Managing interest rate risk is very crucial for any institution whose balance sheet has a mix of Assets and Liabilities with different maturities. The recent financial crisis has demonstrated the grave interest rate risks that play havoc with the financial health of a company. The capital formation class has really helped me establish a broad based opinion on financial markets, their inner workings, influential factors (economic & non-economic), term structure of rates, long and short term debt instruments – treasuries, money markets, corporate and municipal bonds, Asset-backed securities, A/L management and various hedging mechanisms (derivatives) to reduce risk exposure, financial reform and future outlook for the markets. The class material was exhaustive, taught with current crisis perspective and allowed us to think beyond traditional ways. As part of this class, we did a paper on forecasting interest rates for a hypothetical company with a simple balance sheet (various short & long term securities), assessed Asset/Liability  risks, measured rate risk using GAP, duration, scenario analysis (including Black Swan events) and Value at risk methods and recommended hedging strategies to alleviate rate risk.  It was a very challenging engagement and I’ve really enjoyed every moment of it.

Paper1 – dealing with interest rate forecast for Hatchet Financial Co.

Risk management application provides the ability to identify risks, determine characteristics of risk emergence, allow measurement through control systems, and apply enhanced project management methods for improved achievement of project and stakeholder goals throughout the life of a pipeline project. Risk reduction and risk management both are the key to improving project management and developing success metrics.

Listed in the excel sheet are some of the risks that I’ve identified for Daniel Sports Company. Daniel Sports is a growing company which supplies cricket bats to customers in greater Washington DC area. The company imports the readymade bats from Barbados and makes use of student labor for receiving, and delivering to clients. I have classified them based on project specificity and context and assigned them a probability, impact, risk exposure, mitigation approaches and contingency plans. Listed below are the risks identified: After identifying all the potential risks, I quantified the risk based on probability of occurrence and impact and then proposed strategies for responding to risk and finally a plan to monitor them. I’ve assigned only 3 scales 1 being VH (very high), 3 being MH(medium) and 1being LH(lowest).

Probability-Impact matrix

Project Specific factors

Delivery/operation risk: The ability to overcome the risk of delivering and operating the project as conceived.

Technology risk: The ability to overcome the technological risks of the project.

Financial risk: The ability to overcome the financial risk of the project through to final completion and operation.

Procurement-contractual risk: The ability to overcome the risks associated with the procurement of, or contracting for, the execution and operation of the project.

Project Context Factors

Political risk: The ability to overcome the political risk of the project, including local, state, and national political opposition and code and regulatory impediments.

Environmental risk: The ability to overcome the environmental risks of the project.

Social risk: The ability to overcome the social risks of the project.

Economic risk: The ability to overcome the economic impact risks of the project.

Identifying key risks associated with the achievement of all project objectives in terms of cost, time, quality, environment and safety is very critical for any project success. A properly planned risk management plan will help reduce the likelihood of risk from occurring and put the project on the path to successful delivery.

This a classic case that is predominantly faced by global project managers who work with culturally diverse project teams with whom they share no similarities. According to PMBOK, a global project manager must require an ability to communicate, facilitate, negotiate, plan, budget, organize, motivate, manage, measure, monitor, think laterally and make decisions, which are predominately social activities. So before venturing out on any project a global PM must do a complete scan of social, economic, political, cultural and technological factors so that he is better prepared to mitigate challenges posed with global projects.

A careful analysis of this case reveals a gross lack of cross-cultural knowledge, personality stereotyping, miscommunication and poor decision making ability. The level of cultural awareness shown by Fred was not high enough to identify some of the more prominent cultural challenges, which were also consistent with the cultural dimensions showing the greatest gaps. Recent research has shown that it is not only important to try and understand the local culture, it is also important to identify the differences between that culture and the project manager’s own. During this process, the manager must be fully aware of the differences with cultural dimensions of environment, action orientation, emotion, language, space, relationships, power, thinking and time. The greatest problems and challenges reported were associated with the four cultural dimensions of thinking, power, time and emotion.

In terms of culture and diversity, the following factors are of great importance. They have to be understood in great detail, must appreciate the dissimilarities and leverage them as opportunity to build a culturally diverse team capable of achieving the project goals.

• Universalism vs. Particularism

Fred seems to share the belief that rights of the organization prevail over rights of a specific friend. In a predominant particularistic society like Japan, the rights of a friend i.e. employees is taken to be more important than the rights of the larger community.

• Individualism vs. Communitarism
  Fred belongs to a highly individualistic culture where people are expected to make their own decisions and to take care only of themselves and their close family whereas the Japanese Communitarism societies are firmly integrated into groups which provide help and protection in exchange for a strong sense of loyalty.

  Specific vs. Diffuse
  Fred seems to be very specific with whom to build contacts and less explicit of what he or she expects from the work relationship.

  Neutral vs. Affective
  Fred was inadvertently neutral and reluctant to show what he felt while the Japanese being affective prefer to show spontaneously how they feel and to act accordingly.

  Achievement vs. Ascription
  Fred believes in achievement, a social status resulting from the individual´s success in building up a life of his / her own while the Japanese believed in ascription social status dependent on one´s descent, sex, age, or affluence.

  Time Orientation – Past, Present, Future
  Japanese culture is rooted in past and bases its future on past events while Fred comes from a culture oriented towards the future.

Internal Control vs. External Control
Fred has a predominantly mechanistic view of nature, people are seen as influencing the environment and not vice versa. Whereas the Japanese believe in an organic view of nature, meaning men / women are subjugated to nature´s dynamics & forces.

I will base my solutions on the analysis above since it reveals the fundamental root cause for the failures encountered so far by Fred.

1. I. You are Fred, what should you do now?

Solution: The Japanese assignment is a big career jump for Fred that comes packaged with tremendous benefits and a promotion as managing director of Tokyo operations. This is an incredible deal and Fred has to make best use of this opportunity. Apart from the dissatisfaction from his wife and ongoing setbacks at office, Fred had not lost the game totally. He still can turnaround the situation and can position himself as a successful project manager as he proved before. So, in my opinion Fred should undertake this challenge and work hard to resolve the pressing issues at office and at home. Since Fred left the United States without much orientation or understanding of the Japanese culture, he had to face difficult situations on an on-going basis. He felt helpless and thought he was interacting with people from outer planet, could not openly communicate and understand their motives or thought processes. All this happened due to lack of cultural awareness, work ethics, and too much indulgence in task-orientation and not relationship building. When communication modes cross, miscommunication, unintentional messages, misunderstanding and frustration often result.

Fred in order to salvage himself out of this mess must work hard and take time for looking at possible differences and their consequences during the Start-up phase. Learning about cultural differences takes place at several levels: at the organizational, project level and on a personal level.

Typical activities could be:

• Developing an understanding of each other’s cultural perspectives,
• Must develop consciousness of the roots of cultural differences, to assess their impact, and to build structures, procedures and a working environment which promotes cultural synergy.
• Breakdown hierarchical management style and concentrate more on relationship building. Avoid generalizations.
• Finding out risks to avoid and opportunities to exploit,
• Jointly defining project goals and schedule,
• Defining an organizational structure for the project that takes cultural differences into account.
• Delegation of authority, responsibility and power is central for motivating and engaging project teams.
• Open up channels of communication, loosen control and solicit feedback from employees. Share business values with Japanese clients – of maintaining a peace and harmony rather than a candid exchange of opinions, arguments or confrontation. It was for this reason that the client sent their human resources head to develop that bonding initially.
• Arrange for additional meetings two or three meetings to understand the honest opinion of the other party. Agree up front on the rules of engagement and policies to do with managing mutual expectations and managing changes.
• Fred was trying to implement task-driven project management style in relationship-oriented cultures, since he was more concerned with schedules and results than creating time and opportunity for building personal relationships with other project participants. He should concentrate more on harmonious relationship building exercises.
• Eliminate uncertainty from employee tasks and responsibilities. Japanese prefer uncertainty avoidance.
• Understand the different perceptions of fundamentals of project management, especially time. Seek honest feedback about timelines and readiness before thrusting tasks on employees.
• Establish clearly defined roles and structure. Have social interactions with employees, better understand their preferences and perceptions deviate from individual achievement and instead recognize group effort. Make effective use of American employee who can understand and speak fluent Japanese.
• On the home front, he can hire some domestic help with sound English speaking skills who can act as a language interpreter, has rich local knowledge of shopping for groceries cheaply; can provide insight for outdoor activities and social events.
• Hire a language expert as coach who can train both Fred and his wife on Japanese language skills, customs and generally acceptable “behavioral” skills.

II You are Dave; Fred called you to discuss the situation. What should you do now?

Solution:

Dave has strong faith and trust in Fred’s abilities as a successful manager. It was this confidence that made him offer this challenging assignment. Fred has a proven track record of successfully managing projects earlier and so should approach Dave with lots of optimism. He should not be weathered by the initial setbacks and instead should provide confidence and faith in meeting the project goals. Some of these actions include:

• Keep Dave abreast of the developments taking place in the Tokyo office. Provide him a detailed report of the progress made so far and the obstacles he has been facing.
• Inform Dave of your sincere efforts to win the new client deal and the lack of response from the client.
• Let Dave know of the cultural polarization existing in the Tokyo office and his inability to break the communication barriers
• Make Dave aware of the lack of formal training in Japanese culture, language and work ethics. Talk to him about the social isolation faced by his family and the difficulty in procuring basic grocery items.
• Request Dave to provide a global coach who can assist him with understanding the cultural differences, negotiation tactics and advise him of “do’s and dont’s” in Japanese culture and society. This can be useful for his wife too.
• Update Dave on the process improvements being made at organization and personal levels to improve communication, his efforts to learn and respect the cultural differences and his efforts to breakdown cultural challenges he is facing now.
• Seek complete support and backing from Dave, any additional resources who have been in such situations for knowledge sharing and any kind of external help which might help him in his efforts to lead successfully.

The above efforts will reinforce the confidence in Fred and Dave will definitely acknowledge and appreciate the efforts being made in this direction.

1. II. Turn back the clock to when Fred was offered the position to Tokyo. What should have been done different, and by whom?

Solution:

As evident from the case, Fred seems to have lacked any exposure to cultural diversity going by his recent project accomplishment in San Franciso. So Fred’s beliefs on cultural dimensions were in direct conflict with the Japanese and he had no clue about it.  The initial analysis discussed in this paper clearly shows how from the get-go Fred was unfit to manage a culturally diverse group of individuals.

So when he was offered career promotion and benefits, it was a deal he could not refuse. He had some resistance from his wife, but finally accepted the offer assuming that the assignment would not be so difficult.  So in haste he had to make arrangements for the transfer move and he had no time to learn about the Japanese culture, traditions, work ethics and their perceptions towards management. His only source of information was the encyclopedia. His family too was abruptly disrupted leaving no time to build expectations from this new move. All this eventually turned into a big frustration for Fred. His efforts to establish the new business was in vain and he received no co-operation from the Japanese staff. He was helpless and desperate to find answers to his situation.

From the onset when he was offered the position, a lot could have been done to overcome the grief he was in. Some of my suggestions include:

• Fred could have delayed his posting date until he felt ready to undertake this challenge. This delay would have provided him the opportunity to plan the big move, research and learn about the Japanese culture, request local expertise to help out with language interpretation, grocery shopping and exploring western social joints where they can spend some quality time without getting bored.
• Fred must have undergone some training on negotiations and dealing with Japanese businesses. This could have helped him understand the client expectations and in building mutually compatible business values.
• Fred must have thought of looking out for some part-time job opportunities in Tokyo for his wife Jennifer so that she is busy with her lifestyle in Japan. He also could have arranged in advance for some American cable channels at home so that they stay in contact with happenings at home.
• Fred must have held some initial consultations (over phone or virtually through we conferencing etc.) with overseas staff so he has a feel for their priorities and commitment.  He should have contacted the American staff with Japanese skills so that he can understand in depth the work ethics of his Japanese counterparts.
• Fred should have developed a clear understanding of the various cultural dimensions and how his beliefs fit or differ with those of the Japanese. He must be aware of the dimensions of environment, action orientation, emotion, language, space, relationships, power, thinking and time.
• Fred must do a complete scan of social, economic, political, cultural and technological factors so that he is better prepared to mitigate challenges posed with global projects.

These are some of the prerequisites which must have been met before Fred embarked on this exciting undertaking in Japan.

1. I. Make a list of reasons when you would or would not accept a foreign assignment for one year or longer.

Solution:

Reasons to accept a foreign assignment

If I put myself in the shoes of Fred, I would be terribly excited about this new assignment. Though my decision will benefit me the most, it may or may not have the same degree of acceptance from the family members. Here are some reasons to accept this assignment:

1. A great career move – incredible compensation, benefits and the lure of promotion to a Managing Director position
2. Opportunity to acquire and build new skills and experience of working in a global environment
3. Exposure to deal with challenges in culturally diverse groups , interact with stake holders and clients from different cultural backgrounds
4. Children will be exposed to diversity – a new school environment, new friends and adaptation to new culture and society
5. Experience new culture, food and overall the excitement to be with doing the abnormal way.

Reasons not to accept the assignment

Though the assignment looks exciting and quite appealing, it comes with its own baggage of problems.

If I were to reject the assignment it could be for the following reasons:

1. Disrupting family life and ending up scrambling to re-settle lives in a completely, strange new country
2. Fear of failure due to lack of cultural awareness and hidden risks. May ruin the reputation and credibility built so far.
3. Lack of preparedness and inability to put in new efforts and hard work to learn new language and culture
4. Strong resistance from family members to relocate
5. Inability to meet expectations of a smooth and decent life in the foreign land.

According to PMBOK guide, Project quality management includes “all activities of the overall management function that determine the quality policy, objectives, and responsibilities and implements them by means such as quality planning, quality assurance, quality control, and quality improvement, within the quality system”. Quality planning has quality policy, scope statement, product description, standards and regulations and other process inputs. But unfortunately in international projects, culture plays a critical role in influencing quality objectives. People’s perceptions about quality is not universally similar, instead they tend to differ from country to country and within a country among various regions and amongst various projects. So as a global manager, there is a greater need to understand these perceptions of quality devise standard quality processes and monitor them on a regular basis in order to succeed. The recent recall of Toyota has been attributed to lack of quality management owing to the company’s failure to integrate various quality check points due to global procurement from many vendors. Corporate governance was lacking and there was no standard message that was communicated across all subsidiaries within Toyota.

In a project context where you find differing perceptions towards quality, the Johari window is a tool that can be used to measure 4 different possible states with regard to knowledge of one’s culture, and the understanding of other cultures in the project team.

In the IPMA article , “Managing cultural boundaries in projects”, the author Susan Vonsild has clearly stated how when people of different cultures meet in projects, they will have differing perceptions of authority, responsibility and accountability; sense of urgency and attitude to planning, commitment, conflict, risk-taking and agreements, and contracts. However, few of us are completely aware of how our actions – and ways of thinking – are dictated by more hidden or in fact unconscious values. Those differences arise because of the specific cultural experiences we grow up with. For example the quality check for a completed task may just mean conducting unit testing for someone in one country while the same task may imply unit testing, application testing and system testing for another person in another country. So these perceptions need to change so that the global team can deliver the desired product according to the customer’s expectations. In order to achieve that objective, the global manager must do the following:

• Understand the client’s requirements for quality and then meet those requirements. Define the meaning of quality that defines the characteristics of quality on your specific project and works universally. Pay attention to the distinction between the objective and subjective aspects of the quality definition.
• Create a “transcendant” culture for their organization that sits above regional or national culture. Ensure that excessive perception gaps do not exist between management, supervisors, and stakeholders. Try to bridge the gap by holding virtual meetings, discussions and open feedback.

• Define the detailed components of the transcendental framework with some defined locally.
• Identify business methods or practices that unify people in the face of cross-cultural diversity. Appreciate cultural diversity, specifically values and beliefs, and underlying assumptions
• Recognize that local cultures are really expressions of how people think, work and act with respect to each other. Tap into that and accordingly establish quality standards.
• Use cultural diversity to meld together into a global presence that presents a consistent ‘corporate image’ recognizable everywhere. Also accept local diversity, respect it and look for other sources like gender, age, differences in personalities and institutional environments
• Individual and team activities and the attitudes of people toward service of customers must align with the local culture to achieve harmony in the alignment with the external stakeholders: customers, suppliers, partners, and local governments.
• Establish Governance so that you make sure people follow quality standards in the framework defined. Develop metrics to measure progress of quality initiatives. And establish performance benchmarks that measure cross-discipline and cross-divisional perceptions as a baseline for cultural change

• Conduct training so that all team members have the necessary skills to understand, apply and monitor the quality standards. Communicate goals and objectives in a consistent manner throughout the quality planning phase.
• Coordinate information exchange and work progress with team members. Keep employees motivated and engaged.  Ensure communication is clear, concise and open so that all views, opinions and ideas expressed are acknowledged and discussed in a candid way.
• In instances where perceptions don’t change, then change has to be introduced through external stimuli. Adequate reward and recognition systems must be in place to encourage adherence to quality framework. Anyone exceeding the set standards should be recognized and rewarded so that it sets an example for others to follow.

By placing emphasis on understanding and respecting cultural roots, a global PM must assume a delicate balance in communicating project goals and quality objectives and at the same time must exert influence to change their deep rooted perceptions. This can go a long way in creating an effective quality plan which will ensure the success of any global project.

As part of our term paper in Business Ethics, we researched the Satyam Scandal, the largest corporate accounting scandal to date in India, to find out the ethical and moral collapses that occurred, the psyche of the key executives and what we can learn from it. It is amazing to know that in spite of all these scandals brought to limelight there has been little evidence to suggest that change has taken a strong foot hold. Executives still indulge in gross ethical violations and we hope the reinforcement of ethical code of conduct and fostering a culture of trust and integrity will bring about the much needed change in organizational and executive behaviors.

Research paper - The Satyam Scandal

Values and ethics are a part of our everyday lives. We wake up to these values and beliefs each day as they are the “rules” that govern us. Ethics is not just about morality; it is a complex dimension of personal and corporate life that can lead to higher performance by both business and society. Individual experiences of values and beliefs stem from the personal point of view, a cultural perspective all the way to an organization perception. Although we hear a lot about immoral and unethical practices from various quarters – corporate, societal and personal, I am lucky to have worked with some great managers who stood by their value systems and challenged unethical behavior risking their own jobs. In this paper I will focus on an ethical action taken by Mr. Madison, Director of Higher Education Consulting, XYZ Corporation to illustrate how possessing good ethics can have a positive effect in the workplace. XYZ Corporation was known in the industry for fairness, integrity and credibility. I was part of the team managing the project schedule and implementation effort on this project.

While heading the implementation of a new financial application at Oregon University in 2001, Mr. Wilson faced a difficult ethical dilemma. As part of the new IT infrastructure, a web based application was developed using a new programming technology. The company engaged consultants and utilized most of the funds allocated for building this application. The software was not yet proven to work seamlessly as per the client’s requirements. In addition, there were many quality issues – design flaws, programs failures under simulated conditions, data corruption etc. If the software got deployed to production, there would be major operational issues and severe financial damage to the client. The client was deliberately insulated from these issues to prevent any re-work connected with quality issues. Because of the over-extended commitments made by XYZ corporation during the contracting process, the company was obligated to deliver this application on the agreed upon date and the date was nearing. The company vice-president gave the approval to go ahead with the deployment. At the time this decision was made, XYZ Corp. was struggling with falling revenues and shrinking markets due to the dot-com bust. The company could not afford to lose any existing contracts to competitors, but at the same time executives were instructed not to exceed any estimated budgets and look for additional revenue generation. Mr.Madison was surprised to hear this decision and knew how it would violate the company’s ethical principles and negatively affects their client relationship, employee productivity, job satisfaction and trust in other fellow employees. A devout Christian with strong cultural and family values, Mr.Madison felt that the decision also conflicted with his own personal morals – of being truthful, honest, caring, fairness and loyalty.

Being a certified project manager, Mr. Madison has to abide by the code of conduct from the Project Management Institute. Turn a blind eye to evil, and you may not be an accomplice. But you’re an enabler. Regardless of how the decision impacted, Mr.Madison could not compromise his principles. He took on the challenge of questioning the executive management about the unethical decision made and was willing to risk his job than act unethically.

After repeated attempts to convince his company not to deploy the software, Mr.Madison ended up disclosing the serious flaws prevalent in the web application to the client. He brought this matter to the immediate attention of the client since it violated contractual terms and his professional ethics. XYZ executives were more interested in the financial stability of the company and ignored the calls for strict quality checks. Mr.Madison took the decision in the interest of his company and moral self –to withhold company’s ethical values, maintain credibility and stay true to his personal values. The client immediately responded with a thorough review of the application development process, forced the company to fix the design issues and perform joint integration testing with the client. Even though the experience initially was uncomfortable, by complying with the client requirements and being outspoken about the glaring defects and taking the client into confidence, the project got extended and the contract was renewed for two more years. We often make small ethical compromises for “good” reasons: We lie to a customer because our boss asked us to. By relying on his moral principles and professional ethics, Mr.Madison prevented XYZ Corp. from ending up having a sour business relationship with the client. The company was able to reinstate trust and confidence among employees and adherence to ethical code of conduct was made mandatory.

Ethical Dissonance

In this particular case, Madison’s ethical principles were in conflict with the organization’s policy. His decision to expose the quality flaws were based on his own value system and ethical principles rather than on the organizational norm. Hiding the truth, lying blatantly and deceiving someone are gross violations of good practices. His belief in right or wrong can be traced to his family roots, religious and cultural influences. As a loyal employee bent on upholding the company’s reputation, he revealed the problems to the client because any reconciliatory measures taken as a consequence will create positive outcome for the company. Though in the near term the company will be forced to spend more to fix the software which will put additional financial stress on a struggling company, but in the end, being fair, honest and candid led to a sustainable business relationship.

On the contrary, the executives argued that their actions too were in the interest of the company. They were under tremendous pressure not to exceed budgets and not to incur any additional costs due to quality issues; they tried to hide facts and instead pushed for delivering a faulty software product. To them, saving the company from additional expenses was the right thing to do. They turned to unethical behavior and denied their own moral principles to take effect. Their perception of “good” has a different meaning and they tried everything in their means to oppose the views of Mr.Madison. Instead of contradicting Mr.Madison, the company should have addressed this issue on ethical terms and changed the way it does business in this situation. Minor ethical lapses can seem harmless, but they instill in us a hard-to-break habit of distorted thinking. Ethical decision making is the foundation for any sustainable business that will help realize the best values present in employees and transform business relationships.

Many people find their personal, cultural and/or organizational ethics conflicting and must reconcile a course of action that will mitigate cognitive dissonance. To uphold these values, one must reconcile these conflicts on a daily basis and continually move forward while maintaining personal integrity and balance. Ethical decision making provides opportunities to most affect our own happiness and to have the most positive effect on those around us and achieve the peace and happiness that are so threatened in these tumultuous, ethically-challenged times. In the long run, a company will reap great profits from a customer base that feels it is being treated fairly and truthfully.

This paper is intended to be a reflection of my learning experiences so far and there is no question that that the course has left a deep impact on my critical understanding of human capital as a strategic asset to an organization. We had clear expectations from the class and it was all well laid out in the syllabus. As future managers, we learnt how to align HR with business strategies, understand impact of external and internal environments, design HR systems to promote positive behaviors among employees, establish staffing and compensation systems to attract, retain and motivate best employees, understand employee relations, manage change during difficult times and leverage these strategic HR skills that add critical value to corporate decision-making. The recommended textbook was very practical and explained the importance and application of HR practices as they stand in the real world. Instead of dwelling into the theories and concepts with no clue about their intended application, the book explained the reading goals of each chapter, their strategic importance, techniques, best practices, various perspectives, emerging trends and challenges in a global environment. The use of real-world examples along with the case studies really closed the learning loop.  The professor was very knowledgeable, highly motivated and inspiring. He was very receptive and understanding whenever you approach him with any questions or concerns. The learning aspects were unique from a traditional setting in that the students took the collective responsibility to learn by sharing their individual experiences, knowledge, skills under the expert guidance of the Professor. I really felt that this approach left memorable experiences for each of us. The class setting fostered and promoted a collective atmosphere where ideas, thoughts, criticisms, were freely exchanged leading to desired consequences. The Socratic style of teaching helped us to critically reflect on the topics, engage in team coherency and facilitated mutual learning. The organizational practice cases made us understand the prevailing practices in various organizations, HR situations, problems and issues as they emerge.  The case or “Story” presentation made us think critically, explore options and address situations with specific solutions.

But as we went along, every session turned out to be exciting, rich with individual’s experiences and critical thoughts about the topics discussed. What I felt great about the class was the constant feedback and review exercises we had and the expert facilitation by the professor.

A brief synopsis of the topics we learnt includes:

1. Employee Selection – Strategic importance of selecting right individuals to fit the job and the organization, designing such systems, techniques for assessing job applicants, legal considerations and challenges with recruitment.
2. Performance Management – Strategic importance, Responsibilities of HR triad for performance management, ways to measure performance and feedback, appraisal formats, rating processes and current issues
3. Performance based Pay – Strategic importance, design choices, implementation of performance based pay, recognition, rewards, merit pay, types of incentive pay, global variations and challenges
4. Fair treatment and Legal Compliance – Strategic importance, perceptions of fairness, employment laws, dispute resolution techniques and current issues
5. HR Planning for alignment and change – planning process, scan and assess environment, various HR objectives and metrics, develop HR plans, implement action plans and address current issues

Every topic that I learnt could be related to my own work place and seem to blend in with my organizational culture.  Human resource management has been changing over the decades and new trends are emerging showing the strategic importance of HR (Human Capital) to drive competitive advantage. The roles and functions of the HR Triad – Line Managers, HR Resource and Employees are critical for any organizational success. The steps to selecting the right employee; performance management and evaluation; relative importance of merit, ability and seniority when promoting employees; job analysis and its value; labor laws under the EEO, Affirmative action, managing diversity, talent management and retention; employee motivation, accountability and loyalty; ethical and moral issues; fairness and equality; discrimination and diversity are of utmost importance to any one who is managing employees.

I even had the opportunity to discuss my work-related issues with the professor to gain his expert advice and seek remedies to the problems I am facing at my work place. I was really happy with the conversation I had and planning on putting into action the valuable suggestions made by the professor. My work-place experiences dealt with most of the issues an individual would face diverse organizations.

Overall, the course was very informative, instilled critical thinking and developed the competencies required to manage people in an effective way. One added benefit was the formulation of strategies to establish workplaces that are efficient, effective and meet the organizational goals. Every Organization must fully utilize the unique and individual characteristics and strengths that individual workers offer.

HR should plan for the future, identify current and future needs, train workforce to face the next biggest challenges. Astute organizational behavior combined with effective HRM should result in greater business effectiveness.

Jim Hagedorn

Chairman and CEO
The Scotts Miracle-Gro Company

Jim Hagedorn, CEO of Scotts Miracle-Gro Co served as president from May 2001 to December 2005 and from November 2006 to October 2008. At Miracle-Gro, Jim had served as executive vice president and was a major architect of Miracle-Gro’s success both in the U.S. and in the UK. Following the merger, he was instrumental in the effective integration of the two businesses and served as head of the Company’s North America business. Additionally, he served in the United States Air Force for seven years, where he was a captain and an accomplished F-16 fighter pilot.

The Scotts Miracle-Gro Company has a long history dating back to 1868 when it first got started as a grass seed company. Now it is the world’s largest marketer of branded consumer lawn and garden products and has a culture that values honesty, integrity and transparency. The company cares deeply about the health and well-being of its 8000 strong associates and their families, and ensures that they lead long, healthy and happy lives. The corporate culture highly values innovation, entrepreneurial spirit, flexibility, collaboration, accountability and moral conduct.

Jim Hagedorn has shown remarkable leadership and passion in his attack on health-care costs.

After seeing health insurance costs continually rising – seemingly out-of-control and realizing the lack of efforts from the government and health-care industry to fix the current system, Jim decided to act. He felt it’s up to employers — who foot the bill — to make changes. He made valiant efforts to not only get its employees to eat and live well but also makes them accountable for their actions. The primary motivation for doing was to control escalating health care costs while improving the long-term quality of life of employees.

Jim Hagedorn is known for his determination and commonsense policies incentivizing his employees. Jim’s decisions are based on the harsh reality that our workforce apparently lacks the basic self-discipline to control its caloric intake and exercise every week.

Scott made significant investment in improving employee health. These include free doctor care, access to a low cost fitness facility, access to dieticians, free generic prescription drugs, and of course, free smoking cessation programs. Scotts Miracle-Gro is a great example of a company that has gotten workplace-wellness programs right. Jim is also credited with some controversial initiatives, like asking for detailed medical histories of employees, and potentially firing an employee who failed to stop smoking.

Scotts is in the vanguard of companies seeking to monitor and change employee behavior. Jim was able to motivate and influence employee behaviors at Scotts and demonstrated true emotional intelligence – He had the right mix of all the EI components – self-awareness, self-regulation, motivation, empathy, social awareness and managing relationships. He was self-aware of the potential health dangers from obesity, smoking and diabetes. He lost his mother to lung cancer and instantly gave up smoking after realizing the grave consequences of smoking. He was able to cut medical costs, persuade employees to take better care of themselves without killing morale and spawning lawsuits.

Jim employed various EI styles as he tried to change employee behaviors. He understood the reasons behind rising health care costs and took the bold step of dictating the personal habits of those lesser than himself. Jim knew the complexity of the issue and he was always probing, sensing and responding to build the dynamic capabilities amongst employees. In relation complexity leadership theory, I see adaptive, administrative and enabling functions on the part of Jim to introduce this disruptive innovation of employee wellness program, a business model innovation to lower healthcare costs.

When Scotts doubled what workers paid for health insurance. Morale plummeted, and Hagedorn knew he had to do a better job selling the hike. He applied affiliative style and held straight talk sessions with employees to heal the rift and explain them what he was up against – the rising health costs climbing at a double-digit rate. He laces his sermons with salty language and unvarnished commentary.

Jim sought legal and HR expertise when he wanted to ban smoking and go after obesity. To achieve these aims, he proposed launching the kind of companywide intervention that families use to help an addicted relative. His wellness programs had Big Brother overtones. But he was adamant about bringing down health costs—even if it means being authoritarian. “If people understand the facts and still choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.” He acted as a commanding leader to enforce new policies and fire people who did not give up smoking.

His instructed key executives to sell his initiatives and ready the employees for desired outcome. His visionary style coupled with coaching restored integrity, confidence and trust with employees. To motivate people, he incentivized employees for healthy outcomes and emerged as a pace-setting leader.  As a democratic leader, Jim valued inputs and commitment through employee participation at quarterly meetings.

Jim has been highly successful in -

Getting employees involved

Scotts’ wellness program began with CEO Jim Hagedorn’s honest and straight-forward approach with his employees.

Hagedorn wanted employees to know what he was up against. Using a PowerPoint presentation, he showed that his annual health-care bill had soared 42% since 1999, to $20 million, which amounted to 20% of the company’s net profits in 2003.

Getting employees policed

Enforcing workplace programs especially related to such personal matters as smoking and eating is always a tricky issue, but Hagedorn, a former F-16 pilot was not one to be discouraged. Hiring a third-party firm to prevent managers from discriminating against subordinates, he managed to institute a smoking ban with the understanding that “If people understand the facts and still choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.” choose to smoke, it’s suicidal,” he says. “And we can’t encourage suicidal behavior.”

Getting employees the resources

Well, talk about fitness is cheap, but Hagedorn puts his money where his health is:

During one of Hagedorn’s straight-talk sessions, workers told him a company gym would make wellness easier to swallow. “Done,” Hagedorn said. But his vision went far beyond installing some StairMasters and throwing up health pointers on the Scotts intranet. Hagedorn built a soup-to-nuts medical and fitness center across the street from headquarters. Operated by Whole Health, the 24,000-square-foot facility cost $5 million and can meet pretty much any health-related need an employee might have, including a drive-thru for free prescription drugs.

When employers don’t stop at just making recommendations, but go that extra step to actually provide a convenient, usable service, everyone benefits.

Get employees accountable

Of course, you can provide the world of benefits to employees, but that benefit is only going to be as good as its usage. This is why:

Scotts’ employees are now urged to take exhaustive health-risk assessments. Those who balk pay $40 a month more in premiums. Using data-mining software, Whole Health analysts scour the physical, mental, and family health histories of nearly every employee and cross-reference that information with insurance-claims data. Health coaches identify which employees are at moderate to high risk. All of them are assigned a health coach who draws up an action plan. Those who don’t comply pay $67 a month on top of the $40. “We tried carrots,” says Benefits Chief Pam Kuryla. “Carrots didn’t work.”

It’s time people realize that their habits don’t affect just themselves but others too.

Getting employees motivated (and rewarded!)

Often Hagedorn will walk around motivating people and making sure people are on the right track. He walks around campus joking, slapping guts, and exhorting people to work out. And with rewards aplenty for good behavior general wellness at Scotts is only going one way – up:

The nudging begets peer pressure. Gym rats earn special pins they display on ID badge lanyards; these have become a coveted status object. Competition for trips to Hawaii, free massages and facials, and other cash and prizes is fierce. One group of employees started having lunch together every day to keep each other from peeling out of the parking lot for a smoke. Doughnuts have disappeared. “The message is: If you’re not trying to do something to make yourself better, then you’re going to pay more,”

Getting employees results
The best part of any program is seeing the results right before your eyes and employees of Scotts are luck to be able to do so:

So far, the company says, more than 70% of headquarters staff belongs to the fitness center. The smoking-cessation program has already had a 30% success rate. The wellness program, which costs $4 million a year to run, is a financial drain. But the company expects it to pay for itself in three to four years.

The Challenges from Tough Decisions

The wellness initiatives raise some controversial questions – One is that people could start blaming unhealthy colleagues for helping push up premiums. Then there are the privacy and discrimination issues: How far should managers intrude into employees’ lives?  Scotts has so far been able to avoid getting entangled in any legal issues and employees have whole heartedly supported the medical assessments keeping in faith the privacy safeguards.

Some of the initiatives he introduced include:

• Opening a $5 million fitness and medical center at company’s Marysville headquarters. The clinic employs two full-time doctors, five nurses, a dietician, counselor, and two physical therapists.
• Mandatory health assessment, have it evaluated by medical professionals and then follow recommendations to improve their health.
• Enforce higher premiums on employees who choose not to take the survey and those who don’t follow the recommendations
• Force employees not to smoke — even off the clock.
• Access to medical center for doctor consultation, personal and prescription drugs.
• Offer discounts on health-care premiums, free weight-loss and smoking-cessation programs, gratis gym memberships, counseling for emotional problems, and prizes like vacations or points that can be redeemed for gift cards.
• Use data-mining software, Whole Health analysts scour the physical, mental, and family health histories of nearly every employee and cross-reference that information with insurance-claims data.

The wellness efforts of Jim Hagedorn have paid off, employees fiercely compete for corporate rewards instituted for following healthy habits. So far, the company says, more than 70% of headquarters staff belongs to the fitness center. The smoking-cessation program has already had a 30% success rate. The wellness program, which costs $4 million a year to run, is a financial drain. But the company expects it to pay for itself in three to four years. Other large companies have seen a 3-to-1 return on investment in their wellness programs.

The workplace is an ideal place to have a great impact on healthcare costs. First, they become aware of their personal physical problems, learn how to improve those problems and have support during their personal program. Then, the fiscal health of the company is improved when the health of each employee is improved; thus, the company is enabled to continue providing jobs for its employees. Wellness programs are a win-win solution for employees, employers and our country’s economy.

Behaviors(dysfunctional) existent at IBM

Despite having talented workforce, great technology and a sound strategy, IBM was underperforming and was suffering from near collapse before Gerstner took over. Unfortunately, the culture that was prevalent at IBM was that of arrogance. It was not in tune with the times and with customers’ needs.

Gersner was able to quickly diagnose the problems at IBM and sought to find immediate remedies to fix the shortfall in revenues and stabilize the company, make good strategic choices and turnaround IBM.  But there were some behaviors which Gersner found unacceptable. These include:

• Large dysfunctional bureaucracy, committee decisions, tacit compromise and actions committed to serve group interests. IBM had a dress code that again had outlived its times. Management presided rather than acted. Meaningless meetings, far-flung business units operating independently, with little accountability, divisions competing  against each other both internally and in the field and the entire company was dangerously preoccupied with itself rather than customers.
• Obsession with perfection, system of several layers of checks and approvals, slowed down decision making and delayed product launches and response times. Employees served themselves better than their customers.
• The company and its people had lost touch with external realities. It was widely believed that what was happening in the marketplace was essentially irrelevant to the success of the company. “IBM’s dominant position had created a self-contained, self-sustaining world for the company.

IBM was mired in the tradition and culture of its own success, it was unable to respond to the pace and behaviors of the new economy. Customer service absolved itself from paying attention to customers’ needs and business. Employees perceived employment at IBM as “life-long” with ensured benefits. Product portfolio still focused on products which were losing market share and had no bright future in a networked model of technology. New Kill initiatives which provide new direction were killed in works if did not receive consent from other units. Compensation system was focused on fixed rewards, commonality, internal benchmarks and entitlement. This culture insulated IBM and it employees from market realities and the emerging competition from “client-server” technology, emergence of PC’s and high pricing of  IBM products signaled the death spiral for IBM. IBM lost market share and was running into losses. The mainframe segment was falling apart and the company was struggling to survive.

Gerstner completely transformed the culture of the organization through, for example, modeling desired behavior and abolishing IBM’s notorious dress code to reflect better the attire of their customers. He took the bold step of listening to customers and cutting the price of their cash cow, the 360, to raise cash. Performance based pay and differentiation was introduced. Compensation was not tied to business unit performance, rather was based on company performance. He made strategic decisions towards service-oriented, network-led business transformation. Customer focus was given top priority followed by company interests. Most of the efforts paid off and IBM turned profitable after few quarters.

Behaviors(postitive) at IBM

IBM had a great culture of respect, hard work, and ethical behavior. It was known as a leader in diversity. Employees take pride in commitment – committed to their company and committed to what their company does. These values were engrained and institutionalized by the early founders at IBM.

• Excellence in everything IBM does
• Superior customer servicer
• Respect for the individual

These beliefs were reflected in compensation and benefits systems, in training programs, in marketing and customer support. The three behaviors which Gersner found acceptable were:

• Ability to provide integrated solutions for customers, handle internal complexity – a great talent pool, experience, knowledge, maturity, and character.
• Employees who never give up on their company, their colleagues, and themselves – Are energized, motivated and stimulated, who demonstrate commitment towards company goals.
• IBM’s existence as a whole was the only competitive advantage IBM had and Gersner believed that the breakup was not needed.

Vision and strategy

Mr. Gersner was a visionary who could see the future and predict opportunities. He exposing that “vision is not the same as “strategy. Fixing IBM was all about execution. As Mr. Gerstner stated, “We had to stop looking for people to blame, stop tweaking the internal structure and systems. I wanted no excuses. I wanted no long-term projects that people could wait for that would somehow produce a magic turnaround. I wanted – IBM needed – an enormous sense of urgency”. He did not form any long-term strategic plan, but took strategic initiatives and implemented them for the short-term. He believed that a long-term vision for the company will emerge from the essential restructuring work and needed to cope with the sheer stuff of the rescue plan before he can get to grips with my new vision. He understood the emerging technology trends and wanted to position IBM to take advantage of it. He emphasized the relevance of networked model, the retention of network storage and leverage “service” as the next big market segment to offer complete hardware and software solutions. As part of this effort, IBM global services was started in 1996, Lotus, Tivoli and Rational were acquired and technology was licensed to third parties.

After taking stock of the situation, consulting the customers, competitors and business divisions, Mr. Gerstner formulated strategy and pushed it gain employee readiness. IBM moved from a product based, rule based company with deep divisions into a nimble service company with competitive advantages where decisions are made quickly by empowered and capable employees acting with a customer centric bent of mind.

His transformation efforts included

• Pushing a service oriented company that could provide a total solution to any customer’s problem
• Look outside to measure success via customer satisfaction and increased shareholder value
• Operate as an entrepreneurial organization with minimum of bureaucracy and never ending focus on productivity
• Never lose sight of strategic vision, direction & mission, reward teamwork
• removing power and status as key elements of the rewards system created a more market and profit focused company
• right size – layoff 100k employees and shut down unprofitable departments
• Customer segmentation and customer centric sales force
• Service marketing – innovate software, segment service and provide integrated solutions

Culture-shaping strategy

The greatest barrier to change in any large corporation is the culture. Any major shift in strategy or structure requires culture shift to create alignment.  Mr. Gerstner’s strategy involved the following phases:

1. Diagnose & define (define current and future state) – met customers, competitors, senior executives, financial analysts, and consultants to get a grip on outstanding issues. Accepted feedback, paid attention to divergent ideas and opinions
2. Unfreeze & educate (shift behaviors)  – Influencing skills, was results oriented, interested in short-term results without considering long-term, overall results and outcomes, had limited perspective, in time and scope, encouraged ideas off the beaten track and embraced new ideas and innovation, accepted criticism of the organization,
3. Reinforce (treasure long term change) – convinced people of the strategy and brought their buy-in for implementation
4. Apply to Strategies (address business issue) – Mr. Gerstner regrouped IBM by providing one single leadership at the top. Reversed the core IBM mainframe business by cutting prices and becoming customer focused. Synergized the IBM messaging division by providing single message globally. Intelligently put his bet on Services, Software and e-Business. Realigned the employee incentive system to encourage the culture that promotes customer oriented actions.
5. Measure progress (monitor progress) – Compensation system base on Differentiation, Variable rewards, External benchmarks and Performance. Tied employee compensation to the performance of the whole company rather than to the employee’s particular division

The cultural change required at IBM (and at just about every large organization that I can think of) – Product based to customer based, do it my way to do it the customer’s way, from ‘manage to morale’ to ‘manage to success’, from decisions based on anecdotes to decisions based on data, from relationship driven to performance driven (and measured), from conformity to diversity, from looking good to accountability, from US to global, from rule driven to principle driven, from silo to holistic, from analysis paralysis to make decisions and move forward with urgency (80%/20%), from not invented here to learning organization, from fund everything to prioritize. IBM was facing the PC dilemma, the emerging e-Business, shedding OS/2 due to stiff competition, new focus on middleware technology, new software acquisitions, networked model, and services as key to integration etc. These external factors played a huge role in shaping IBM strategy and it’s eventual transformation from a product-centric to service-centric organization.

Most of the changes introduced by Gerstner were successful.  With proper strategy and efficient leadership, he brought about significant changes in organization culture and business direction and was able to restore IBM to stability.

Personal Leadership

Mr. Gersner was an embodiment of most competencies characteristic of an effective leader – drive, motivation, integrity, self-confidence, intelligence, business knowledge and emotional intelligence. Other noticeable key competencies include tenacity, openness, assertiveness and trustworthiness.  He has an excellent past as a transformational leader at American Express and RJR Nabisco – one who can bring about significant change in organizations by inspiring, motivating and leading people in new direction. He is noted for his significant accomplishments as a change agent and when offered the job at IBM by Mr. Jim Burke, he was little hesitant to take the job.  His was in a dilemma whether to accept the offer or not.  He was emotionally strong and knew his capabilities of self-awareness, self-management, social-awareness and relationship management. The factors which led to his job acceptance offer were:

1. KKR was planning on an exit strategy and Gersner knew that chances of RJR’s return to profitability were slim. So Gerstner was looking for an exit and the IBM job proved to be an attractive alternative.
2. b. Being optimistic, achievement and initiative oriented, and adaptable, Gersner decided to take up the challenging offer.
3. c. He had a feel for the problems at IBM after meeting Paul Rizzo, an executive at IBM.
4. d. He had the backing of his family in this endeavor

Factors which worked against taking the job offer include:

1. Apprehensive how a non-technocrat can turnaround a technology company. He had no prior knowledge of working in technology industry.
2. His initial analysis showed the severity of problems at IBM and doubted the success of recovery efforts.
3. Unlike a consumer products company, technology products can be extremely successful or disappear within a short period of time.

By reflecting back on his past achievements, Gersner decided to take the job. He looked at IBM not as an enterprise but as a “national treasure” that was well worth the colossal efforts needed to restore it. Gersner always saw his values in action in personal work behaviors, decision making, contribution, and interpersonal interaction.

After so many years at IBM, Gersner learned three fundamental aspects of leadership that define a successful enterprise and executive.

• Focus – meet the challenges during tough times and undergo transformation
• Execute – getting things done, not crafting strategy but implementing it.
• Lead – create high performance culture, set goals, measure results and ensure accountability

Gersner was quite frank and open about issues and his opinions which helped revive IBM. Through a strategy of listening to customers’ needs, partnering with customers, competitors and other industry leaders, right sizing, eliminating compensation and recognition systems, Gersner was able to bring IBM back into profitability.

Execution of strategy must be built on three attributes – world class processes, strategic clarity and a high performance culture. Leadership is all about making things happen. Achieving success requires energy, organizational leadership, marketplace leadership and personal qualities. Organize resources around customers, not products, or geographies. Measure the future, not the past and walk the talk.

Organizational leadership

Mr. Gresner’s leadership style is marked by strong emotional intelligence and ability to lead people with passion and commitment.  We can see six different styles of leadership in Mr. Gersner- authoritative style, the affiliative, democratic, coaching, pacesetting and coercive styles, all demonstrated in varying strengths.

Mr. Grestner was able to resonate with employee emotions and have a shared desire to be a part of something effective and meaningful. This emotional resonance was established through leadership styles based on emotional intelligent acts. By establishing this connection and creating resonant teams and culture, Gersner was able to improvise and sustain it till his retirement. As an authentic leader he was able to influence work outcomes and organizational performance.

He was a man with convictions and followed his instincts. He was not carried away by what his critics said. He was more into fire fighting, a “fixit” personality who felt the urgent need to rescue IBM. His focus was on short-term strategies and did not set long-term strategic goals since he believed irreversible actions will bring radical shifts which may disrupt his turnaround efforts at IBM.

He was an avid observer and excellent problem solver. He could identify the emerging technological trends to shape new strategies. He understood the importance of customer and devised strategies to address their immediate needs and concerns.

Mr. Gersner followed a systematic approach to address business issues. In order to diagnose problems, he met customers, competitors, senior executives, financial analysts, and consultants to get a grip on outstanding issues. After learning about IBM’s strengths and weaknesses, he launched his turnaround plan.  Instead of focusing on grand vision, he motivated employees through business success which translated into job security and higher pay. He understood the immediate need to have open lines of communication with his employees and having candid feedback. As part of the grand vision, individuals executed tasks which made them an integral part of the transformation effort.

By being democratic, he sought alternatives and convinced others of the need to discontinue support for unattractive products. Gerstner gives credit to many people that were instrumental in the turnaround. He was coercive when he disbanded the management committee and relayed this news across the organization. His affiliative style of leadership resulted in building strong relationships amongst teams. This is reflected in his new set of management principles that reinforce teamwork and harmony.  He made employees equity holders of company to align them with company goals.

As a pace-setter, he showed strong faith and confidence in employee abilities and set high performance standards. An authoritative style emerged when Mr. Gersner resorted to right sizing which may have created some negative impact (emotional dissonance) from the affected employees who were laid off.

Mr. Gersner could spot emerging talent and personally mentored them to lead new divisions within IBM. This was reflective of his coaching style of leadership. He shunned conservative approach and instead took huge risk in transforming IBM from a product-focused organization to a service-oriented, networking-led model organization.  Mr. Gersner played his style by gauging the readiness of his employees to foster change. He leveraged employee abilities and willingness to accomplish specific tasks.

As an effective leader, Mr. Gersner seamlessly shifted from one style to the other to garner best results possible. His repertory of leadership styles is extensive and he used them as the situation warranted to deliver positive outcomes.

Since Mr. Gersner was in a fire fighting mode, he had to apply the right mix of various leadership styles according to the context. I would be acting in the same way that Gersner did to get IBM out of distress.

Though I agree with most of the actions taken to restore IBM back to profitability, I would like to wean away from some harsh decisions and mend my leadership style to some extent.  I would try not to be intensely competitive, blunt, focused and tough. I will try to be more personable, willing to learn and share business knowledge and have empathy towards others. I may introduce IBM as a way of life that is based on values rather than just on being first. Any cost cutting measure involving layoffs will need to be used as a last resort only after exhausting all alternatives. In conformity with Gersner, I would admit failures and try, fail, learn and move on, than never to try at all.

I had the exciting opportunity to interview an intelligent, highly successful technology entrepreneur in Northern Virginia. Listed below are excerpts from the interview, briefly presented as a summary. In respect of privacy, the identity of the individual concerned is not revealed.

Entrepeneur Interview

“Effective people are not problem-minded; they’re opportunity-minded. They feed opportunities and starve problems.” -Stephen Covey

It was this strong belief that turned an aspiring technology professional into a successful entrepreneur. An excellent example of the seamless execution of these elements of entrepreneurial success is Mr. XYZ, the president & CEO of XYZ Inc.(http://www.xyz.com), a provider of full range of professional IT services from custom software development, to quality assurance to project management. His company is listed as one of the top small business enterprise in Northern Virginia employing over 140 consultants. He has over 10 years of experience in engineering, finance, sales, data warehousing and offshore outsourcing. He is one of the active members of the local chapter of The Indus Entrepreneurs (TiE), a non-profit organization focused on generating and nurturing next generation of Indian entrepreneurs.

Mr.XYZ earned his BS in business administration from University of Minnesota and holds a PMP certification from Project Management Institute. His entrepreneurial passion took roots when he started helping his father, a reputed attorney in his home state of Tamil Nadu, India run his business. As an apprentice, he transformed an ailing law practice into a successful business, leveraged the use of information technology and re-structured the law practice. These early accomplishments had a huge influence on his successful career later on.

Mr. XYZ is highly ambitious, well organized, meticulous and educated risk taker characterized by passion, perseverance and persistence. His definition of entrepreneurship was the identification and transformation of a business opportunity into a viable business with self-sustenance. After graduation, he had a short two year stint as a technology consultant during which started analyzing the technology trends, specifically in data mining and data transformation. Being a keen problem solver, he was able to immediately identify immense opportunities for specialized consulting services in business intelligence and business transformation areas. He observed that there were not many companies providing tailored consulting solutions in the areas of data quality, data management, budgeting, forecasting and business analytics. After gaining enough expertise in that area, he started thinking about feasible business ideas and eventually hit upon the idea of starting a business consultancy firm. The passion for a business startup coupled with flexibility of being his own boss drove him to initially establish the consulting business in partnership with a good friend of him. With mutual investment from both partners, the consultancy grew to 8 consultants, but due to financial and strategic differences, both the partners split and went to launch their own companies.

Armed with savings from the partnership, Mr.XYZ did not give up his entrepreneurial spirit, instead focused on the lessons learned, reinforced ideas, streamlined business processes, hired marketing and sales staff and launched a new consulting firm – AstaCRS Inc. He was of the opinion that entrepreneurs will always face failures and it is the optimism, perseverance and tolerance which will lead them on the path to success. Today AstaCRS Inc. is a thriving consulting business which has plans for offshore software development and marketing financial reporting products. In contrary to what we have learned in class, this venture was started without a business plan, with self-directed capital because he knew for sure that his business ideas will work, that he can deliver value proposition and that the market was ripe to implement his ideas.

During the interview I could clearly notice how all the information we had gained on entrepreneurship in class discussions really transpired in the form of entrepreneurship success. Mr.XYZ had faced many setbacks when executing his business ideas transform into real, viable business results. He had to face competition from some well established players in the market, but his niche consulting expertise combined with tailored solutions brought in excellent business opportunities which were wisely exploited. Apart from being committed, aggressive, detail-oriented, Mr. XYZ seeks constant feedback from customers, staff and industry experts. He was fortunate enough to have the company of high-energy, highly motivated staff who worked hard along with the management to build a solid reputation and credibility for the company. Management was highly decentralized with the sales and marketing teams having authority to make instant decisions in pursuit of business opportunities. Finance and Human Resources were under centralized control. Recruitment of consultants and customer service were given high importance – a trademark of consulting niche. Furthermore, when I asked Mr. XYZ to elaborate the way he created his team he explained how he tapped people from his past jobs with whom he had great relationships and in whom he had trust and confidence that they can be an integral part of the business.

As the entrepreneur was talking about his life and his work experience I realized that there were much more factors that had guided him to success. His diverse schooling and college education in multiple countries allowed him to develop multi-cultural skills, understand consumer behaviors and improvise communication skills. His parents and fiancée were of great influence in his success, but unfortunately the stressful entrepreneurial life took a toll on his personal relationship. He broke up with his fiancée and regrets the unfortunate event, but for him his ambition and goal to succeed were his number one priorities in life. He explained how initially the lack of market knowledge led to some disastrous results and lost business. But soon he realized the mistakes and hired a marketing associate to do industry research and compliment his business strategy.

The interview was a great learning tool for me. It gave me an opportunity to understand how entrepreneurs think of business ideas, the traits they display, their personality characteristics, how swiftly they jump on opportunities, how meticulous and organized they are, the immense personal zeal and enthusiasm with which they forge ahead willing to accept failures and learn from mistakes, their noteworthy sociable and networking skills and above all their strong confidence and passion to make an impact in society. In conclusion, Mr.XYZ emphasized the importance of personal values, ethical behavior and empathy towards fellow beings. He encourages positive energy, high performance activities and ability to provide high quality solutions to pressing business problems. As stated rightly, the path to success is laden with thorns but a successful entrepreneur, through hard work and perseverance, will not falter and will always realize his business goals.

This interview was an eye-opener for me to understand the struggles and accomplishments of any successful entrepreneur. I am grateful to Mr. XYZ for sharing his valuable time and discuss his entrepreneurial journey. The knowledge and the perspectives gained from this exciting conversation will help my team build our business plan and I hope to utilize this knowledge to startup my own business in the near future.