hand, when it comes to the second group you could find collaborators that would do nothing if you don’t tell them to do it. But all of this is a theory so you could share your own experience.

At the same time that knowledge and innovation is consolidating, as well as human capital and continuous learning, we could think the ideal situation to manage people is to set and agree the goals, allow some kind of self-leadership behind these goals and provide the right resources to the teams. In this regard, the manager, more than behaving as a modern foreman, should be focused on managing his/her department or organization.

Very frequently I have heard about management is just about motivating people but sometimes I had the feeling that many employees when perceiving they are encouraged and stimulated could be frustrated and demotivated. Perhaps the “art” consists in motivating without being visible but this is normally very difficult. I would say that with attractive goals the employee with the “Y” profile would head to them more for a mere magnetism than for following the motivating leaders.

Long time ago the employees were considered the arms and legs of the organization. However, nowadays, in my view the employees are really the heart of the organization and this organization will continue beating deeply as long as the leaders work with the passion of the first day and the intensity of the last one.

In many sectors the employees with more expertise have to exceed their managers in technical knowledge and also keep updated in their discipline. And even know what nobody knows!! Many times the decisions of the senior management have to take into account the technical knowledge, the capacity of analysis and the good judgement coming from the more skilled employees, that is, not only human resources, but also intellectual capital.

So what about people management? I think it would be enough in many cases to define correctly the individual goals and trust in the employees with “Y” profile. I would say we would need to simplify using self-management and empowerment, the need to achieve reasonable results. However the management style of every organization responds typically to the “mental models” of the CEO who can bet for the true value of the employees or can be inclined to hold the bosses responsible for the good decisions and blame the subordinates for the failures, in other words, to reduce the importance of the workers.

In summary, I have to say I have heard in many occasions that people management is kind of an art, manage middling subordinates is easier than manage talented people, manage people requires a good head and heart and manage people is complicated, because they have age, genre and character. Generally speaking it is known the difficulty of managing people and this is also more difficult when it comes to talented employees. But in my view this difficulty is never considered based on the cultural environment, with the management models of the organization, with the management style that sometimes doesn’t allow the intellectual capital to be developed adequately. Based on that I would foster cultural environments to develop talent and reward the efforts, maybe all would be easier.


miércoles, 16 de agosto de 2017

The importance of knowledge management in the Finance transformation

Over the last 6 years I have been involved in Finance transformation projects related to BPO activities, Shared Service Centre implementation and Migrations & Transitions to stabilize existing Centers of Excellence. The companies where I worked, in different countries, are well known and successful which took the decision to follow this strategic transformation to standardize processes, gain efficiency, reducing operating costs and above all to enhance the value of the finance function as partner of the decision making and future pillar to achieve a sustainable competitive advantage. The companies act in highly competitive markets with a fierce competition and with clear pressure from shareholders and stakeholders.

This movement in my career was guided for my approach to get a continuous learning and to understand the two sides of the story. I have an extensive experience as Finance Director so my view from the customer perspective was clear in terms of requirements and improvements. Hence I was looking for gaining experience from the supplier perspective to achieve what I call “the whole egg”.

During this period the word Finance Transformation was very common in all meetings regardless the level of the attendees. Every one mentioned this for different activities. The first question I tried to answer was: What do we gain with a Finance Transformation project?

Well, from all my experience in the above mentioned companies and projects, the summary would be as follows:

·         Need of less investment of time and resources in all the operational and control processes

·         Improve of the quality of the information for the decision making process

·         Increase in the specialization of the finance resources

·         Finance becomes a business partner

·         Finance organization can be focused in value added and strategic activities

·         To achieve synergies it is necessary to be focused on the delivery of standardized  services and the consolidation while you balance the local and business units needs

The main focus of all the transformation projects is similar in my opinion, apart from the core achievements, the companies would need to be focused in being a learning organization and leverage the knowledge, so I would say to excel in the knowledge management.

A learning organization is skilled in creating, acquiring and transferring knowledge. In other words, a learning organization improves a company´s ability to react to, to adapt to, and capitalize on changes in its internal and external situation. All the projects commented above have a common core element, the knowledge transfer.

In my opinion the learning organization need practices and mechanisms which will:

·         Capture what is happening in the business environment

·         Enable those who receive the information to relate it to what others are observing and to analyze it in the light of the company´s previous knowledge

·         Document both information and analysis and make them available to others at the company and also for subsequent use

·         Measure the organization´s rate and level of learning in order to ensure that gains have in fact being made

Probably all the above elements could be considered as part of the knowledge management. I would say knowledge is information combined with experience, interpretation and reflection. Hence knowledge management could be the systematic process for the purpose of collecting and controlling the resources of the employees and abilities just as a company controls its inventories, raw materials and other physical resources.

At this point of the post, I would like to mention other critical element, the information. There are several reasons why we are nowadays talking increasingly about the strategic importance of the information. The technology has given us new possibilities while also forcing us to seek competitive advantage in ways less easily imitated that close physical proximity to customers. What companies can do is to create structures around people, places for interaction in combination with procedures and stored data.

Based on my above mentioned experience a company searching a conscious policy of knowledge management has to ask itself a very simple question: What do we want the knowledge for? The assets of a company run for profit are worth the present value of the effects on expected streams of future payments. When a company makes an investment in a data warehouse it does so in anticipation of improving its profits, meaning, of lowering costs and/or increasing revenues. How do we describe the link between expenditure and benefit? In other words, before we spend our money we should try to agree on why we are doing it.

My observation is the focus is on the structure surrounding people and data. But what tools, what infrastructure is provided for people? What incentives are offered to encourage them to contribute their knowledge? Are successful stories published which show the value of sharing knowledge? The formula should include data, people and structure. The companies should work on its strategy to create something unique and difficult to imitate. As you can imagine this is not supposed to be easy but this is part of the top management role.

I would like to finalize this post commenting on the other critical element, the systems. In my opinion the underlying cause of change is the shift of focus towards core competencies at the heart of the processes and away from the process flows themselves. Based on this the change imposes new requirements on company information systems. I have seen this directly. So, what should be the requirements of these systems? My observation is the systems should provide new languages, categories to identify and measure the company´s competencies and skills. In addition the new applications should emphasize the problem solving and presentation rather than results and transactions. With this regard I have seen different reengineering projects but this traditional view is usually taken to mean gathering traditional company information in newer, cheaper or simpler ways so that it can be made available more rapidly to more people. But if the companies are to be focused on core competencies these are normally based on learning and experience therefore the traditional data warehouse solutions have little to offer in my view. The challenge here is to build up information systems which see that company employees share both their information and their experience and which help them to do so.

As a summary I would like to say as I have seen in my journey so far the systems support the processes, transactional processes, integrated logistics where applicable and work flows. However the challenge, in my opinion, is to achieve systems which support competencies, for example, conversation and learning at work, networks for connecting people, structures to interchange of experience and communication building.

The journey is still in place so hope to see the new developments and how companies are adapting the finance transformation projects to the new demands of the environment, the challenges in the markets where the companies operate and the underlying need for the finance function to be seen as a value driver and the necessary business partner.

martes, 25 de julio de 2017

Persuasion is another word for selling

Although it cannot be extrapolated for all the cases, in my opinion, a manager´s job is 60 percent getting it right and 40 per cent putting it across. We, as managers, spend a lot of time persuading other people to accept our ideas and suggestions.

This post is about persuading. You may feel that good ideas should sell themselves, but as you know life is not like that. Everyone resists change and something new is certain to be treated with suspicion, not always of course.

Six rules I have learned about effective persuasion in my career are commented below:

·         Define your objective and get the facts. In other words, decide what you want to achieve and why. Gather all the facts you need to support the situation. Very important, eliminate emotional arguments so that you and others can judge the proposition on the facts alone.

·         Find out what the other person wants. Never underestimate the natural resistance to change. Bear in mind that such resistance is proportional, meaning, not the total extent to the change.  Because, normally, the first questions people ask themselves are how does this affect me? what do I stand to lose? what do I stand to gain?. Ideally you should answer these questions before persuasion can start. Very simple, right? But the key to all persuasion and selling is to see your proposition from the other person´s point of view. Let´s say, have some kind of emotional intelligence. If you can do this you will be able to foresee objections and present your ideas in the way more attractive to him/her. You should try to find out how the other person looks at things and, extremely important, what he/she has to say. Therefore, don’t talk too much, ask questions to find out. Then present your case in a way that stresses the benefits to him/her or at least reduces his/her objections or fears. Like selling a product where the more important argument is the benefit not the features of the product from a consumer/customer point of view.

·         If possible, prepare a simple and attractive presentation. Again, emphasize the benefits. Anticipate objections.

·         Find some common ground in order to start off with agreement. Avoid defeating him/her in arguments. Help him/her to preserve his/her self-esteem. And, very important, always leave him a way out.

·         Show conviction because you are not going to sell anything if you don’t believe in it and communicate that belief. Remember to spell out the benefits. What you propose is of less interest to the person concerned that the effects of the proposal on him/her.

·         And finally, I would say, choose the right moment to settle the proposal and get out. Take prompt follow-up action. There is no point in going to all the trouble of getting agreement if you let things slide afterwards.

Based in all the above I concur that persuasion is really just another word for selling. Hope you agree and share your experiences.

viernes, 7 de julio de 2017

Developing people: my modest experience

If you have led teams in your career it is likely you have thought your “inventory goes up and down in the lift”. Why? Because your main resource, let´s say, your working capital was your people. Money matters but he human beings who work for you and the organization matter even more.

In this post I would like to share my modest experience in developing people. I have always learnt from my prior senior managers, from a pragmatic view, to regard people as an investment. Their value increases as they become more effective in their roles and capable of taking on greater responsibility. In accounting terms, as I have worked as Finance Director and other finance managerial roles for many years, people may be treated like any other asset on the balance sheet, taking into account acquisitions costs and their increasing value as they gain experience. Until here I am not discovering America again!!!

But, which is the manager´s contribution to effective training? In my experience I could mention several ways you can contribute to the effective training of your team, as follows:

·         Determine the standards of performance required for each of the roles you control

·         Analyze the competences relevant to the achievement of these standards.

·         Agree with the individuals concerned what these standards and competences are

·         Review with these individuals their performance so that agreement can be reached on any gaps to be filled between what they can do and what they should be able to do.

·         Treat every time you give someone an instruction as a training opportunity

·         Allow for the learning curve. Don´t expect too much, but do require trainees to improve at a pace which matches their natural aptitudes.

·         Train and develop by example. Really important. Give people the opportunity to learn from the way you do things.

·         Remember that the core responsibility for training and developing your team rests with you.

·         Plan the training of your team in accordance with a regular review of their training needs

People learn mainly through experience. So it is worth spending a little of your time planning the experience of anyone for potential for development.

Planning someone´s experience, means for me, giving him/her extra tasks to do which provide a challenge or extend him/her into a new role. It could be a project which he/she has to complete or he/she could be included in a project team looking at a new development or problem which cuts across organizational boundaries. Projects which enlarge experience in unfamiliar areas are particular useful in my view. Planned experience will work better if it is accompanied by coaching so that those undergoing it can receive the maximum benefit from your expert advice.

The final piece is coaching. The best way to learn how to manage is to manage under the guidance of a good manager. Coaching is an informal but deliberate way of providing this guidance. It should be linked to performance appraisal.

But coaching is a more continuous process. Every time you delegate a task to someone and discuss the outcome you are presented with a coaching opportunity. When you delegate you can provide guidance on how the job should be done. When you discuss progress with your collaborator or when he/she reports back to you, you can ask questions on how well he/she has thought through what he/she is doing, suggest alternative ways of looking at a problem (but don´t provide the solution, je je) and provide constructive criticism if things are not going well.

So, based on all the above, remember, you can help to develop people by discussing higher-level problems with them, involving them in your decisions and increasing their understanding of how to tackle a job senior to the areas for which they are responsible. This is part of my experience so far.

jueves, 4 de mayo de 2017

What do we need a leader for ?

In this post I would like to comment about leaders and leadership sharing my experience in one of the companies I have worked for based on the analysis of what happened and how the local CEO faced the situation.

In the year 2001 my company was involved in the launch of a new product. The worldwide marketing plan required a huge investment in trade and consumer marketing. The Senior Management team had great expectations in terms of volumes and profits. The competitive landscape was very difficult. All the teams were aligned to achieve a common goal. The finance department was ready to support sales and marketing efforts by managing credit limits, inventory levels and working capital investment.

The sales and distribution plans were very aggressive in terms of placement reaching new channels never used before. Financial projections were created assuming different scenarios but in all of them the expected results showed good margins and profitability.

3 months after the launch the results were really disappointed. The sales graphs did not show the expected sales levels with a dramatic downturn in different countries and also on a by customer basis. The local CEO and the international management team were really concerned.

The above situation could be familiar for a lot of the readers of this post. The main difference probably derives from the reaction and behaviour of the local CEO to cope with this situation.

The local CEO reacted very quickly to the downturn in sales. His reaction not only was a reaction of responsibility but also very sensible. Instead of adopting a defensive attitude, he accepted the reality.

One of the main elements of his success was his capacity to communicate with the marketing team as they felt it was their failure. An executive of lower level could have blamed and get away from the problem. But he understood their reaction and communicated with them very openly.

So what is the key message from this? It is fundamental to integrate all departments in a team effort to get the best possible result. The local CEO was able to assume the responsibility and take advantage of the potential errors. He faced the facts as they were using his emotional intelligence. He was very talented to get the best out of his team, helping them to develop and improve. His sincere interest in the others led to create a real sense of loyalty. He fostered a sense of sincerity encouraging all the employees to be open and honest with him. You could discuss with him and tell him you were not in agreement. He did not like cowards. He was especially sensible in assigning the right member of his team to the particular projects. The learning here is, the leader, ultimately, has the responsibility about what to delegate and to whom because if you choose the right person, at the end of the day, it is likely you will succeed. This also shows us the importance of the management of emotions in the leadership to be closer to the success when taking decisions. The emotional intelligence helped the local CEO to find the solution to the failure.

So what he did? Firstly, he assumed the error as his thing and did not blame his team but he considered them as part of the solution. He transformed the emotions into a source of information. The decisions need to incorporate emotions to be real. The good decisions take into consideration the emotions as a sign of respect for the people. The affective results end very close to the effective result. I think, nowadays, effectiveness depends more and more on the affection.

The emotions do not happen by chance, they follow a logical order that activates and deactivate them. They exist, we just need to find and organize them when needed. Obviously this requires some kind of effort. The idea here is to identify the emotions first, then understand them and finally channel them to the action.

In my opinion the leader of the 21st Century is no longer isolated in concrete areas as now he/she has to intervene in all the processes and is the cornerstone of the example of attitude, as he/she decides and acts, creates values and expectations. It is really the reflection of the change in the organizations.

The effort of the leader consists of understanding how to coordinate the company value in two directions: value creation for the shareholder and added value to the organization through strong policies of internal and external quality able to create quality of life. The increase of productivity is linked to the innovation in the ways of managing and leading the organization. New ways associated to the talent, involved in the creativity, understanding technology as a way for progress and continuous improvement. This task to link with the future has to be managed, from inside, by the leader with the expectation to overcome critical situations.

Lead the organization in the 21st Century means to manage successfully the competitiveness, trust, quality, culture, knowledge, behaviour, compromise and change.

The importance of the leader lies in the security of his/her behaviours. The 21st Century requires leaders emotionally stable. The leader needs to create the culture of the team, the culture of the organization, without overshadowing the capacity of each person in the common effort.

It is necessary to foster the direct leadership that impact in the knowledge of each member supporting the leader. This leadership requires compromise with the team, led and managed by the leader so he can inspire, motivate, listen, demand and analyse the decisions in depth, encourage the achievement of goals and cooperate in the development of his/her teams. For all of these it is required a great capacity of communication and adaptation.

The competitive advantage of the emotional leadership is the individualised treatment of the talents and the global knowledge of the activity. You cannot retain a talent if you don’t know the determinants and circumstances around the work. Only this way you can recognise the effort and the employee can be aware of it.

The emotional leader follows his/her people. He does not expect people follow him/her. He/she engages them giving example of coherence. Join the efforts to achieve a common goal and avoid using “we” and “they”. He ensures every employee feels passion for his/her work and for the company they work for.

You might get several learnings from the above. For example, the team is beyond its members. The responsibility has to be shared by all. We need leaders in all the teams and leaders that can train others leaders, and the most important, to teach then to understand none of us is worth more than the sum of all.


martes, 18 de abril de 2017

I am not your boss but a friend who is always right

Should we complain and tell our boss what we think about him/her? This post is about this.


In many occasions we are unhappy with our work and with our boss. This situation leads us to consider telling what we think about him/her. But sometimes we need to know in advance what it is advisable to say before making a big mistake.

Talk with full sincerity to our boss, telling him or her all what we think is a very risky relief, above all if we don’t find the right moment, way and place.

Normally, this sincere impulse hastens due to lack of tune or for the permanent conflict with your manager. It might be your boss does not get along with you and you are aware of it.

It is also possible you were not meeting the expectations, he sees you as a threat or you always disagree with him/her.

You could use different strategies depending on the reasons. You can leave the company or you could also survive coping with the situation until you find a new job but you cannot fight this attitude of rejection as if nothing happened. Therefore the solution is to complain or be honest and tell what you really think.

It is true that if the company where you work monitored your performance based only on your achievements you should not be worried about talking honestly and openly. But honesty turns out to be, in many companies, an act of suicide.

A very important advice would be, never do this in front of a big audience. The negative feedback has to be commented in private and the positive in public. This is a rule of thumb.

It is very important to be focused on the objective errors and avoid the personal view. In addition, you should propose your own alternatives and solutions to the potential mistakes of your manager. But you have to take into account that your boss could make the mistakes in particular circumstances and give a positive view to your critics by analyzing how he/she resolved them.

In my experience if an employee has the right skills for a job but shows lack of loyalty it is likely this is more important. So if you doubt it is better not criticizing and get some lessons for the future.

Based on the above the question is what to do to get anything positive? The important thing with your complaint is you don’t have hidden agendas nor has no substance. In addition it should be concrete as you are aiming the things change.

The decision to be honest with our manager entails our arguments have to be based on facts. We have to avoid judgements and interpretations clarifying what are our actual needs. But very important as well is to know how he/she feels with us so we could use the complaint to know what he/she expects from us.

Finally, to be honest does not imply to be fully transparent and tell the first thing that comes to our mind. You need to understand the circumstances and do an objective analysis.

Ideally the perfect situation is when you are fully aligned with your boss so you have discussed openly what you expect from him and what he/she expects from you. This trust is the base for the future relationship and normally leads to a higher performance and mutual satisfaction.

But remember, regardless what I have commented above, there is a second rule of thumb, Never tell your boss what you think about him/her. But it is up to you.



viernes, 18 de noviembre de 2016

Conflict management

Who did not find, was in the middle of a conflict or had to resolve one in your professional career?  You will not escape conflict in your organization or work environment. In my view it is inevitable. Mainly because the objective, values and needs of groups and individuals in any organization do not always coincide.

In my view, sometimes, conflict may be a sign of a healthy company. Boring agreement on everything is unnatural and debilitating. There should be fight of ideas about tasks and projects and disagreements should not be suppressed. They should come out into open, because is the only way in which you can ensure that the issues are explored and conflicts are resolved.  This post is about managing the conflicts or better to say trying to manage the conflicts.

Every reader could have his/her own experience and way of resolving the conflicts he/she was involved or he/she saw in his working environment.

You can use, let´s say, a peaceful co-existence where you aim to smooth our differences and emphasize the common ground. It is well known we are encouraged to learn to live together. There is a good deal of information, contact and exchange of views and individuals move freely between the different teams, for example, between your headquarter and the affiliate or between sales and marketing departments. This is a pleasant ideal but it may not be practicable in many situations.

It is also known that conflict is not necessarily resolved by grouping people together. Improved communications and briefing groups could be a good idea but are useless, in my opinion, if management has nothing to say that people want to hear. And there is also the danger that the real issues, submerged for the moment will surface again in the future.

Other possibility is to get compromise. In this case the issue could be resolved by negotiating or bargaining and neither party wins or loses.  In this situation there is no right or best answer. Agreement only accommodates differences. As you can imagine real issues are not likely to be solved.

Based on the above the best approach would be to find a genuine solution to the problem rather than just accommodating different points of view. And as I said before sometimes conflict situations can be used to advantage to create better solutions. This situation has to be generated by those who share the responsibility for seeing that the solutions work. So what would be the sequence of actions in this case? First, those concerned work to define the problem and agree on the objectives to be attained in reaching a solution. Second, the group develops alternative solutions and debates their merits. Third, agreement is reached on the preferred course of action and how it should be implemented.

The conclusion could be that conflict is in itself not to be deplored. It is an inevitable concomitant of progress and change. What is to be disapproved is the failure to use conflict constructively. Effective problem solving both resolves conflicts and opens up channels of discussion and cooperative action. Take this into account in your next situation!!!!