Archive for April, 2014

The Real Repercussions of CEO Indiscretions

Wednesday, April 30th, 2014

Why do the revelations of a CEO’s affair with one of his subordinates tell us more about his lack of respect and good judgement than the titillating events themselves? If the CEO is hired to profitably grow the business, then his first priority is to increase the probabilities that his key constituents (customers, shareholders, employees and others) will see their best interests served by his actions and his beliefs. I have assumed a “he” here because the overriding number of transgressions are from male CEO’s.

Some will argue that in this decade, the personal and professional lives of CEO’s are “separate”. Does that point of view have merit particularly where the CEO’s actions directly impact one or more key constituents?

The CEO position in mid to large-sized organisations has over the past 40 years become a powerful brand in its’ own right. That brand is built  on trust, fairness and equity.

  1. “Trust” in the form of putting the organisation’s  interests ahead of their own (corporate vs. personal risk and rewards).
  2. “Fairness” in the form of showing respect to their peers, subordinates, customers, shareholders and others they serve (leadership decisions consistent with the organisation’s core values and beliefs).
  3. “Equity” in the form of displaying good judgement commensurate with others and the position they are entrusted with (reward, recognition, ownership and so on).

When association with the CEO’s indiscretions has a negative impact on the organisation’s brand, all individuals concerned must be held accountable by the Board. When the Board elect to turn a blind eye, they are in fact diluting by proxy their own power and influence, not just the CEO’s, and their ability to positively impact the organisation’s future (results). That outcome is NEVER positive for any of the key constituents.

© James Berkeley 2014. All Rights Reserved.

Coming Up Smelling of Roses or Manure

Monday, April 28th, 2014

In excess of 110,000 people will make a rite of passage this weekend to Churchill Downs for the “Run For The Roses” (Kentucky Derby), approximately 16 million people will watch from their living rooms and re-connect with a sport for one day in the year. Yet the long-term health and prosperity of the sport in North America is mired in acrimony, vested interests and falling fan appeal. To the once-a-year viewer the reasons why are largely unclear.

It is fundamentally a lesson for entrepreneurs, businesses and indeed, governments, when ego, greed and self-interest are allowed to triumph over common sense and good judgement.  Going back to the 1960’s, power and influence has resided in a small number of people, who controlled the racetracks, the legal parimutuel betting, the licencing of the sport (the state racing associations and the Jockey Clubs), the media rights and the most successful horsemen. From that period forward, the fan (the customer) was subservient to each stakeholder’s selfish attempt to further their own interests, at the expense of others.

In businesses that are seeking profitable growth, leadership of this kind and neglect of the consumer or client is tantamount to business suicide. When those that have shown real leadership and vision (John Gaines and others) find that the sport’s best interests are constantly diverted and change is diluted, is it little wonder that the industry is in today’s parlous state? Fighting drugs and integrity issues, largely dependent on the growth and liberalisation of slots and other forms of of gaming to fund purses, midweek attendances at all time lows and mainstream television coverage a rarity outside the sport’s very biggest days.

Transformation is urgently required.  Vibrant strategies are important but above all else, strong leadership is required and a cultural change within the sport needs to rapidly take place. The sport desperately needs a “talisman”. Someone who can say “follow me”, a Lee Iacocca or Lou Gesterner-figure. It needs a focus on the winning line, not the quarter-mile marker. Maintaining a focus on the long-term and not allowing the short-term mishaps to lose sight of where it needs to end up. It needs key stakeholders to set aside differences and run the sport not fight each other. It needs strategies and a belief system that says “we will not invest in anything unless we can demonstrably see that our customer (the fan) is better off”.

As someone, who has had a box seat at some of the most spectacular victories and defeats in business and the sport of horse racing that individual cannot arrive soon enough.

© James Berkeley 2014. All Rights Reserved.


Catapulting a Firms Success – Attracting the Best and Brightest

Monday, April 28th, 2014


Many organsiations have well established processes and procedures to attract great people in their core markets. An opportunity arises in a new high growth market and they are fortunate to lure that cornerstone client. Now the tough works start, the organisation can no longer rely solely on “fly-in” managers and client-facing people. There is a need to put boots on the ground. James distills his learning from over 60 organisations around the world into a small number of powerful approaches.

Enhancing Managements Focus on Growth and Expansion of Their Business

Thursday, April 24th, 2014


What do you need to do to take your success in your core market and become a winner in a new market? Stuffed with troubleshooting operational issues and keeping your best clients happy, many businesses overlook and omit to take advantage of opportunities for growth and expansion. James discusses those very “vulnerabilities” management teams face relating to growth and expansion and what they can do to remedy those issues.

Endless Capital Chasing Limited Opportunities

Wednesday, April 23rd, 2014

A phone call from a longstanding friend, who has recently returned from China to Dubai, full of great ideas to provide the mass affluent Gulf buyers with a digital portal to purchase  luxury retail goods at hugely discounted prices, reminded me that today’s challenge for most entrepreneurs is not access to capital rather it is access to great ideas. Travel, observation, ingenuity and self-confidence are the keys to profitable growth. Yet so often entrepreneurs and particularly corporate executives self-limit their own potential.

1. Short-sighted artificial travel bans are randomly applied to rescue management failure or excess (Barclays). Restricting travel, restricts learning opportunities, meeting new sources of innovation and creating new powerful relationships that will positively impact the firm’s productivity, image, growth and ultimately, profit.

2. We are so in love with our methodology and the beliefs that have defined our past, we fail to observe the changes that are affecting our futures (shifting demographics, technological advancement, wealth transfer, customer buying preference and so on). Failure to observe is largely a management failure in most organisations, to hold people to account firstly, for generating new ideas and secondly, applying that creativity (innovation) in the workplace.

3. We overly hold our brightest and best people to account for compliance with endless policies and procedures that stifle creativity, in the name of increased “security” (solvency etc) and minimising risk to the consumer (banks, financial services, insurance, farming etc.). Precisely at the point when technology is accelerating our lives and competition has never been more intense, demanding that we find  new ways to compete, new ways to attract new customers and new, relevant value for our best customers. Indeed many firms’ incentive compensation systems disproportionately reward those, who comply rather than those, who demonstrate high levels of ingenuity.

4. “Self-confidence” largely comes from acquiring the skills and behaviours needed to profitably grow a business. “Experience” is the culmination (the victories and defeats) of applying those skills and behaviours to particular growth initiatives. We don’t grow and become more experienced without trying and in many cases, failing, at first. Economies, governments, industry sectors and corporate organisations, who prioritise investment in and incentivise their people to acquire new skills and behaviours without a fear of failure are more often than not the ones today creating the most impressive growth opportunities (US, China, UK, Germany, pharma, healthcare, hospitality, technology and so forth). That isn’t so difficult to work out unless you choose to ignore the facts.

Most businesses with solid business goals can attract capital. What they lack are sufficient great ideas. When the top management of those firms shoot themselves in the foot, it is time for their Board and significant shareholders to speak up and hold them to account.

© James Berkeley 2014. All Rights Reserved.

Minimising Business Acquisition Expenses

Monday, April 21st, 2014


Standing out from the crowd and creating a siren call to your brand and your offerings is hard to sustain in a high growth market. The inquisitive eyes of your international competitors are often able to move quickly to set up a physical or even a virtual business in a very brief time period. Local competitors are equally able to sharply reduce prices to tempt your high-potential clients and prospects. James takes a tour through a small number of fundamental beliefs that should govern every business executive’s behaviour in keeping business acquisition costs to a minimum.

Dramatically Improving Operating Margins

Thursday, April 17th, 2014


In many high growth markets, traditional practice has been for brands to enter at a high price point and when the competition intensified to launch subsequent lower priced offerings to remain a significant player. For many businesses that approach isn’t open to them today. Drawing on the experiences of Zara, the Spanish clothing brand in China, Melco Crown in the hot Macanese gaming enclave, Ruby Tuesday in the glitzy shopping malls of Dubai and Kuwait City, and other examples, James discusses how to manage the transition while constantly improving operating margins and maintaining a focus on long-term growth goals.

The Fear That Erodes Profitable Growth

Tuesday, April 15th, 2014

Click here for a recent published article  in Global Banking And Finance Review

Changing Customer Behavior and Propelling Top Line Revenue Growth

Monday, April 14th, 2014


With the facts about retail customer behaviour rarely fully known before entering a new market, James discusses how some of his best clients have adapted their assumptions and sort to change the behavior of big spenders in Kazakhstan, Indonesia, Turkey and Mexico and elsewhere, to propel top line revenue growth.

Introduction To Converting Short Term Growth to Long-Term Growth in High-Growth Markets

Saturday, April 12th, 2014


James introduces us to the series and poses two questions: what can and should management do now to balance the conflicting demands on business being made by the need for short-term and long-term results? He examines the key influences on those decisions: customers, shareholders (especially institutional investors and pension funds), key employees and the communities those businesses lead or participate in.