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Tuesday, October 28, 2008
Sunday, October 26, 2008
Wednesday, October 22, 2008
Ten Tough Interview Questions and Ten Great Answers
Mental fear of the unknown is often what produces the physical symptoms of nervousness. In addition to preparing yourself physically, you need to prepare yourself mentally. The best way to prepare mentally is to know what may be coming. Fear of the unknown can only exist when there is an unknown. Take the time to understand some of the “standards” when it comes to interviewing questions.
The following are some of the most difficult questions you will face in the course of your job interviews. Some questions may seem rather simple on the surface—such as “Tell me about yourself”—but these questions can have a variety of answers. The more open ended the question, the wider the variation in the answers. Once you have become practiced in your interviewing skills, you will find that you can use almost any question as a launching pad for a particular topic or compelling story.
Others are classic interview questions, such as “What is your greatest weakness?” Questions most people answer improperly. In this case, the standard textbook answer for the “greatest weakness” question is to provide a veiled positive such as: “I work too much. I just work and work and work.” Wrong. Either you are lying or, worse yet, you are telling the truth, in which case you define working too much as a weakness and really do not want to work much at all.
The following answers are provided to give you a new perspective on how to answer tough interview questions. They are not there for you to lift from the page and insert into your next interview. They are provided for you to use as the basic structure for formulating your own answers. While the specifics of each reply may not apply to you, try to follow the basic structure of the answer from the perspective of the interviewer.
Answer the questions behaviorally, with specific examples that show that clear evidence backs up what you are saying about yourself. Always provide information that shows you want to become the very best _____ for the company and that you have specifically prepared yourself to become exactly that. They want to be sold. They are waiting to be sold. Don’t disappoint them!
1. Tell me about yourself.
It seems like an easy interview question. It’s open ended. I can talk about whatever I want from the birth canal forward. Right?
Wrong. What the hiring manager really wants is a quick, two- to three-minute snapshot of who you are and why you’re the best candidate for this position.
So as you answer this question, talk about what you’ve done to prepare yourself to be the very best candidate for the position. Use an example or two to back it up.
Then ask if they would like more details. If they do, keep giving them example after example of your background and experience. Always point back to an example when you have the opportunity.
“Tell me about yourself” does not mean tell me everything. Just tell me what makes you the best.
2. Why should I hire you?
The easy answer is that you are the best person for the job. And don’t be afraid to say so. But then back it up with what specifically differentiates you.
For example: “You should hire me because I’m the best person for the job. I realize that there are likely other candidates who also have the ability to do this job. Yet I bring an additional quality that makes me the best person for the job--my passion for excellence. I am passionately committed to producing truly world class results. For example . . .”
Are you the best person for the job? Show it by your passionate examples.
3. What is your long-range objective?
Make my job easy for me. Make me want to hire you.
The key is to focus on your achievable objectives and what you are doing to reach those objectives.
For example: “Within five years, I would like to become the very best accountant your company has on staff. I want to work toward becoming the expert that others rely upon. And in doing so, I feel I’ll be fully prepared to take on any greater responsibilities which might be presented in the long term. For example, here is what I’m presently doing to prepare myself . . .”
Then go on to show by your examples what you are doing to reach your goals and objectives.
4. How has your education prepared you for your career?
This is a broad question and you need to focus on the behavioral examples in your educational background which specifically align to the required competencies for the career.
An example: “My education has focused on not only the learning the fundamentals, but also on the practical application of the information learned within those classes. For example, I played a lead role in a class project where we gathered and analyzed best practice data from this industry. Let me tell you more about the results . . .”
Focus on behavioral examples supporting the key competencies for the career. Then ask if they would like to hear more examples.
5. Are you a team player?
Almost everyone says yes to this question. But it is not just a yes/no question. You need to provide behavioral examples to back up your answer.
A sample answer: “Yes, I’m very much a team player. In fact, I’ve had opportunities in my work, school and athletics to develop my skills as a team player. For example, on a recent project . . .”
Emphasize teamwork behavioral examples and focus on your openness to diversity of backgrounds. Talk about the strength of the team above the individual. And note that this question may be used as a lead in to questions around how you handle conflict within a team, so be prepared.
6. Have you ever had a conflict with a boss or professor? How was it resolved?
Note that if you say no, most interviewers will keep drilling deeper to find a conflict. The key is how you behaviorally reacted to conflict and what you did to resolve it.
For example: “Yes, I have had conflicts in the past. Never major ones, but there have been disagreements that needed to be resolved. I've found that when conflict occurs, it helps to fully understand the other person’s perspective, so I take time to listen to their point of view, then I seek to work out a collaborative solution. For example . . .”
Focus your answer on the behavioral process for resolving the conflict and
working collaboratively.
7. What is your greatest weakness?
Most career books tell you to select a strength and present it as a weakness. Such as: “I work too much. I just work and work and work.” Wrong. First of all, using a strength and presenting it as a weakness is deceiving. Second, it misses the point of the question. You should select a weakness that you have been actively working to overcome.
For example: “I have had trouble in the past with planning and prioritization. However, I’m now taking steps to correct this. I just started using a pocket planner . . .” then show them your planner and how you are using it.
Talk about a true weakness and show what you are doing to overcome it.
8. If I were to ask your professors to describe you, what would they say?
This is a threat of reference check question. Do not wait for the interview to know the answer. Ask any prior bosses or professors in advance. And if they’re willing to provide a positive reference, ask them for a letter of recommendation.
Then you can answer the question like this:
“I believe she would say I'm a very energetic person, that I’m results oriented and one of the best people she has ever worked with. Actually, I know she would say that, because those are her very words. May I show you her letter of recommendation?”
So be prepared in advance with your letters of recommendation.
9. What qualities do you feel a successful manager should have?
Focus on two words: leadership and vision.
Here is a sample of how to respond: “The key quality in a successful manager should be leadership--the ability to be the visionary for the people who are working under them. The person who can set the course and direction for subordinates. The highest calling of a true leader is inspiring others to reach the highest of their abilities. I'd like to tell you about a person whom I consider to be a true leader . . .”
Then give an example of someone who has touched your life and how their impact has helped in your personal development.
10. If you had to live your life over again, what one thing would you change?
Focus on a key turning point in your life or missed opportunity. Yet also tie it forward to what you are doing to still seek to make that change.
For example: “Although I’m overall very happy with where I’m at in my life, the one aspect I likely would have changed would be focusing earlier on my chosen career. I had a great internship this past year and look forward to more experience in the field. I simply wish I would have focused here earlier. For example, I learned on my recent internship…” …then provide examples.
Stay focused on positive direction in your life and back it up with examples.
In reviewing these responses, please remember that they are only to be viewed samples. Please do not rehearse them verbatim or adopt them as your own. They are meant to stir your creative juices and get you thinking about how to properly answer the broader range of questions that you will face.
The following are some of the most difficult questions you will face in the course of your job interviews. Some questions may seem rather simple on the surface—such as “Tell me about yourself”—but these questions can have a variety of answers. The more open ended the question, the wider the variation in the answers. Once you have become practiced in your interviewing skills, you will find that you can use almost any question as a launching pad for a particular topic or compelling story.
Others are classic interview questions, such as “What is your greatest weakness?” Questions most people answer improperly. In this case, the standard textbook answer for the “greatest weakness” question is to provide a veiled positive such as: “I work too much. I just work and work and work.” Wrong. Either you are lying or, worse yet, you are telling the truth, in which case you define working too much as a weakness and really do not want to work much at all.
The following answers are provided to give you a new perspective on how to answer tough interview questions. They are not there for you to lift from the page and insert into your next interview. They are provided for you to use as the basic structure for formulating your own answers. While the specifics of each reply may not apply to you, try to follow the basic structure of the answer from the perspective of the interviewer.
Answer the questions behaviorally, with specific examples that show that clear evidence backs up what you are saying about yourself. Always provide information that shows you want to become the very best _____ for the company and that you have specifically prepared yourself to become exactly that. They want to be sold. They are waiting to be sold. Don’t disappoint them!
1. Tell me about yourself.
It seems like an easy interview question. It’s open ended. I can talk about whatever I want from the birth canal forward. Right?
Wrong. What the hiring manager really wants is a quick, two- to three-minute snapshot of who you are and why you’re the best candidate for this position.
So as you answer this question, talk about what you’ve done to prepare yourself to be the very best candidate for the position. Use an example or two to back it up.
Then ask if they would like more details. If they do, keep giving them example after example of your background and experience. Always point back to an example when you have the opportunity.
“Tell me about yourself” does not mean tell me everything. Just tell me what makes you the best.
2. Why should I hire you?
The easy answer is that you are the best person for the job. And don’t be afraid to say so. But then back it up with what specifically differentiates you.
For example: “You should hire me because I’m the best person for the job. I realize that there are likely other candidates who also have the ability to do this job. Yet I bring an additional quality that makes me the best person for the job--my passion for excellence. I am passionately committed to producing truly world class results. For example . . .”
Are you the best person for the job? Show it by your passionate examples.
3. What is your long-range objective?
Make my job easy for me. Make me want to hire you.
The key is to focus on your achievable objectives and what you are doing to reach those objectives.
For example: “Within five years, I would like to become the very best accountant your company has on staff. I want to work toward becoming the expert that others rely upon. And in doing so, I feel I’ll be fully prepared to take on any greater responsibilities which might be presented in the long term. For example, here is what I’m presently doing to prepare myself . . .”
Then go on to show by your examples what you are doing to reach your goals and objectives.
4. How has your education prepared you for your career?
This is a broad question and you need to focus on the behavioral examples in your educational background which specifically align to the required competencies for the career.
An example: “My education has focused on not only the learning the fundamentals, but also on the practical application of the information learned within those classes. For example, I played a lead role in a class project where we gathered and analyzed best practice data from this industry. Let me tell you more about the results . . .”
Focus on behavioral examples supporting the key competencies for the career. Then ask if they would like to hear more examples.
5. Are you a team player?
Almost everyone says yes to this question. But it is not just a yes/no question. You need to provide behavioral examples to back up your answer.
A sample answer: “Yes, I’m very much a team player. In fact, I’ve had opportunities in my work, school and athletics to develop my skills as a team player. For example, on a recent project . . .”
Emphasize teamwork behavioral examples and focus on your openness to diversity of backgrounds. Talk about the strength of the team above the individual. And note that this question may be used as a lead in to questions around how you handle conflict within a team, so be prepared.
6. Have you ever had a conflict with a boss or professor? How was it resolved?
Note that if you say no, most interviewers will keep drilling deeper to find a conflict. The key is how you behaviorally reacted to conflict and what you did to resolve it.
For example: “Yes, I have had conflicts in the past. Never major ones, but there have been disagreements that needed to be resolved. I've found that when conflict occurs, it helps to fully understand the other person’s perspective, so I take time to listen to their point of view, then I seek to work out a collaborative solution. For example . . .”
Focus your answer on the behavioral process for resolving the conflict and
working collaboratively.
7. What is your greatest weakness?
Most career books tell you to select a strength and present it as a weakness. Such as: “I work too much. I just work and work and work.” Wrong. First of all, using a strength and presenting it as a weakness is deceiving. Second, it misses the point of the question. You should select a weakness that you have been actively working to overcome.
For example: “I have had trouble in the past with planning and prioritization. However, I’m now taking steps to correct this. I just started using a pocket planner . . .” then show them your planner and how you are using it.
Talk about a true weakness and show what you are doing to overcome it.
8. If I were to ask your professors to describe you, what would they say?
This is a threat of reference check question. Do not wait for the interview to know the answer. Ask any prior bosses or professors in advance. And if they’re willing to provide a positive reference, ask them for a letter of recommendation.
Then you can answer the question like this:
“I believe she would say I'm a very energetic person, that I’m results oriented and one of the best people she has ever worked with. Actually, I know she would say that, because those are her very words. May I show you her letter of recommendation?”
So be prepared in advance with your letters of recommendation.
9. What qualities do you feel a successful manager should have?
Focus on two words: leadership and vision.
Here is a sample of how to respond: “The key quality in a successful manager should be leadership--the ability to be the visionary for the people who are working under them. The person who can set the course and direction for subordinates. The highest calling of a true leader is inspiring others to reach the highest of their abilities. I'd like to tell you about a person whom I consider to be a true leader . . .”
Then give an example of someone who has touched your life and how their impact has helped in your personal development.
10. If you had to live your life over again, what one thing would you change?
Focus on a key turning point in your life or missed opportunity. Yet also tie it forward to what you are doing to still seek to make that change.
For example: “Although I’m overall very happy with where I’m at in my life, the one aspect I likely would have changed would be focusing earlier on my chosen career. I had a great internship this past year and look forward to more experience in the field. I simply wish I would have focused here earlier. For example, I learned on my recent internship…” …then provide examples.
Stay focused on positive direction in your life and back it up with examples.
In reviewing these responses, please remember that they are only to be viewed samples. Please do not rehearse them verbatim or adopt them as your own. They are meant to stir your creative juices and get you thinking about how to properly answer the broader range of questions that you will face.
Competitive Advantage
In any industry, businesses create a competitive advantage through price or the market. A price or cost advantage is tied directly to production costs, efficiency, or available technology. A competitive advantage in the market requires you to develop market differentiation—the aspect of your business that sets you apart from the competitors in your industry.
Companies that build and sustain a distinct market differentiator generally have unique attributes.
Competitive Advantage Using Market Differentiators:
Each of these companies has grown by using some kind of market differentiator, such as the following:
• Unique way to meet the needs of a niche market
• Brand recognition in the market
• Proprietary or trade secrets for operations
• Customized or proprietary software or technology
Companies with a price, or cost, advantage over competitors usually have internal strengths that are difficult for other competitors to replicate, including:
• Investments in production and equipment
• Expertise in designing products/services efficiently
• Access to less expensive materials
• Operational processes replicated consistently
• Outsourcing partnerships
• Patents and trademarks
• Unique combination of products/services
• Access to leading or scientific research
• Highly skilled and creative staff
• Reputation for quality and innovation
• Efficient distribution channels
• Effective hiring practices, low turnover, and highly skilled/knowledgeable staff
• Efficient production or operational systems
• Innovative equipment or technology
• Strategic alliances that support delivery to customers
Six Differentiators That Build a Competitive Advantage:
A true competitive advantage is one that is difficult for other competitors to copy and one that customers find valuable. Ultimately, your competitive advantage is why customers choose to do business with your company over anyone else. If customers don’t value your differentiator, then you don’t have a competitive advantage. Here are six ways your company can differentiate itself from the rest:
Core competencies – The core competencies can be used to develop an edge over the competition by providing products or services that customers value over products or services your competitors offer. Auntie Anne’s® specializes in making pretzels in every way imaginable. Rather than making a variety of products, founder Anne Bieler decided to focus on a competence she mastered at the age of twelve, baking pretzels. Core competencies are the strengths that allow you to meet the needs of your customers. Keep in mind: your core competencies may change over time, depending on the demands of the marketplace and the dominant position you want to have over competitors.
Reputation for superior products/services – Provide the best products or services in the industry or market. Your focus on quality will give you a reputation for expertise in specific areas. For example, Nordstrom® focuses on offering customers the best possible service, selection, quality, and value. Nordstrom sets the standard for department store customer service and a guaranteed, money-back commitment to meet customers’ expectations.
Niche market – Offer products or services to meet the specific demands of the target market(s). A niche market is a distinctive group of customers within a larger market or a smaller segment of a product line. For example, ITW® (Illinois Tool Works) manufactures specialty fasteners and products that are customized for its buyers’ needs.
Tom’s of Maine®, by positioning its toothpaste as a natural product, created a new category in the toothpaste market. Since no other toothpaste filled this need, the company was able to charge a premium price that consumers who buy organic or all natural products will gladly pay.
Unique distribution channels or delivery methods – Use a selling method that
is unique to the industry or difficult for competitors to use effectively. Provide
multiple products or services to the same or similar markets through an effective distribution channel.
Dell® sells computers directly to consumers and builds every computer system to order based on the customer’s specific needs. Dell uses a variety of suppliers who actually manufacture the computer components, but since Dell bypasses middlemen and retailers to sell to consumers, it maintains low overhead and passes the savings on to buyers.
Amazon.com was the first in its industry to use e-commerce to market and distribute books, music, and movies. Besides offering competitive prices, Amazon has an excellent distribution system and can get products into customers’ hands quickly. Amazon also developed strategic relationships with used booksellers to provide customers with the option of buying new or used books.
Organizational efficiency – Look for less expensive materials and more efficient equipment. Streamline your processes and find ways to make products or deliver services more efficiently. Outsource to efficient and highly skilled suppliers. Hire staff with expertise that can improve operations and efficiency levels. For example, Southwest Airlines® continues to be one the few profitable airlines because of its ability to provide excellent service, budget prices for fares, and quick turnaround on secondary routes. Southwest Airlines started a trend for cost-conscious, low-frills air transportation.
Unique technology and innovative products or services – Use unique, innovative, and leading technology to market, sell, and serve target markets. Consider using the Internet to offer products or services to local, regional, national, or global customers. Invest in technology to manufacture products, manage operations, or track customer information.
Apple does not produce as many products as Hewlett Packard® or Samsung®. But what sets Apple apart from its competitors is that it creates innovative products that initially are unique for the industry. Apple’s first success was its user-friendly computer icons—even three year-olds could use the computer. With the introduction of the iPod®, a miniature electronic gizmo that can hold 15,000 songs, Apple again provided a unique product to meet the diverse needs of the market.
Kauffman Foundation
Companies that build and sustain a distinct market differentiator generally have unique attributes.
Competitive Advantage Using Market Differentiators:
Each of these companies has grown by using some kind of market differentiator, such as the following:
• Unique way to meet the needs of a niche market
• Brand recognition in the market
• Proprietary or trade secrets for operations
• Customized or proprietary software or technology
Companies with a price, or cost, advantage over competitors usually have internal strengths that are difficult for other competitors to replicate, including:
• Investments in production and equipment
• Expertise in designing products/services efficiently
• Access to less expensive materials
• Operational processes replicated consistently
• Outsourcing partnerships
• Patents and trademarks
• Unique combination of products/services
• Access to leading or scientific research
• Highly skilled and creative staff
• Reputation for quality and innovation
• Efficient distribution channels
• Effective hiring practices, low turnover, and highly skilled/knowledgeable staff
• Efficient production or operational systems
• Innovative equipment or technology
• Strategic alliances that support delivery to customers
Six Differentiators That Build a Competitive Advantage:
A true competitive advantage is one that is difficult for other competitors to copy and one that customers find valuable. Ultimately, your competitive advantage is why customers choose to do business with your company over anyone else. If customers don’t value your differentiator, then you don’t have a competitive advantage. Here are six ways your company can differentiate itself from the rest:
Core competencies – The core competencies can be used to develop an edge over the competition by providing products or services that customers value over products or services your competitors offer. Auntie Anne’s® specializes in making pretzels in every way imaginable. Rather than making a variety of products, founder Anne Bieler decided to focus on a competence she mastered at the age of twelve, baking pretzels. Core competencies are the strengths that allow you to meet the needs of your customers. Keep in mind: your core competencies may change over time, depending on the demands of the marketplace and the dominant position you want to have over competitors.
Reputation for superior products/services – Provide the best products or services in the industry or market. Your focus on quality will give you a reputation for expertise in specific areas. For example, Nordstrom® focuses on offering customers the best possible service, selection, quality, and value. Nordstrom sets the standard for department store customer service and a guaranteed, money-back commitment to meet customers’ expectations.
Niche market – Offer products or services to meet the specific demands of the target market(s). A niche market is a distinctive group of customers within a larger market or a smaller segment of a product line. For example, ITW® (Illinois Tool Works) manufactures specialty fasteners and products that are customized for its buyers’ needs.
Tom’s of Maine®, by positioning its toothpaste as a natural product, created a new category in the toothpaste market. Since no other toothpaste filled this need, the company was able to charge a premium price that consumers who buy organic or all natural products will gladly pay.
Unique distribution channels or delivery methods – Use a selling method that
is unique to the industry or difficult for competitors to use effectively. Provide
multiple products or services to the same or similar markets through an effective distribution channel.
Dell® sells computers directly to consumers and builds every computer system to order based on the customer’s specific needs. Dell uses a variety of suppliers who actually manufacture the computer components, but since Dell bypasses middlemen and retailers to sell to consumers, it maintains low overhead and passes the savings on to buyers.
Amazon.com was the first in its industry to use e-commerce to market and distribute books, music, and movies. Besides offering competitive prices, Amazon has an excellent distribution system and can get products into customers’ hands quickly. Amazon also developed strategic relationships with used booksellers to provide customers with the option of buying new or used books.
Organizational efficiency – Look for less expensive materials and more efficient equipment. Streamline your processes and find ways to make products or deliver services more efficiently. Outsource to efficient and highly skilled suppliers. Hire staff with expertise that can improve operations and efficiency levels. For example, Southwest Airlines® continues to be one the few profitable airlines because of its ability to provide excellent service, budget prices for fares, and quick turnaround on secondary routes. Southwest Airlines started a trend for cost-conscious, low-frills air transportation.
Unique technology and innovative products or services – Use unique, innovative, and leading technology to market, sell, and serve target markets. Consider using the Internet to offer products or services to local, regional, national, or global customers. Invest in technology to manufacture products, manage operations, or track customer information.
Apple does not produce as many products as Hewlett Packard® or Samsung®. But what sets Apple apart from its competitors is that it creates innovative products that initially are unique for the industry. Apple’s first success was its user-friendly computer icons—even three year-olds could use the computer. With the introduction of the iPod®, a miniature electronic gizmo that can hold 15,000 songs, Apple again provided a unique product to meet the diverse needs of the market.
Kauffman Foundation
Tuesday, October 21, 2008
When One Team Member Is Ruining Your Team
- My first suggestion is to work on improving the team behavior of every team member. In this way, the one person you are having problems with won't feel 'singled out' by you.
- Have each team member ask each other team member a simple question: "In the future, how can I do a great job of helping our team demonstrate effective teamwork?"
- Encourage each team member to be positive and focused in their replies to other team members.
- Encourage each team member to listen to, learn from, and express gratitude for these suggestions.
- Have each team member discuss what they have learned from the other team members with you - in a one-on-one dialogue.
- Provide your ideas - as the manager of the team -- after you have heard the summary of the other suggestions from this person's team members.
- Ask each person to commit to following up with fellow team members on their plan for improvement to get ongoing suggestions and reinforcement.
- Participate in the process yourself - so that you are 'leading by example' not just 'leading by preaching at everyone else.'
This series of suggestions will work if the person you are trying to help has issues that are behavioral, is willing to try, and will be given a fair chance by the other team members. If the person is unwilling to try, or has a sarcastic or cynical attitude toward change, this won't work.
If she has this bad attitude, tell her that a change in behavior is critically important. Let her know that you want to help her however you can - but that she is going to have to make the effort to improve. If she still doesn't care, either fire her or, if she is a critical individual contributor who can function well without team interaction, have her work alone.
Posted by Marshall Goldsmith in http://discussionleader.hbsp.com
Is Corporate Transparency Always a Good Thing?
It's one of the tenets of corporate communications that transparency is a good thing. The history of corporations communicating is littered with examples, good and bad, of what happens when you adhere to or violate the Transparency Rule.
The modern example that has long been held as the standard is Johnson & Johnson's response to the Tylenol murders of 1982. By all accounts, the company handled the crisis brilliantly. It warned everyone, pulled Tylenol off the shelves, and ultimately re-launched the brand with tamper-proof bottles. Tylenol regained virtually all of its market share and has continued to sell well nearly 30 years later.
By contrast, the corporate graveyards are marked with the headstones of many companies that were less forthcoming, or even deceptive, in their dealings with the public: WorldCom and Enron, to go back a few years, and Lehman Brothers and AIG to pick from recent headlines.
The lessons seem to be clear: transparency is a good thing. Those who follow the rule get a chance to survive, even possibly thrive. Those who do not, suffer, and perhaps die.
Moreover, organizations today don't really have a choice. This is the era of transparency, thanks to You Tube, the 24/7 news cycle, and the Internet, and what you don't admit to in public will hit the news in a nanosecond or two anyway.
And, of course, if the news is shaped by someone else, the odds are that it will be considerably less kind to your point of view. You will add skulking to your list of corporate sins.
Given both the urgency and the necessity of transparency today, is there any argument to be made for holding back?
Let's look at a recent case: Daniel Bouton, CEO and Chairman of Societe Generale. Back in January, Daniel Bouton learned one weekend that a rogue trader in his shop had generated almost 50 billion euros in losing bets - a great deal more than the firm was worth.
How did Bouton respond? He told only a select few insiders. He enlisted the help of a couple of closed-mouth traders and spent a few intense days unwinding the trades and getting SG's financial house in order. By mid-week, he was able to report to an astonished French and world press that he had saved the firm and taken 4.9 billion euros in losses.
The bad news was that it was a huge hit. The good news was that the firm wouldn't go under that week.
Was Bouton right or wrong? Had he gone public, the firm would have most likely failed.
Had he notified the media on Monday morning, the resulting feeding frenzy would have almost certainly sunk SG, and perhaps precipitated a much wider financial mess. As it was, the damage was controlled and organizational life went on.
In the end, Bouton was relieved of his CEO title a few months later, but he stayed on as Chairman. Was that an appropriate punishment? Or was that a wink and a nod to a cowboy whose gutsy actions saved the day?
In fact, Bouton was only able to save the firm because he withheld significant information. What should we make of that?
And there's a further price to pay for this non-disclosure. Bouton and SG lose credibility with the press and the public in general. How will that affect them? In a recent press release, SG was reduced to announcing this:
Societe Generale reiterates its formal denial of the market rumors which may have circulated today. At this time, the Group has not experienced significant losses on its structured products activities, which would necessitate a recapitalization of any kind.
Paris, 13 October 2008
In the long run, my guess is that SG will indeed suffer, and die. Bouton saved the firm that week, but trust, once broken, cannot easily be re-established. And without trust, a firm that depends on credit cannot survive.
Posted by Nick Morgan in http://conversationstarter.hbsp.com
The modern example that has long been held as the standard is Johnson & Johnson's response to the Tylenol murders of 1982. By all accounts, the company handled the crisis brilliantly. It warned everyone, pulled Tylenol off the shelves, and ultimately re-launched the brand with tamper-proof bottles. Tylenol regained virtually all of its market share and has continued to sell well nearly 30 years later.
By contrast, the corporate graveyards are marked with the headstones of many companies that were less forthcoming, or even deceptive, in their dealings with the public: WorldCom and Enron, to go back a few years, and Lehman Brothers and AIG to pick from recent headlines.
The lessons seem to be clear: transparency is a good thing. Those who follow the rule get a chance to survive, even possibly thrive. Those who do not, suffer, and perhaps die.
Moreover, organizations today don't really have a choice. This is the era of transparency, thanks to You Tube, the 24/7 news cycle, and the Internet, and what you don't admit to in public will hit the news in a nanosecond or two anyway.
And, of course, if the news is shaped by someone else, the odds are that it will be considerably less kind to your point of view. You will add skulking to your list of corporate sins.
Given both the urgency and the necessity of transparency today, is there any argument to be made for holding back?
Let's look at a recent case: Daniel Bouton, CEO and Chairman of Societe Generale. Back in January, Daniel Bouton learned one weekend that a rogue trader in his shop had generated almost 50 billion euros in losing bets - a great deal more than the firm was worth.
How did Bouton respond? He told only a select few insiders. He enlisted the help of a couple of closed-mouth traders and spent a few intense days unwinding the trades and getting SG's financial house in order. By mid-week, he was able to report to an astonished French and world press that he had saved the firm and taken 4.9 billion euros in losses.
The bad news was that it was a huge hit. The good news was that the firm wouldn't go under that week.
Was Bouton right or wrong? Had he gone public, the firm would have most likely failed.
Had he notified the media on Monday morning, the resulting feeding frenzy would have almost certainly sunk SG, and perhaps precipitated a much wider financial mess. As it was, the damage was controlled and organizational life went on.
In the end, Bouton was relieved of his CEO title a few months later, but he stayed on as Chairman. Was that an appropriate punishment? Or was that a wink and a nod to a cowboy whose gutsy actions saved the day?
In fact, Bouton was only able to save the firm because he withheld significant information. What should we make of that?
And there's a further price to pay for this non-disclosure. Bouton and SG lose credibility with the press and the public in general. How will that affect them? In a recent press release, SG was reduced to announcing this:
Societe Generale reiterates its formal denial of the market rumors which may have circulated today. At this time, the Group has not experienced significant losses on its structured products activities, which would necessitate a recapitalization of any kind.
Paris, 13 October 2008
In the long run, my guess is that SG will indeed suffer, and die. Bouton saved the firm that week, but trust, once broken, cannot easily be re-established. And without trust, a firm that depends on credit cannot survive.
Posted by Nick Morgan in http://conversationstarter.hbsp.com
The Next 8 Years of Indian IT Industry
Forbes has some scary statistics on the salary hike rate in India. The 2007 rate is 15.1%, up from 14.4% the previous year. 2008 forecast: 15.2%. This is the fifth consecutive year of salary growth above 10%.
Good lord!
Is Death of Indian Outsourcing all that far out?
Assuming a 15% y-o-y salary hike rate, and a 2007 cost advantage of 1:3 in favor of India, and assuming that wages remain constant in the US, in 2015 the cost advantage disappears.
So what would need to happen in the next 8 years to find another sustainable competitive advantage for India, considering that India doesn’t do IT products?
It could be, that the IT skill-base in India is substantially larger than what exists in the West, in which case the outsourcing will continue purely on the basis of skills and not cost.
However, a large portion of the 4 Million people that the IT/ITES industry employs are not exactly skill-differentiated. That segment of the industry will need to go to a lower cost-structure.
In India, the bottleneck for going to that lower cost-structure will be finding English-speaking people. Cleaning up accents is one thing. Teaching people to converse fluently in a new language is quite another. My sense is that the Call-Center work will move back to the US.
BPO, at least to some degree, would become automated via SaaS. Even Indian BPO shops would start streamlining by deploying SaaS solutions to make their own processes more efficient. Trimming of fat will definitely be in order.
One final point - Politics.
If the Democrats get the White House for these next 8 years in question, chances are, they would try to offer incentives to US companies to keep jobs in the US.
Couple that with instability in Pakistan post-Musharraf, as that country learns to operate with a new system called Democracy, for lack of a better word. It will hang over India like a dark cloud.
So, overall, are we to expect the Indian IT/ITES industry growth momentum to subside in 2015, or even before?
Adopted From: Indian IT Industry: The Next 8 Years, www.sramanamitra.com
Good lord!
Is Death of Indian Outsourcing all that far out?
Assuming a 15% y-o-y salary hike rate, and a 2007 cost advantage of 1:3 in favor of India, and assuming that wages remain constant in the US, in 2015 the cost advantage disappears.
So what would need to happen in the next 8 years to find another sustainable competitive advantage for India, considering that India doesn’t do IT products?
It could be, that the IT skill-base in India is substantially larger than what exists in the West, in which case the outsourcing will continue purely on the basis of skills and not cost.
However, a large portion of the 4 Million people that the IT/ITES industry employs are not exactly skill-differentiated. That segment of the industry will need to go to a lower cost-structure.
In India, the bottleneck for going to that lower cost-structure will be finding English-speaking people. Cleaning up accents is one thing. Teaching people to converse fluently in a new language is quite another. My sense is that the Call-Center work will move back to the US.
BPO, at least to some degree, would become automated via SaaS. Even Indian BPO shops would start streamlining by deploying SaaS solutions to make their own processes more efficient. Trimming of fat will definitely be in order.
One final point - Politics.
If the Democrats get the White House for these next 8 years in question, chances are, they would try to offer incentives to US companies to keep jobs in the US.
Couple that with instability in Pakistan post-Musharraf, as that country learns to operate with a new system called Democracy, for lack of a better word. It will hang over India like a dark cloud.
So, overall, are we to expect the Indian IT/ITES industry growth momentum to subside in 2015, or even before?
Adopted From: Indian IT Industry: The Next 8 Years, www.sramanamitra.com
Monday, October 20, 2008
Is Corporate Social Responsibility Responsible?
The concept of corporate social responsibility deserves to be challenged. It seems that political correctness has obfuscated the important business points. It is absolutely correct to expect that corporations should be “responsible” by creating quality products and marketing them in an ethical manner, in compliance with laws and regulations and with financials represented in an honest, transparent way to shareholders. However, the notion that the corporation should apply its assets for social purposes, rather than for the profit of its owners, the shareholders, is irresponsible.
The corporation’s goal is to act on behalf of its owners. The company’s owners--its shareholders--can certainly donate their own assets to charities that promote causes they believe in. They can buy hybrid cars to cut back on fossil fuel consumption or support organizations that train the hard-core unemployed. But it would be irresponsible for the management and directors of a company, whose stock these investors purchased, to deploy corporate assets for social causes.
It would be very easy to carry out a litmus test of the market for corporate social responsibility. For example, Apple Computer could sell one iPod for $99 and another for $125. The company could announce that the extra $26 from the more expensive iPod would be spent to promote specific social causes, such as education, environmentalism, etc. Such a test would account clearly and honestly for how shareholders’ money was being used and would allow the market to drive the outcome. If consumers wanted to pay the extra $26, voting with their wallets for a cause they believe in, they could.
Interestingly, such a litmus test already exists, albeit not in the private sector. Beginning in tax year 2002, the state of Massachusetts gave taxpayers the option of checking a box on their 1040s to pay a higher rate, with the extra funds going to social services. Out of the $16 billion that Massachusetts residents paid in taxes that year, only $100 million came from people who volunteered to pay extra. That’s less than 1% of the market--sobering when one considers that Massachusetts is a state with a high degree of social consciousness. In point of fact, when it comes to actually voting with their wallets, consumers prefer not to be directed to do so. They like to contribute individually, to charities they believe in and wish to support as individuals, not as part of a huge pool. They certainly do not expect the for-profit corporations in which they invest to deploy corporate assets for social causes.
Thus, it would be a questionable use of corporate assets for a company to invest its shareholders’ money in a “green” headquarters that cost an extra $100 million. The goal of reducing pollution by building an environmentally friendly headquarters may be a worthy one--but the corporation hasn’t asked shareholders whether they want their assets spent that way. In fact, it would be not only irresponsible but deceptive.
Management is charged with making informed decisions to invest corporate assets for uses that will efficiently achieve corporate goals. These include growth, profitability, product innovation, and anything else that drives the shareholders’ return on investment as measured by the stock price. What quantifiable outcome could a green headquarters produce? How could the corporation justify, in a quantifiable way, the use of shareholder assets?
There are practical reasons why corporations should cloak themselves in the politically correct rhetoric of social responsibility. But marketing should not be confused with significant deployments of corporate assets. For example, British Petroleum's marketing campaign, which is all about looking for alternative energy sources, makes the consuming public feel good about purchasing BP products. But if BP had redeployed billions of dollars into environmental investments that yielded no profits, and its stock plummeted, one would certainly expect the investing public to transfer its money to a competitor.
What the investing and consuming public really means by “social responsibility” is:
--Be transparent in your financial reporting.
--Produce a quality product, and don’t misrepresent it.
--If you know something about the product that endangers the consumer, be forthright and let the public know.
--Do not use predatory practices in offshore manufacturing, such as child labor.
--Do not pollute your environment or other environments, and adhere to laws and regulations.
--Be respectful, fair and open in your employment practices.
In other words, corporate social responsibility actually refers largely to what the company does not do. I think this is a clarification that should be understood by all constituencies.
The corporation’s goal is to act on behalf of its owners. The company’s owners--its shareholders--can certainly donate their own assets to charities that promote causes they believe in. They can buy hybrid cars to cut back on fossil fuel consumption or support organizations that train the hard-core unemployed. But it would be irresponsible for the management and directors of a company, whose stock these investors purchased, to deploy corporate assets for social causes.
It would be very easy to carry out a litmus test of the market for corporate social responsibility. For example, Apple Computer could sell one iPod for $99 and another for $125. The company could announce that the extra $26 from the more expensive iPod would be spent to promote specific social causes, such as education, environmentalism, etc. Such a test would account clearly and honestly for how shareholders’ money was being used and would allow the market to drive the outcome. If consumers wanted to pay the extra $26, voting with their wallets for a cause they believe in, they could.
Interestingly, such a litmus test already exists, albeit not in the private sector. Beginning in tax year 2002, the state of Massachusetts gave taxpayers the option of checking a box on their 1040s to pay a higher rate, with the extra funds going to social services. Out of the $16 billion that Massachusetts residents paid in taxes that year, only $100 million came from people who volunteered to pay extra. That’s less than 1% of the market--sobering when one considers that Massachusetts is a state with a high degree of social consciousness. In point of fact, when it comes to actually voting with their wallets, consumers prefer not to be directed to do so. They like to contribute individually, to charities they believe in and wish to support as individuals, not as part of a huge pool. They certainly do not expect the for-profit corporations in which they invest to deploy corporate assets for social causes.
Thus, it would be a questionable use of corporate assets for a company to invest its shareholders’ money in a “green” headquarters that cost an extra $100 million. The goal of reducing pollution by building an environmentally friendly headquarters may be a worthy one--but the corporation hasn’t asked shareholders whether they want their assets spent that way. In fact, it would be not only irresponsible but deceptive.
Management is charged with making informed decisions to invest corporate assets for uses that will efficiently achieve corporate goals. These include growth, profitability, product innovation, and anything else that drives the shareholders’ return on investment as measured by the stock price. What quantifiable outcome could a green headquarters produce? How could the corporation justify, in a quantifiable way, the use of shareholder assets?
There are practical reasons why corporations should cloak themselves in the politically correct rhetoric of social responsibility. But marketing should not be confused with significant deployments of corporate assets. For example, British Petroleum's marketing campaign, which is all about looking for alternative energy sources, makes the consuming public feel good about purchasing BP products. But if BP had redeployed billions of dollars into environmental investments that yielded no profits, and its stock plummeted, one would certainly expect the investing public to transfer its money to a competitor.
What the investing and consuming public really means by “social responsibility” is:
--Be transparent in your financial reporting.
--Produce a quality product, and don’t misrepresent it.
--If you know something about the product that endangers the consumer, be forthright and let the public know.
--Do not use predatory practices in offshore manufacturing, such as child labor.
--Do not pollute your environment or other environments, and adhere to laws and regulations.
--Be respectful, fair and open in your employment practices.
In other words, corporate social responsibility actually refers largely to what the company does not do. I think this is a clarification that should be understood by all constituencies.
Japanese vs. American Management Style
Two teams of American and Japanese corporations have a boat race. On the big day the Japanese win by a mile.
The discouraged Americans hire a consulting firm to investigate the problem. The findings are that the Japanese team had eight people rowing and one person steering while the American team had one rower and eight people steering. Based on these results, the American team is completely reorganized to include four steering managers, four steering area managers and a new performance review system for the person rowing the boat to provide work incentive.
The following year the Japanese win again, so the Americans lay off the rower for poor performance and give the manager a bonus for discovering the problem.
The discouraged Americans hire a consulting firm to investigate the problem. The findings are that the Japanese team had eight people rowing and one person steering while the American team had one rower and eight people steering. Based on these results, the American team is completely reorganized to include four steering managers, four steering area managers and a new performance review system for the person rowing the boat to provide work incentive.
The following year the Japanese win again, so the Americans lay off the rower for poor performance and give the manager a bonus for discovering the problem.
Some Interesting Facts !!!!!!!!!!
1. The average women consumes 6lbs of lipstick in her lifetime
2. A sneeze travels out of your nose at 100mph
3. No piece of paper can be folded more then 7 times
4. Lizards communicate by doing push-ups
5. You burn 20 calories an hour chewing gum
6. Licking a stamp burns 10 calories
7. "Q" is the only letter in the alphabet not appearing in the name of any U.S. state
8. You don't have to be a lawyer to be a Supreme Court Justice
9. Chewing gum while peeling onions will prevent you from crying
10. Right-handed people live, on an average, live nine years longer than left-handed people.
11. The average bed is home to over 6 billion dust mites.
12. There are 333 toilet paper squares on a toilet paper roll.
13. Apples, not caffeine, are more efficient at waking you up in the morning.
14. People do not get sick from cold weather; it's from being indoors a lot more.
15. When you sneeze, all bodily functions stop ... even your heart!
16. Your feet are bigger in the afternoon than the rest of the day.
17. In most television commercials advertising milk, a mixture of white paint and a little thinner is used in place of the milk.
18. "Dreamt" is the only English word that ends in the letters "mt".
19. Los Angeles' full name is "El Pueblo de Nuestra Senora la Reina de los Angeles de Porciuncula"
20. Mosquitoes are attracted to people who just ate bananas
2. A sneeze travels out of your nose at 100mph
3. No piece of paper can be folded more then 7 times
4. Lizards communicate by doing push-ups
5. You burn 20 calories an hour chewing gum
6. Licking a stamp burns 10 calories
7. "Q" is the only letter in the alphabet not appearing in the name of any U.S. state
8. You don't have to be a lawyer to be a Supreme Court Justice
9. Chewing gum while peeling onions will prevent you from crying
10. Right-handed people live, on an average, live nine years longer than left-handed people.
11. The average bed is home to over 6 billion dust mites.
12. There are 333 toilet paper squares on a toilet paper roll.
13. Apples, not caffeine, are more efficient at waking you up in the morning.
14. People do not get sick from cold weather; it's from being indoors a lot more.
15. When you sneeze, all bodily functions stop ... even your heart!
16. Your feet are bigger in the afternoon than the rest of the day.
17. In most television commercials advertising milk, a mixture of white paint and a little thinner is used in place of the milk.
18. "Dreamt" is the only English word that ends in the letters "mt".
19. Los Angeles' full name is "El Pueblo de Nuestra Senora la Reina de los Angeles de Porciuncula"
20. Mosquitoes are attracted to people who just ate bananas
Twenty New Management Styles
1) MANAGING BY WALKING FASTER THEN THE EMPLOYEES
These kind of managers you will always see in the corridor, ten steps away. "We'll have to talk" you can hear them say, just as they have disappeared around the corner.
2) MANAGING BY STARING OUT OF THE WINDOW
These managers you usually meet with their backside faced to you with their hands in their pockets. When you talk to them, their thoughts keep staring out
of the windows.
3) MANAGING BY POST-IT'S
Some managers forget everything. They want to impress you with their 'busy'ness by continuously writing on Post-it's while you are talking.
4) MANAGING BY DELEGATION TO THE SECRETARY
These managers just delegate everything to the secretary. If He is good, He knows what she must do.
5) MANAGING BY KNOWING NOTHING
These managers don't really know anything at all. They let YOU give answers. Meanwhile they fill the time with nice anecdotes of irrelevant cases.
6) MANAGING BY CONCEPTUAL THINKING
These people try to explain the present from a theoretical view of the far future. The idea that this never will work, completely satisfies them: They will always have something to talk about.
7) MANAGING BY HIDING INFORMATION
Information hiders are aware of the market value of strictly secret kept information. You must be very thankful to get any information at all. Beware of simulants from category 5!
8) MANAGING BY DOING EXACTLY WHAT THE BOSS SAYS
These managers prevent their bosses from creative thinking. Else they got more work to do.
9) MANAGING BY WALKING ONE FOOT BEHIND THE BOSS
In hierarchical organizations you can watch those groups walking in the corridor. The more equal managers are directly followed by the lesser equal managers, and so on.
10) MANAGING BY SMILING AND WEARING NICE SUITS
If you drink beer with them, lunch with them, smile to them and also wear nice suits, nothing can stop your career anymore.
11) MANAGING BY STUDYING
Despite their continual attendances of all kind of studies and congresses, they still belong to category 5. The longer they learn, the further they get from
the practice.
12) MANAGING BY CREATING VAGUE OVERHEAD SHEETS
Do you know them? Those sheets with some big arrows, boxes or circles? These sheets provide the ultimate proof of their overall brilliance.
13) MANAGING BY OPEN DOOR AND EMPTY ROOM
This is a major improvement of the older 'OPEN DOOR' management style. Now you can really walk in and out anytime you want. Nobody ever knows where these managers are.
14) MANAGING BY SPEAKING WITH OTHER MANAGERS
This kind of managing is very popular. It will give them within a few hours the same information as an employee can tell them in 15 minutes.
15) MANAGING BY HAVING A NON SUPPORTING INFRASTRUCTURE
In an organization with a hopeless infrastructure, managers are really necessary. These managers will naturally prevent the organization from having a better infrastructure.
16) BUA MANAGEMENT ( BY USING ABBREVIATIONS )
This management style is ATRASACWOC. ( Adopted To Reach A Shorter And Clearer Way Of Communication )
17) MANAGING BY USING BUZZ WORDS
These managers like to bluff your head off with hip, nearly undefined, terms.
18) MANAGING BY REORGANIZATION
If they think there is nothing more to organize, they reorganize.
19) MANAGING BY BELIEVING
These managers must be spiritual educated, because they have no clues at all.
20) MANAGING BY FORGETTING PROMISES
If you remind them to one of their promisses, the priority of that promise is to low to remember.
These kind of managers you will always see in the corridor, ten steps away. "We'll have to talk" you can hear them say, just as they have disappeared around the corner.
2) MANAGING BY STARING OUT OF THE WINDOW
These managers you usually meet with their backside faced to you with their hands in their pockets. When you talk to them, their thoughts keep staring out
of the windows.
3) MANAGING BY POST-IT'S
Some managers forget everything. They want to impress you with their 'busy'ness by continuously writing on Post-it's while you are talking.
4) MANAGING BY DELEGATION TO THE SECRETARY
These managers just delegate everything to the secretary. If He is good, He knows what she must do.
5) MANAGING BY KNOWING NOTHING
These managers don't really know anything at all. They let YOU give answers. Meanwhile they fill the time with nice anecdotes of irrelevant cases.
6) MANAGING BY CONCEPTUAL THINKING
These people try to explain the present from a theoretical view of the far future. The idea that this never will work, completely satisfies them: They will always have something to talk about.
7) MANAGING BY HIDING INFORMATION
Information hiders are aware of the market value of strictly secret kept information. You must be very thankful to get any information at all. Beware of simulants from category 5!
8) MANAGING BY DOING EXACTLY WHAT THE BOSS SAYS
These managers prevent their bosses from creative thinking. Else they got more work to do.
9) MANAGING BY WALKING ONE FOOT BEHIND THE BOSS
In hierarchical organizations you can watch those groups walking in the corridor. The more equal managers are directly followed by the lesser equal managers, and so on.
10) MANAGING BY SMILING AND WEARING NICE SUITS
If you drink beer with them, lunch with them, smile to them and also wear nice suits, nothing can stop your career anymore.
11) MANAGING BY STUDYING
Despite their continual attendances of all kind of studies and congresses, they still belong to category 5. The longer they learn, the further they get from
the practice.
12) MANAGING BY CREATING VAGUE OVERHEAD SHEETS
Do you know them? Those sheets with some big arrows, boxes or circles? These sheets provide the ultimate proof of their overall brilliance.
13) MANAGING BY OPEN DOOR AND EMPTY ROOM
This is a major improvement of the older 'OPEN DOOR' management style. Now you can really walk in and out anytime you want. Nobody ever knows where these managers are.
14) MANAGING BY SPEAKING WITH OTHER MANAGERS
This kind of managing is very popular. It will give them within a few hours the same information as an employee can tell them in 15 minutes.
15) MANAGING BY HAVING A NON SUPPORTING INFRASTRUCTURE
In an organization with a hopeless infrastructure, managers are really necessary. These managers will naturally prevent the organization from having a better infrastructure.
16) BUA MANAGEMENT ( BY USING ABBREVIATIONS )
This management style is ATRASACWOC. ( Adopted To Reach A Shorter And Clearer Way Of Communication )
17) MANAGING BY USING BUZZ WORDS
These managers like to bluff your head off with hip, nearly undefined, terms.
18) MANAGING BY REORGANIZATION
If they think there is nothing more to organize, they reorganize.
19) MANAGING BY BELIEVING
These managers must be spiritual educated, because they have no clues at all.
20) MANAGING BY FORGETTING PROMISES
If you remind them to one of their promisses, the priority of that promise is to low to remember.
The Rich DeVos Guide to Good Decision Making
I have identified eight principles Rich DeVos uses whenever he has a difficult decision to make.
These eight principles have made him one of the most effective and successful decision makers of all time:
Pray:
Prayer is two-way communication, so talk to God and ask him for wisdom – then listen for his answer.
Define the Decision that Must be Made:
Ask yourself: What am I trying to achieve with this decision? What is the problem that must be solved? What are my options? Avoid looking at the decision in either/or terms. There are often three or more options to any decision, so think creatively and expand your options.
Gather Information:
Get as much information as possible – but don’t wait too long to decide. Avoid getting caught in “the paralysis of analysis.” Usually a good decision can be made with considerably less than 100 percent of the available information; 50 to 75 percent is usually sufficient.
Make a List of Pros and Cons:
This will help you to think clearly and logically about the decision you must make.
Listen to Your Instincts and Intuition:
This does not mean, “trust your feelings.” Feelings are never a good substitute for clear-eyed analysis. But most decisions are improved by listening to your intuition as well as your logic.
If Still Undecided, Consider Your Worst-Case Scenario:
What is the worst thing that can happen if you decide this way or that way? Considering your worst-case scenario will help you identify the uncertainty and anxiety that keep you from deciding – and it will bring clarity to your thinking.
Seek Counsel from Trusted Advisors:
Proverbs 11:14 (KJV) tells us, “In the multitude of counsellors there is safety.” Sometimes an outside perspective can bring clarity to the situation. You don’t have to take the advice of other people, but it is wise to listen and at least consider it.
Make a Decision:
Don’t stall, don’t procrastinate – decide. Then act on your decision and trust the guidance God gave you in answer to your prayer.
These eight principles have made him one of the most effective and successful decision makers of all time:
Pray:
Prayer is two-way communication, so talk to God and ask him for wisdom – then listen for his answer.
Define the Decision that Must be Made:
Ask yourself: What am I trying to achieve with this decision? What is the problem that must be solved? What are my options? Avoid looking at the decision in either/or terms. There are often three or more options to any decision, so think creatively and expand your options.
Gather Information:
Get as much information as possible – but don’t wait too long to decide. Avoid getting caught in “the paralysis of analysis.” Usually a good decision can be made with considerably less than 100 percent of the available information; 50 to 75 percent is usually sufficient.
Make a List of Pros and Cons:
This will help you to think clearly and logically about the decision you must make.
Listen to Your Instincts and Intuition:
This does not mean, “trust your feelings.” Feelings are never a good substitute for clear-eyed analysis. But most decisions are improved by listening to your intuition as well as your logic.
If Still Undecided, Consider Your Worst-Case Scenario:
What is the worst thing that can happen if you decide this way or that way? Considering your worst-case scenario will help you identify the uncertainty and anxiety that keep you from deciding – and it will bring clarity to your thinking.
Seek Counsel from Trusted Advisors:
Proverbs 11:14 (KJV) tells us, “In the multitude of counsellors there is safety.” Sometimes an outside perspective can bring clarity to the situation. You don’t have to take the advice of other people, but it is wise to listen and at least consider it.
Make a Decision:
Don’t stall, don’t procrastinate – decide. Then act on your decision and trust the guidance God gave you in answer to your prayer.
How to Set and Attain Goals for Success
First, let's focus on a few broad-brush concepts that will give you a sturdy foundation for setting your goals. Then, we will look at steps to achieving them.
Why Goal Setting is Important
In a fabled Harvard University study only three percent of Harvard students asked set and wrote goals on a regular basis. The stunning revelation of this study is that 30 years later, 50 percent of the total net worth of the group was held by just three percent of the group. You guessed it! They were the three percent that had a habit of setting and writing goals as students, then continued to write goals and review them regularly.
Identify Your Life Values
There is no satisfaction in a goal you meet if in meeting it you have bent or broken a life value. Let's say your life values include "Thou shall not steal", or "I will walk with integrity", and you meet a major financial goal using dishonesty or trickery. When your acts fall out of balance with your beliefs you throw yourself off balance, you may well feel moral angst and discomfort in the victory, which robs you of the joy of your victory.
Make it Your Own Goal
Your goals must be your own. I like to think of these as guiltless goals. Weight loss goals are a perfect example. Planning to lose weight because you want to make a spouse happy is a sure path to defeat and depression. The weight you lose for someone else never stays off. Your goals must be your own and they must inspire you.
Few but Inspiring
Set inspiring goals, but limit yourself to setting three short-term goals that are a little stretch, and as many long term goals as you want. Long-term goals could be humorous and should really stretch you. Large inspiring goals put your subconscious mind to work creating paths of achievement. As you set short-term goals, choose goals that feed reaching your larger goal. Your goals should also inspire you and measure you as a person. I always like to know where I am in relationship to my goals.
Goals Should be Clear, Specific, and Measurable
The more specific your goals, the more focused your mind becomes. Zig Ziglar, arguably the greatest motivational speaker of our time, asks his audiences a question you might well ask yourself, "do you want to be a meaningful specific, or a wandering generality?"
When you set your goal be sure to answer these three questions:
Do I really want this goal? How badly do I want it? Am I willing to do what it takes to achieve it?
Skip the How to … for Now!
Setting big, specific, measurable and inspiring goals can be a scary matter, but Kevin Lawrence proclaims, "We don't have to know how to achieve our goals, we just have to want to achieve them. A lot of people fail to achieve their goals in life because they tell themselves they don't know how. This is just an excuse for inaction. The truth is, when we focus on what we want with passion, the way to get there becomes evident."
Reveal Your Goals
That's right. Tell people what your goal is and ask for help in reaching it. Successful people enjoy helping others reach their success. Telling others about your goals creates a compelling motivation toward action:
1) You never know who and why someone might help you.
2) You feel accountable, so you will take action towards achieving your goals.
A word to the wise … tell the positive people in your life your goals. Don't bother telling those who have no aspirations of their own, they will douse your dreams with cold water.
Reward Yourself
When you hit a milestone along the way, reward yourself. Plan each milestone, and your reward will help keep you focused.
Take Action. Now.
I have built 19 successful companies on three continents. The constants have been setting and working toward achieving specific goals. Here are the 12 most powerful ideas I have ever used in setting and reaching my goals:
1) Define your vision. Make sure you know exactly what you really want. (Not just nice to have.) You must be clear and specific.
2) Set as many goals as you want long-term. Some of them may be huge; use your short-term goals to help you achieve long-term ones.
3) Make plans and take proper actions, not just actions.
4) Place a placard in plain view of your work area that reads, "Is this the best use of my time right now? Will it help me reach my goals. Discipline yourself to comply with it.
5) Take six steps/actions every day toward reaching your goals. The top six things on your daily action list should focus on your goals. Otherwise, you fall victim to the tyranny of the urgent.
6) Be disciplined. Don't let an appetite of the moment steal any chance of certain, future success. Given the choice of staffing my team with disciplined people or motivated people, I choose the disciplined person every time.
7) Be on time.
8) Live in the moment and stay focused.
9) Make promises thoughtfully. Then, do what you promised you would do.
10) Whatever tasks you begin - finish. A scattered path of unfinished tasks takes you out of the focus - fast!
11) Be persistent. "Anything we persist in doing becomes easier to do, not because the nature of the thing has changed, but because our ability grew." Lynda J. Jones.
12) Reward yourself and celebrate each success.
Finally, as Zig Ziglar says, "A goal properly set is a goal halfway reached."
Why Goal Setting is Important
In a fabled Harvard University study only three percent of Harvard students asked set and wrote goals on a regular basis. The stunning revelation of this study is that 30 years later, 50 percent of the total net worth of the group was held by just three percent of the group. You guessed it! They were the three percent that had a habit of setting and writing goals as students, then continued to write goals and review them regularly.
Identify Your Life Values
There is no satisfaction in a goal you meet if in meeting it you have bent or broken a life value. Let's say your life values include "Thou shall not steal", or "I will walk with integrity", and you meet a major financial goal using dishonesty or trickery. When your acts fall out of balance with your beliefs you throw yourself off balance, you may well feel moral angst and discomfort in the victory, which robs you of the joy of your victory.
Make it Your Own Goal
Your goals must be your own. I like to think of these as guiltless goals. Weight loss goals are a perfect example. Planning to lose weight because you want to make a spouse happy is a sure path to defeat and depression. The weight you lose for someone else never stays off. Your goals must be your own and they must inspire you.
Few but Inspiring
Set inspiring goals, but limit yourself to setting three short-term goals that are a little stretch, and as many long term goals as you want. Long-term goals could be humorous and should really stretch you. Large inspiring goals put your subconscious mind to work creating paths of achievement. As you set short-term goals, choose goals that feed reaching your larger goal. Your goals should also inspire you and measure you as a person. I always like to know where I am in relationship to my goals.
Goals Should be Clear, Specific, and Measurable
The more specific your goals, the more focused your mind becomes. Zig Ziglar, arguably the greatest motivational speaker of our time, asks his audiences a question you might well ask yourself, "do you want to be a meaningful specific, or a wandering generality?"
When you set your goal be sure to answer these three questions:
Do I really want this goal? How badly do I want it? Am I willing to do what it takes to achieve it?
Skip the How to … for Now!
Setting big, specific, measurable and inspiring goals can be a scary matter, but Kevin Lawrence proclaims, "We don't have to know how to achieve our goals, we just have to want to achieve them. A lot of people fail to achieve their goals in life because they tell themselves they don't know how. This is just an excuse for inaction. The truth is, when we focus on what we want with passion, the way to get there becomes evident."
Reveal Your Goals
That's right. Tell people what your goal is and ask for help in reaching it. Successful people enjoy helping others reach their success. Telling others about your goals creates a compelling motivation toward action:
1) You never know who and why someone might help you.
2) You feel accountable, so you will take action towards achieving your goals.
A word to the wise … tell the positive people in your life your goals. Don't bother telling those who have no aspirations of their own, they will douse your dreams with cold water.
Reward Yourself
When you hit a milestone along the way, reward yourself. Plan each milestone, and your reward will help keep you focused.
Take Action. Now.
I have built 19 successful companies on three continents. The constants have been setting and working toward achieving specific goals. Here are the 12 most powerful ideas I have ever used in setting and reaching my goals:
1) Define your vision. Make sure you know exactly what you really want. (Not just nice to have.) You must be clear and specific.
2) Set as many goals as you want long-term. Some of them may be huge; use your short-term goals to help you achieve long-term ones.
3) Make plans and take proper actions, not just actions.
4) Place a placard in plain view of your work area that reads, "Is this the best use of my time right now? Will it help me reach my goals. Discipline yourself to comply with it.
5) Take six steps/actions every day toward reaching your goals. The top six things on your daily action list should focus on your goals. Otherwise, you fall victim to the tyranny of the urgent.
6) Be disciplined. Don't let an appetite of the moment steal any chance of certain, future success. Given the choice of staffing my team with disciplined people or motivated people, I choose the disciplined person every time.
7) Be on time.
8) Live in the moment and stay focused.
9) Make promises thoughtfully. Then, do what you promised you would do.
10) Whatever tasks you begin - finish. A scattered path of unfinished tasks takes you out of the focus - fast!
11) Be persistent. "Anything we persist in doing becomes easier to do, not because the nature of the thing has changed, but because our ability grew." Lynda J. Jones.
12) Reward yourself and celebrate each success.
Finally, as Zig Ziglar says, "A goal properly set is a goal halfway reached."
The PNP Approach to Solving Negative Situations
It isn't easy to let someone down. I recently had a gig scheduled up in Sacramento to perform at a benefit function. My partner in the band and I agreed to do the gig under the understanding that a sound system would be provided for us. Unfortunately, I didn't control all of the aspects of the performance and the day before the concert found out the event coordinator had no sound system available to us. My partner in the band would not agree to cart all of our equipment up to Sacramento from the Bay Area to make the gig. We had to cancel. I was caught in the middle. Now my word was jeopardized and my friends might be upset at me - not to mention the people who planned the event.
We've all had situations where we've let someone down. It happens. I believe in keeping our word. Jesus said, "let your yes be yes and your no be no" -- words I've always felt were good to live by.
What do we do when keeping our word is out of our control?
First, if we break our word we must do it tactfully, with full gratefulness for the opportunity. Second, we must immediately take steps to pick up from the letdown.
It is similar to the idea of surrounding a negative with two positives (the PNP approach). Over the past year, I've learned to pretty much just let all negatives go, because it does not help to focus on them nor does it help to tell someone something negative about them. If you have to deliver negative news, at least try to surround it with two positives.
This thought process works in business as follows. You have a complaint about your job. Rather than blast off a flaming email to your manager razing him about how his inability to solve a problem is now all his fault, we can try the PNP approach.
Positive-negative-positive. "Hi, manager, I like the new (positive) we've implemented this past month. One thing that might also help is to consider improving (negative issue) to help alleviate (concern). Thanks for also helping with the (positive)." I've found this works very, very well with my managers and fellow employees.
So in the case of letting down my friends I've decided to immediately invite them to my house for a dinner party. It will be a good occasion to get together and will cost me a little bit of time and money -- but that positive should help them quickly dismiss my no-show at their benefit.
And guess what -- next year, if I say yes, I'm going to be there.
We've all had situations where we've let someone down. It happens. I believe in keeping our word. Jesus said, "let your yes be yes and your no be no" -- words I've always felt were good to live by.
What do we do when keeping our word is out of our control?
First, if we break our word we must do it tactfully, with full gratefulness for the opportunity. Second, we must immediately take steps to pick up from the letdown.
It is similar to the idea of surrounding a negative with two positives (the PNP approach). Over the past year, I've learned to pretty much just let all negatives go, because it does not help to focus on them nor does it help to tell someone something negative about them. If you have to deliver negative news, at least try to surround it with two positives.
This thought process works in business as follows. You have a complaint about your job. Rather than blast off a flaming email to your manager razing him about how his inability to solve a problem is now all his fault, we can try the PNP approach.
Positive-negative-positive. "Hi, manager, I like the new (positive) we've implemented this past month. One thing that might also help is to consider improving (negative issue) to help alleviate (concern). Thanks for also helping with the (positive)." I've found this works very, very well with my managers and fellow employees.
So in the case of letting down my friends I've decided to immediately invite them to my house for a dinner party. It will be a good occasion to get together and will cost me a little bit of time and money -- but that positive should help them quickly dismiss my no-show at their benefit.
And guess what -- next year, if I say yes, I'm going to be there.
Saturday, October 18, 2008
The Top 15 Things Found in Bill Gates's Desk
# A frame holding the first $1 billion he made.
# Those compromising pictures of Janet Reno that ultimately saved Microsoft's monopolistic bacon.
# iPhone, iBook, Airbook, iPod, etc.
# "Past Due" notices from Hell's Souls Receivable Department.
# A copy of "Home Haircuts for Dummies."
# $863,979.42 in loose change.
# Crumpled copy of Al Gore's patent on the Internet.
# A copy of Machiavelli's "The Prince," an IOU from Pope Benedict XVI, Jimmy Hoffa's wristwatch and some Skittles.
# God's cell phone number.
# Memo to Microsoft employees now allowing consumption of apples and Big Macs.
# His old cardboard "Will Compute for Food" sign.
# Steve Jobs' life force -- and damn if it didn't get out of the bottle again!
# The title deed to Liechtenstein.
# Unsent letter to girl who spurned him in 10th grade, written on back of bank statement.
and the Number 1 Thing Found in Bill Gates's Desk...
# Severed limbs of the Microsoft product developer who wrote the original specifications for Windows Vista.
# Those compromising pictures of Janet Reno that ultimately saved Microsoft's monopolistic bacon.
# iPhone, iBook, Airbook, iPod, etc.
# "Past Due" notices from Hell's Souls Receivable Department.
# A copy of "Home Haircuts for Dummies."
# $863,979.42 in loose change.
# Crumpled copy of Al Gore's patent on the Internet.
# A copy of Machiavelli's "The Prince," an IOU from Pope Benedict XVI, Jimmy Hoffa's wristwatch and some Skittles.
# God's cell phone number.
# Memo to Microsoft employees now allowing consumption of apples and Big Macs.
# His old cardboard "Will Compute for Food" sign.
# Steve Jobs' life force -- and damn if it didn't get out of the bottle again!
# The title deed to Liechtenstein.
# Unsent letter to girl who spurned him in 10th grade, written on back of bank statement.
and the Number 1 Thing Found in Bill Gates's Desk...
# Severed limbs of the Microsoft product developer who wrote the original specifications for Windows Vista.
Sixty Amazing-but-True Facts!
o In the weightlessness of space a frozen pea will explode if it comes in contact with Pepsi.
o The increased electricity used by modern appliances is causing a shift in the Earth's magnetic field. By the year 2327, the North Pole will be located in mid-Kansas, while the South Pole will be just off the coast of East Africa.
o The idea for "tribbles" in "Star Trek" came from gerbils, since some gerbils are actually born pregnant.
o Male rhesus monkeys often hang from tree branches by their amazing prehensile penises.
o Johnny Plessey batted .331 for the Cleveland Spiders in 1891, even though he spent the entire season batting with a rolled-up, lacquered copy of the Toledo Post-Dispatch.
o Smearing a small amount of dog feces on an insect bite will relieve the itching and swelling.
o The Boeing 747 is capable of flying upside-down if it weren't for the fact that the wings would shear off when trying to roll it over.
o The trucking company Elvis Presley worked at as a young man was owned by Frank Sinatra.
o The only golf course on the island of Tonga has 15 holes, and there's no penalty if a monkey steals your golf ball.
o Legislation passed during WWI making it illegal to say "gesundheit" to a sneezer was never repealed.
o Manatees possess vocal chords which give them the ability to speak like humans, but don't do so because they have no ears with which to hear the sound.
o SCUBA divers cannot pass gas at depths of 33 feet or below.
o Catfish are the only animals that naturally have an ODD number of whiskers.
o Replying more than 100 times to the same piece of spam e-mail will overwhelm the sender's system and interfere with their ability to send any more spam.
o Polar bears can eat as many as 86 penguins in a single sitting.
o The first McDonald's restaurant opened for business in 1952 in Edinburgh, Scotland, and featured the McHaggis sandwich.
o The Air Force's F-117 fighter uses aerodynamics discovered during research into how bumblebees fly.
o You *can* get blood from a stone, but only if contains at least 17 percent bauxite.
o Silly Putty was "discovered" as the residue left behind after the first latex condoms were produced. It's not widely publicized for obvious reasons.
o Approximately one-sixth of your life is spent on Wednesdays.
o The skin needed for elbow transplants must be taken from the scrotum of a cadaver.
o The sport of jai alai originated from a game played by Incan priests who held cats by their tails and swung at leather balls. The cats would instinctively grab at the ball with their claws, thus enabling players to catch them.
o A cat's purr has the same romance-enhancing frequency as the voice of singer Barry White.
o The typewriter was invented by Hungarian immigrant Qwert Yuiop, who left his "signature" on the keyboard.
o The volume of water that the Giant Sequoia tree consumes in a 24-hour period contains enough suspended minerals to pave 17.3 feet of a 4-lane concrete freeway.
o King Henry VIII slept with a gigantic axe.
o Because printed materials are being replaced by CD-ROM, microfiche and the Internet, libraries that previously sank into their foundations under the weight of their books are now in danger of collapsing in extremely high winds.
o In 1843, a Parisian street mime got stuck in his imaginary box and consequently died of starvation.
o Touch-tone telephone keypads were originally planned to have buttons for Police and Fire Departments, but they were replaced with * and # when the project was cancelled in favor of developing the 911 system.
o Human saliva has a boiling point three times that of regular water.
o Calvin, of the "Calvin and Hobbes" comic strip, was patterned after President Calvin Coolidge, who had a pet tiger as a boy.
o Watching an hour-long soap opera burns more calories than watching a three-hour baseball game.
o Until 1978, Camel cigarettes contained minute particles of real camels.
o You can actually sharpen the blades on a pencil sharpener by wrapping your pencils in aluminum foil before inserting them.
o To human taste buds, Zima is virtually indistinguishable from zebra urine.
o Seven out of every ten hockey-playing Canadians will lose a tooth during a game. For Canadians who don't play hockey, that figure drops to five out of ten.
o A dog's naked behind leaves absolutely no bacteria when pressed against carpet.
o A team of University of Virginia researchers released a study promoting the practice of picking one's nose, claiming that the health benefits of keeping nasal passages free from infectious blockages far outweigh the negative social connotations.
o Among items left behind at Osama bin Laden's headquarters in Afghanistan were 27 issues of Mad Magazine. Al Qaeda members have admitted that bin Laden is reportedly an avid reader.
o Urine from male cape water buffaloes is so flammable that some tribes use it for lantern fuel.
o At the first World Cup championship in Uruguay, 1930, the soccer balls were actually monkey skulls wrapped in paper and leather.
o Every Labrador retriever dreams about bananas.
o If you put a bee in a film canister for two hours, it will go blind and leave behind its weight in honey.
o Due to the angle at which the optic nerve enters the brain, staring at a blue surface during sex greatly increases the intensity of orgasms.
o Never hold your nose and cover your mouth when sneezing, as it can blow out your eyeballs.
o Centuries ago, purchasing real estate often required having one or more limbs amputated in order to prevent the purchaser from running away to avoid repayment of the loan. Hence an expensive purchase was said to cost "an arm and a leg."
o When Mahatma Gandhi died, an autopsy revealed five gold Krugerrands in his small intestine.
o Aardvarks are allergic to radishes, but only during summer months.
o Coca-Cola was the favored drink of Pharaoh Ramses. An inscription found in his tomb, when translated, was found to be almost identical to the recipe used today.
o If you part your hair on the right side, you were born to be carnivorous. If you part it on the left, your physical and psychological make-up is that of a vegetarian.
o When immersed in liquid, a dead sparrow will make a sound like a crying baby.
o In WWII the US military planned to airdrop over France propaganda in the form of Playboy magazine, with coded messages hidden in the models' turn-ons and turn-offs. The plan was scrapped because of a staple shortage due to rationing of metal.
o Although difficult, it's possible to start a fire by rapidly rubbing together two Cool Ranch Doritos.
o Napoleon's favorite type of wood was knotty chestnut.
o The world's smartest pig, owned by a mathematics teacher in Madison, WI, memorized the multiplication tables up to 12.
o Due to the natural "momentum" of the ocean, saltwater fish cannot swim backwards.
o In ancient Greece, children of wealthy families were dipped in olive oil at birth to keep them hairless throughout their lives.
o It is nearly three miles farther to fly from Amarillo, Texas to Louisville, Kentucky than it is to return from Louisville to Amarillo.
o The "nine lives" attributed to cats is probably due to their having nine primary whiskers.
o The original inspiration for Barbie dolls comes from dolls developed by German propagandists in the late 1930s to impress young girls with the ideal notions of Aryan features. The proportions for Barbie were actually based on those of Eva Braun.
o The Venezuelan brown bat can detect and dodge individual raindrops in mid-flight, arriving safely back at his cave completely dry.
o The increased electricity used by modern appliances is causing a shift in the Earth's magnetic field. By the year 2327, the North Pole will be located in mid-Kansas, while the South Pole will be just off the coast of East Africa.
o The idea for "tribbles" in "Star Trek" came from gerbils, since some gerbils are actually born pregnant.
o Male rhesus monkeys often hang from tree branches by their amazing prehensile penises.
o Johnny Plessey batted .331 for the Cleveland Spiders in 1891, even though he spent the entire season batting with a rolled-up, lacquered copy of the Toledo Post-Dispatch.
o Smearing a small amount of dog feces on an insect bite will relieve the itching and swelling.
o The Boeing 747 is capable of flying upside-down if it weren't for the fact that the wings would shear off when trying to roll it over.
o The trucking company Elvis Presley worked at as a young man was owned by Frank Sinatra.
o The only golf course on the island of Tonga has 15 holes, and there's no penalty if a monkey steals your golf ball.
o Legislation passed during WWI making it illegal to say "gesundheit" to a sneezer was never repealed.
o Manatees possess vocal chords which give them the ability to speak like humans, but don't do so because they have no ears with which to hear the sound.
o SCUBA divers cannot pass gas at depths of 33 feet or below.
o Catfish are the only animals that naturally have an ODD number of whiskers.
o Replying more than 100 times to the same piece of spam e-mail will overwhelm the sender's system and interfere with their ability to send any more spam.
o Polar bears can eat as many as 86 penguins in a single sitting.
o The first McDonald's restaurant opened for business in 1952 in Edinburgh, Scotland, and featured the McHaggis sandwich.
o The Air Force's F-117 fighter uses aerodynamics discovered during research into how bumblebees fly.
o You *can* get blood from a stone, but only if contains at least 17 percent bauxite.
o Silly Putty was "discovered" as the residue left behind after the first latex condoms were produced. It's not widely publicized for obvious reasons.
o Approximately one-sixth of your life is spent on Wednesdays.
o The skin needed for elbow transplants must be taken from the scrotum of a cadaver.
o The sport of jai alai originated from a game played by Incan priests who held cats by their tails and swung at leather balls. The cats would instinctively grab at the ball with their claws, thus enabling players to catch them.
o A cat's purr has the same romance-enhancing frequency as the voice of singer Barry White.
o The typewriter was invented by Hungarian immigrant Qwert Yuiop, who left his "signature" on the keyboard.
o The volume of water that the Giant Sequoia tree consumes in a 24-hour period contains enough suspended minerals to pave 17.3 feet of a 4-lane concrete freeway.
o King Henry VIII slept with a gigantic axe.
o Because printed materials are being replaced by CD-ROM, microfiche and the Internet, libraries that previously sank into their foundations under the weight of their books are now in danger of collapsing in extremely high winds.
o In 1843, a Parisian street mime got stuck in his imaginary box and consequently died of starvation.
o Touch-tone telephone keypads were originally planned to have buttons for Police and Fire Departments, but they were replaced with * and # when the project was cancelled in favor of developing the 911 system.
o Human saliva has a boiling point three times that of regular water.
o Calvin, of the "Calvin and Hobbes" comic strip, was patterned after President Calvin Coolidge, who had a pet tiger as a boy.
o Watching an hour-long soap opera burns more calories than watching a three-hour baseball game.
o Until 1978, Camel cigarettes contained minute particles of real camels.
o You can actually sharpen the blades on a pencil sharpener by wrapping your pencils in aluminum foil before inserting them.
o To human taste buds, Zima is virtually indistinguishable from zebra urine.
o Seven out of every ten hockey-playing Canadians will lose a tooth during a game. For Canadians who don't play hockey, that figure drops to five out of ten.
o A dog's naked behind leaves absolutely no bacteria when pressed against carpet.
o A team of University of Virginia researchers released a study promoting the practice of picking one's nose, claiming that the health benefits of keeping nasal passages free from infectious blockages far outweigh the negative social connotations.
o Among items left behind at Osama bin Laden's headquarters in Afghanistan were 27 issues of Mad Magazine. Al Qaeda members have admitted that bin Laden is reportedly an avid reader.
o Urine from male cape water buffaloes is so flammable that some tribes use it for lantern fuel.
o At the first World Cup championship in Uruguay, 1930, the soccer balls were actually monkey skulls wrapped in paper and leather.
o Every Labrador retriever dreams about bananas.
o If you put a bee in a film canister for two hours, it will go blind and leave behind its weight in honey.
o Due to the angle at which the optic nerve enters the brain, staring at a blue surface during sex greatly increases the intensity of orgasms.
o Never hold your nose and cover your mouth when sneezing, as it can blow out your eyeballs.
o Centuries ago, purchasing real estate often required having one or more limbs amputated in order to prevent the purchaser from running away to avoid repayment of the loan. Hence an expensive purchase was said to cost "an arm and a leg."
o When Mahatma Gandhi died, an autopsy revealed five gold Krugerrands in his small intestine.
o Aardvarks are allergic to radishes, but only during summer months.
o Coca-Cola was the favored drink of Pharaoh Ramses. An inscription found in his tomb, when translated, was found to be almost identical to the recipe used today.
o If you part your hair on the right side, you were born to be carnivorous. If you part it on the left, your physical and psychological make-up is that of a vegetarian.
o When immersed in liquid, a dead sparrow will make a sound like a crying baby.
o In WWII the US military planned to airdrop over France propaganda in the form of Playboy magazine, with coded messages hidden in the models' turn-ons and turn-offs. The plan was scrapped because of a staple shortage due to rationing of metal.
o Although difficult, it's possible to start a fire by rapidly rubbing together two Cool Ranch Doritos.
o Napoleon's favorite type of wood was knotty chestnut.
o The world's smartest pig, owned by a mathematics teacher in Madison, WI, memorized the multiplication tables up to 12.
o Due to the natural "momentum" of the ocean, saltwater fish cannot swim backwards.
o In ancient Greece, children of wealthy families were dipped in olive oil at birth to keep them hairless throughout their lives.
o It is nearly three miles farther to fly from Amarillo, Texas to Louisville, Kentucky than it is to return from Louisville to Amarillo.
o The "nine lives" attributed to cats is probably due to their having nine primary whiskers.
o The original inspiration for Barbie dolls comes from dolls developed by German propagandists in the late 1930s to impress young girls with the ideal notions of Aryan features. The proportions for Barbie were actually based on those of Eva Braun.
o The Venezuelan brown bat can detect and dodge individual raindrops in mid-flight, arriving safely back at his cave completely dry.
Becoming a Better Listener
Listening is an integral part of the communication process but it is also the part that is overlooked most frequently. Many people spend a great deal of time polishing their speaking skills but put little or no effort into becoming a better listener. The art of listening really isn't very difficult and you can improve your listening skills in just a few simple steps.
Perhaps the most important tip for being a better listener is to give the speaker your undivided attention. Be sure to concentrate on the speakers words and resist the temptations to tune out their message. While speaking on the phone many people participate in other activities such as checking email, reading newspapers and other activities that distract from the conversation. Even in a face to face situation many listeners zone out by either thinking about their response to the speaker or daydreaming about something completely off topic. By allowing yourself to be distracted, you are not listening as well as you could be. Even just a small amount of distraction could result in you missing a critical point of the speaker's presentation. Focusing 100% on the speaker, however, will ensure that you are listening well and taking in all of the pertinent information.
Part of being a good listener is making sure that everything you hear comes directly from the speaker and not from your interpretation of their words. This means that as the speaker is talking, listen to the words as they are being spoken instead of trying to guess the point that the speaker is trying to make. Many people are guilty of jumping to conclusions this way and this hurts their listening ability. People who do this often don't hear the speaker's message because it is blocked out by their own assumptions. Good listeners take in information as the words are spoken instead of thinking ahead and forming their own conclusions.
Creating mental images of the speaker's words is another way to become a better listener. This visualization process allows you to really comprehend the words you are hearing. Visualization techniques can enhance the way that people process information. These mental images will help you to retain the information you have just heard and this enhanced comprehension makes you a better listener.
Asking questions that relate to the speaker's presentation can also help you to become a better listener. It's important to ask questions without allowing the formulation of the questions to interfere with your listening. If you latch onto one of the speaker's key points and spend the rest of the conversation thinking up a question you will miss a lot of information. However, if you ask your questions immediately when they arise, you can have them answered in the context of the presentation without having it affect your listening abilities. Asking questions is an important part of listening because it lets the speaker know that you are following what he is saying and that you are interested in learning more about the topic.
Being mindful of your body language is another way to be a good listener. Be sure to not engage in body language that tells the speaker that you are not interested in their words. Crossing your arms, avoiding eye contact and wincing are all ways that you can send a message to a speaker that you are not listening carefully to them. These mannerisms can result in the conversation being cut short because the speaker does not feel you are interested in what they are saying.
Practicing your listening skills is another way to become a better listener. Make a conscientious effort to apply your listening skills each time you speak to someone or attend a presentation. You can practice your listening skills by remaining completely focused on the conversation or presentation, not trying to guess what the speaker is about to say, creating mental images of the spoken words and asking pertinent questions to affirm what you have just heard. Each time you have the opportunity to listen try to work on these elements.
While listening skills are not as widely practiced as speaking skills, they are just as important to a conversation. Being a good listener will not only ensure that you are receiving information but will affirm to the speaker that you care about the information being presented and that you understand their message.
Perhaps the most important tip for being a better listener is to give the speaker your undivided attention. Be sure to concentrate on the speakers words and resist the temptations to tune out their message. While speaking on the phone many people participate in other activities such as checking email, reading newspapers and other activities that distract from the conversation. Even in a face to face situation many listeners zone out by either thinking about their response to the speaker or daydreaming about something completely off topic. By allowing yourself to be distracted, you are not listening as well as you could be. Even just a small amount of distraction could result in you missing a critical point of the speaker's presentation. Focusing 100% on the speaker, however, will ensure that you are listening well and taking in all of the pertinent information.
Part of being a good listener is making sure that everything you hear comes directly from the speaker and not from your interpretation of their words. This means that as the speaker is talking, listen to the words as they are being spoken instead of trying to guess the point that the speaker is trying to make. Many people are guilty of jumping to conclusions this way and this hurts their listening ability. People who do this often don't hear the speaker's message because it is blocked out by their own assumptions. Good listeners take in information as the words are spoken instead of thinking ahead and forming their own conclusions.
Creating mental images of the speaker's words is another way to become a better listener. This visualization process allows you to really comprehend the words you are hearing. Visualization techniques can enhance the way that people process information. These mental images will help you to retain the information you have just heard and this enhanced comprehension makes you a better listener.
Asking questions that relate to the speaker's presentation can also help you to become a better listener. It's important to ask questions without allowing the formulation of the questions to interfere with your listening. If you latch onto one of the speaker's key points and spend the rest of the conversation thinking up a question you will miss a lot of information. However, if you ask your questions immediately when they arise, you can have them answered in the context of the presentation without having it affect your listening abilities. Asking questions is an important part of listening because it lets the speaker know that you are following what he is saying and that you are interested in learning more about the topic.
Being mindful of your body language is another way to be a good listener. Be sure to not engage in body language that tells the speaker that you are not interested in their words. Crossing your arms, avoiding eye contact and wincing are all ways that you can send a message to a speaker that you are not listening carefully to them. These mannerisms can result in the conversation being cut short because the speaker does not feel you are interested in what they are saying.
Practicing your listening skills is another way to become a better listener. Make a conscientious effort to apply your listening skills each time you speak to someone or attend a presentation. You can practice your listening skills by remaining completely focused on the conversation or presentation, not trying to guess what the speaker is about to say, creating mental images of the spoken words and asking pertinent questions to affirm what you have just heard. Each time you have the opportunity to listen try to work on these elements.
While listening skills are not as widely practiced as speaking skills, they are just as important to a conversation. Being a good listener will not only ensure that you are receiving information but will affirm to the speaker that you care about the information being presented and that you understand their message.
Ten Incredibly Nice Things to Do For Him: For the Ones Who are in a Relation
There are a number of incredibly nice things that you can do for the man in your life to let him know how much he means to you. Really thinking about his personality and hobbies and personalizing your gestures will demonstrate that you care about him. You will surprise the man in your life with your thoughtful and tailored gestures.
One incredibly nice thing you could do for him is to make arrangement to have his car professionally detailed. Many men take pride in their car and enjoy spending their time to make sure it looks and runs its best. You can let him know that you understand his fascination with his car by making the arrangements to have the car detailed. If you know that he will be out of town for a few days, try making the arrangements for that time so that it will be a surprise for him when he returns. If you are unable to do this in secret, go ahead and let him know about your plans. It's okay that it won't be a surprise because he will probably enjoy being involved in the process.
Another incredibly nice thing that you can do for the special man in your life is to take the responsibility of completing a chore around the house that he usually performs. For example if he usually takes care of mowing the lawn, plan to come home from work early one day to mow the lawn before he gets home. He will not only be excited to not have to take care of this chore but will also be excited that you recognize the effort he puts forth into completing this chore.
Purchasing a gadget that your man has his eye on is another nice thing to do for him. Many men enjoy all types of gadgets and gizmos and figuring out one that he is interested in and purchasing it for him will be a very welcomed gift. It will also show him that you were paying attention while he was talking about this gadget and you understand how much it means to him. He will appreciate that while it may not be something you would want for yourself, you realize that it is something that he will enjoy.
Still another incredibly nice thing to do for him is to take control of plans for a date. Men are usually the ones who are in charge of planning and paying for dates so he will be grateful for you making date arrangements for a night. Carefully plan out a fun date filled with activities that he will enjoy and don't rely on him to take care of any of the details. Make the arrangements, drive to the destination and pay for the date. The man in your life will feel pampered for the evening and will enjoy having the stress of date planning off his shoulders.
Surprising the man in your life by meeting him at work and taking him out to lunch or on a picnic is another incredibly nice thing you can do for him. He will enjoy getting out of the office for awhile and having some extra time to spend with you. The element of surprise will let him know that you are thinking of him. Also, having a break in his day where he can relax and enjoy your company will make the rest of the day seem to go by much more quickly for him.
Another incredibly nice thing you can do for the man in your life is to pick up a magazine or book relating to an interest he has while you are out shopping. Doing so will let him know that you understand his interest and that you want him to have some time to enjoy thinking about his favorite hobby. It also shows that you even while you were just out running a few errands you were thinking about him.
Learning about the man in your life's favorite sport is another nice thing to do for him. He may enjoy spending his weekends watching his favorite sports teams and, if you are not normally a fan of this sport, you will surprise him by taking an active interest. Try doing some research on your own to learn a little more about his favorite sport and team and the next time he is watching a game, sit with him and ask pertinent questions. He will be astonished at your knowledge and eager to teach you more.
Another incredibly nice thing to do for a man is to buy him flowers. Women receive flowers for special occasions and sometimes for no reason at all but men don't often receive flowers very often so showing up with a bouquet for him will be a welcomed surprise. He will appreciate the novelty of the gift and be delighted with the gesture.
If your taste in music differs from that of the man in your life, one incredibly nice thing you can do for him is to purchase tickets to see his favorite band in concert. While the music may not be your first choice, it's something he enjoys so give him a chance to indulge himself. He will be excited to share his music with you and will be glad that you are interested in hearing the music with him.
Finally another nice thing to do for a man is to learn to barbeque. Many men greatly enjoy barbequed foods and have even been known to brave freezing temperatures to enjoy a barbequed steak in the dead of winter. While many men love the chance to barbeque they would also appreciate the opportunity to enjoy a barbeque without having to do any of the work. Preparing a barbeque will let him know that you realize it's a meal he enjoys and that you appreciate the effort he usually puts forward to prepare this meal.
Doing something incredibly nice for a man doesn't have to be extravagant or complicated. Simple gestures that show that you understand his thoughts and feelings are those that will be most appreciated. In surprising the man in your life with some of these examples or other applicable things you will let him know how important he is to you.
One incredibly nice thing you could do for him is to make arrangement to have his car professionally detailed. Many men take pride in their car and enjoy spending their time to make sure it looks and runs its best. You can let him know that you understand his fascination with his car by making the arrangements to have the car detailed. If you know that he will be out of town for a few days, try making the arrangements for that time so that it will be a surprise for him when he returns. If you are unable to do this in secret, go ahead and let him know about your plans. It's okay that it won't be a surprise because he will probably enjoy being involved in the process.
Another incredibly nice thing that you can do for the special man in your life is to take the responsibility of completing a chore around the house that he usually performs. For example if he usually takes care of mowing the lawn, plan to come home from work early one day to mow the lawn before he gets home. He will not only be excited to not have to take care of this chore but will also be excited that you recognize the effort he puts forth into completing this chore.
Purchasing a gadget that your man has his eye on is another nice thing to do for him. Many men enjoy all types of gadgets and gizmos and figuring out one that he is interested in and purchasing it for him will be a very welcomed gift. It will also show him that you were paying attention while he was talking about this gadget and you understand how much it means to him. He will appreciate that while it may not be something you would want for yourself, you realize that it is something that he will enjoy.
Still another incredibly nice thing to do for him is to take control of plans for a date. Men are usually the ones who are in charge of planning and paying for dates so he will be grateful for you making date arrangements for a night. Carefully plan out a fun date filled with activities that he will enjoy and don't rely on him to take care of any of the details. Make the arrangements, drive to the destination and pay for the date. The man in your life will feel pampered for the evening and will enjoy having the stress of date planning off his shoulders.
Surprising the man in your life by meeting him at work and taking him out to lunch or on a picnic is another incredibly nice thing you can do for him. He will enjoy getting out of the office for awhile and having some extra time to spend with you. The element of surprise will let him know that you are thinking of him. Also, having a break in his day where he can relax and enjoy your company will make the rest of the day seem to go by much more quickly for him.
Another incredibly nice thing you can do for the man in your life is to pick up a magazine or book relating to an interest he has while you are out shopping. Doing so will let him know that you understand his interest and that you want him to have some time to enjoy thinking about his favorite hobby. It also shows that you even while you were just out running a few errands you were thinking about him.
Learning about the man in your life's favorite sport is another nice thing to do for him. He may enjoy spending his weekends watching his favorite sports teams and, if you are not normally a fan of this sport, you will surprise him by taking an active interest. Try doing some research on your own to learn a little more about his favorite sport and team and the next time he is watching a game, sit with him and ask pertinent questions. He will be astonished at your knowledge and eager to teach you more.
Another incredibly nice thing to do for a man is to buy him flowers. Women receive flowers for special occasions and sometimes for no reason at all but men don't often receive flowers very often so showing up with a bouquet for him will be a welcomed surprise. He will appreciate the novelty of the gift and be delighted with the gesture.
If your taste in music differs from that of the man in your life, one incredibly nice thing you can do for him is to purchase tickets to see his favorite band in concert. While the music may not be your first choice, it's something he enjoys so give him a chance to indulge himself. He will be excited to share his music with you and will be glad that you are interested in hearing the music with him.
Finally another nice thing to do for a man is to learn to barbeque. Many men greatly enjoy barbequed foods and have even been known to brave freezing temperatures to enjoy a barbequed steak in the dead of winter. While many men love the chance to barbeque they would also appreciate the opportunity to enjoy a barbeque without having to do any of the work. Preparing a barbeque will let him know that you realize it's a meal he enjoys and that you appreciate the effort he usually puts forward to prepare this meal.
Doing something incredibly nice for a man doesn't have to be extravagant or complicated. Simple gestures that show that you understand his thoughts and feelings are those that will be most appreciated. In surprising the man in your life with some of these examples or other applicable things you will let him know how important he is to you.
Ten Incredibly Nice Things to Do For Her: For the Ones Who are in a Relation
You can demonstrate your love for the special woman in your life in a number of small ways. Flowers and candy on special occasions are always nice but you can also surprise a woman by offering smaller gestures on a daily basis. She will appreciate your thoughtfulness and understand that you are trying to show her how much she means to you.
One incredibly nice thing to do for her is simply to ask her how her day was and listen intently to her answer. Women enjoy talking about their personal issues and expressing an interest in her career or other areas of interest will be greatly appreciated. Listening carefully to her will let her know that you are interested in her thoughts and care about her feelings.
Cooking for a woman is another incredibly nice thing that you can do for her. Most women are the primary cooks in the relationship and giving her a night off from her usual kitchen duties is always a welcomed gesture. Don't worry if you don't know how to cook, it's really not that hard. There are many cook books and Internet sites that offer a wide variety or recipes. Pick one that sounds interesting and follow the instructions carefully.
Remembering and celebrating a small occasion is another nice gesture that women appreciate. It's always nice to celebrate on big occasions but if you remember the anniversary of another special day the woman in your life will be completely caught by surprise. For example celebrate the anniversary of the day you brought home your new puppy with a trip to a dog park.
Another incredibly nice thing to do for a woman is to give her compliments when they are unexpected. Women expect compliments when they put a lot of effort into their appearance but letting her know you think she is beautiful while she's running errands, demonstrates that you see her inner beauty shining through at all times. Compliments don't always have to be about physical characteristics either. You could compliment her on her career accomplishments and let her know that you appreciate how hard she works.
Handing over the remote control is another incredibly nice thing you can do for a woman. You may not want to sit through another episode of a home decorating show but allowing the woman in your life to indulge in this without complaining about her choice will show her that you are not belittling her interests.
If you want to do something really nice for the special woman in your life, get to know her family and friends. Woman value their relationships and she will be pleased about the fact that you take an interest in and get to know the other special people in her life. Caring about those that she loves shows her that you love her.
Still another incredibly nice thing to do for a woman is to write her a love letter and send it in the mail. Sure she sees you every day and you may even exchange emails and phone calls on a daily basis but a love letter is something that she can save in a special place and will cherish. Expressing your love in a letter is a special way to tell a woman that you care deeply about her.
Planning a trip for your woman is another incredibly nice thing you can do for her. A vacation is always nice but when you take the initiative and plan out all the details ahead of time, it shows that you want her to have the enjoyable experience of the trip but that you are willing to take care of all the planning. Women tend to take the lead in making travel arrangements and verifying the logistics of trips but if you take care of that ahead of time, the woman is free to just focus on packing for the trip.
Another incredibly nice thing to do for a woman is to surprise her at work by showing up for a lunch date. Woman always love to be surprised and your lunch date will give her the opportunity to get out of the office for a little while and enjoy some time with you. Many women skip lunch or work straight through it but giving her the opportunity to break away from her desk for even a half hour will give her a welcomed chance to relax a little bit.
Finally if you want to do something really nice for the woman in your life, it could be as simple as opening the car door for her when you go out. Women enjoy being independent but small chivalrous gestures are always appreciated. If you normally rush to the driver's side of the car and hop in, stop once in awhile to open her door first. It will show her that you want to protect and care for her and will make her feel well loved.
There are many ways you can show your love for the special woman in your life. Many of the items listed above may be seemingly small, inconsequential things but it is these little things that really show a woman that you care. Doing nice things for a woman demonstrate that you want to go out of your way to make sure that she is happy.
One incredibly nice thing to do for her is simply to ask her how her day was and listen intently to her answer. Women enjoy talking about their personal issues and expressing an interest in her career or other areas of interest will be greatly appreciated. Listening carefully to her will let her know that you are interested in her thoughts and care about her feelings.
Cooking for a woman is another incredibly nice thing that you can do for her. Most women are the primary cooks in the relationship and giving her a night off from her usual kitchen duties is always a welcomed gesture. Don't worry if you don't know how to cook, it's really not that hard. There are many cook books and Internet sites that offer a wide variety or recipes. Pick one that sounds interesting and follow the instructions carefully.
Remembering and celebrating a small occasion is another nice gesture that women appreciate. It's always nice to celebrate on big occasions but if you remember the anniversary of another special day the woman in your life will be completely caught by surprise. For example celebrate the anniversary of the day you brought home your new puppy with a trip to a dog park.
Another incredibly nice thing to do for a woman is to give her compliments when they are unexpected. Women expect compliments when they put a lot of effort into their appearance but letting her know you think she is beautiful while she's running errands, demonstrates that you see her inner beauty shining through at all times. Compliments don't always have to be about physical characteristics either. You could compliment her on her career accomplishments and let her know that you appreciate how hard she works.
Handing over the remote control is another incredibly nice thing you can do for a woman. You may not want to sit through another episode of a home decorating show but allowing the woman in your life to indulge in this without complaining about her choice will show her that you are not belittling her interests.
If you want to do something really nice for the special woman in your life, get to know her family and friends. Woman value their relationships and she will be pleased about the fact that you take an interest in and get to know the other special people in her life. Caring about those that she loves shows her that you love her.
Still another incredibly nice thing to do for a woman is to write her a love letter and send it in the mail. Sure she sees you every day and you may even exchange emails and phone calls on a daily basis but a love letter is something that she can save in a special place and will cherish. Expressing your love in a letter is a special way to tell a woman that you care deeply about her.
Planning a trip for your woman is another incredibly nice thing you can do for her. A vacation is always nice but when you take the initiative and plan out all the details ahead of time, it shows that you want her to have the enjoyable experience of the trip but that you are willing to take care of all the planning. Women tend to take the lead in making travel arrangements and verifying the logistics of trips but if you take care of that ahead of time, the woman is free to just focus on packing for the trip.
Another incredibly nice thing to do for a woman is to surprise her at work by showing up for a lunch date. Woman always love to be surprised and your lunch date will give her the opportunity to get out of the office for a little while and enjoy some time with you. Many women skip lunch or work straight through it but giving her the opportunity to break away from her desk for even a half hour will give her a welcomed chance to relax a little bit.
Finally if you want to do something really nice for the woman in your life, it could be as simple as opening the car door for her when you go out. Women enjoy being independent but small chivalrous gestures are always appreciated. If you normally rush to the driver's side of the car and hop in, stop once in awhile to open her door first. It will show her that you want to protect and care for her and will make her feel well loved.
There are many ways you can show your love for the special woman in your life. Many of the items listed above may be seemingly small, inconsequential things but it is these little things that really show a woman that you care. Doing nice things for a woman demonstrate that you want to go out of your way to make sure that she is happy.
Friday, October 17, 2008
Five ways to use money
If you think about it, there are really only five things you can do with money:
* earn it
* spend it
* save it
* invest it
* give it
That may sound simple. But when it comes to actually doing it, all sorts of questions arise, such as:
* “How much money do I need to earn?”
* “How much should I save?”
* “How much should I spend?”
* “Where should I invest it?”
* “How much should I give?”
The following Scriptures and advice will help you to begin thinking through these issues:
Earning:
Most people have to earn an income some way or another. Some people do this by working at a job, others own their own business, and still others earn their living through more unconventional means, such as investing in real estate or the stock market. Whichever way you earn your money, a key decision in this area is determining how much money you actually need to survive.
Many people fall into the trap of working more than they need to, simply because they can’t say no to the extra money. They put in overtime at work, thus depriving themselves, their family, their friends, their church, and their community of time they could spend investing in other types of capital, such as social and spiritual capital. Other people don’t work enough, thus depriving their family of the things they need and enjoy and causing others to have to pick up the slack. The key is to find the balance so you are able to earn a comfortable living without falling prey to the pitfalls of either extreme. Ask God to guide you in this area.
Spending:
The first rule of spending is to always spend less than you earn. The minute you start spending more than you’re taking in, you incur what is called negative margin or deficit. Deficit is different from a loan in that deficit adds continually to your debt and are unable to pay it back. As you keep overspending each month, your debt just keeps growing and growing. Before long, you and your entire family will become a slave to it (Proverbs 22:7; 23:4-5).
The way to avoid debt and live within your means is to create a monthly budget with different categories for things like shelter, food, clothing, transportation, and so on. A financial planner can help you develop a budget that’s right for you. But simply creating a budget won’t solve your financial problems. You have to stick to it. Be disciplined. When the money is gone from a certain category, that’s it until next month. Don’t borrow against your future, because the future is always uncertain.
If you’re already in debt, you’ll have to take this into consideration when you create your budget. There are plenty of actions you can take to reduce your debt, such as using some of your margin to pay it off, paying off your high interest loans first, consolidating all of your loans into a single, low interest, monthly payment, cutting back to a single credit card and paying off the balance at the end of each month, and simply learning how to delay gratification so you don’t get into this mess again. Once again, a financial planner can help you work through these options.
It seems like incurring some debt is inevitable today, especially when it comes to purchasing costly items such as vehicles or a home. But it’s not always necessary, particularly for expendables, such as furniture, appliances, or electronic equipment. However, before you incur any debt of any size, spend time in prayer and evaluate the spiritual, economic, psychological and personal ramifications of that decision. If you stick to doing things on a cash-only basis, you may have to wait a little longer to purchase what you want, but it will definitely be worth it in the long run.
A final area of spending we should mention is taxes (cf. Luke 20:25; Romans 13:7). In this case, you need to strike a balance between your civic duty and paying more than you need to. Cheating on your tax return seems like a victimless crime, and it’s easy to let your ethics slide in this area. But honesty is crucial to everything you do—particularly in the little things. So be honest on your tax return, but don’t pay more than you have to. A good steward endeavors to reduce taxes as much as is legally possible. Studies have shown that a dollar in hand of an individual consumer is much more effective than it is in hands of government. So by reducing your taxes, you’re actually helping out the economy! Plus, you can use the money you receive from your tax return for other things, such as reducing your debt or adding to your giving or savings budgets.
Saving:
The extra money you have left over (or should have left over) at the end of each month after paying your living expenses, taxes, debts, and meeting your giving budget is called savings or margin. Your savings should always be planned and regular. Determine what percentage of your income you can save each month, and then divide that amount into short-term and long-term savings. Use the short-term savings for things like family vacations and acquiring smaller items, such as a stereo or new appliances. Long-term savings should be set aside for a new vehicle or other expendables that require a significant amount of funds. You should also set aside a contingency fund, usually 3-6 months of income, in the event that you temporarily lose your ability to earn income.
While saving money is prudent and wise, there is a fine line between saving and hoarding. A good way to tell the difference is to ask yourself whether you’re putting your trust in your savings or in God. As your savings account grows, make sure your faith in God’s provision grows along with it!
Investing:
Investing your money wisely is crucial to getting the most return on your time and effort. After all, you’ve worked hard for your money. Isn’t it time it did some work for you?
Investing is just like any other financial decision. First, you should pray and ask God how much he wants you to invest and where he wants you to put it. Any financial planner will tell you that your portfolio should contain a mix of low, medium, and high-risk investments. How much is allocated to each area depends on your risk tolerance and your financial goals. Areas to invest include government bonds, GICs, real estate, mutual funds, and individual stocks. We strongly urge you to consult with a financial planner prior to making any major decisions in this area. The last thing you want to do after earning your money is to watch it all drain away through a poor investment strategy.
Giving:
As with saving, your giving should always be planned and regular. Choose your charities wisely, and make sure they’re putting as much of your money as possible into their primary work rather than miring it all in overhead. It’s also okay to keep some money aside in a contingency fund for those “spur of the moment” donations. However, regular giving allows you to budget from month to month. It also enables you to take full advantage of the tax credits available, thus increasing your margin. You can use this extra money for additional giving, to defray living expenses or to reduce your debt.
Although tithing or giving one-tenth of your income is a good place to start, it is by no means mandatory - and you definitely don’t have to limit yourself to this amount! Ask God where he would like you to direct your giving, and revisit the amount you give each year. Remember: All money is God’s money; you are the stewards so don’t hold on to it too tightly when he is trying to teach you to live generously. As the Bible says, those who sow generously will also reap generously.
* earn it
* spend it
* save it
* invest it
* give it
That may sound simple. But when it comes to actually doing it, all sorts of questions arise, such as:
* “How much money do I need to earn?”
* “How much should I save?”
* “How much should I spend?”
* “Where should I invest it?”
* “How much should I give?”
The following Scriptures and advice will help you to begin thinking through these issues:
Earning:
Most people have to earn an income some way or another. Some people do this by working at a job, others own their own business, and still others earn their living through more unconventional means, such as investing in real estate or the stock market. Whichever way you earn your money, a key decision in this area is determining how much money you actually need to survive.
Many people fall into the trap of working more than they need to, simply because they can’t say no to the extra money. They put in overtime at work, thus depriving themselves, their family, their friends, their church, and their community of time they could spend investing in other types of capital, such as social and spiritual capital. Other people don’t work enough, thus depriving their family of the things they need and enjoy and causing others to have to pick up the slack. The key is to find the balance so you are able to earn a comfortable living without falling prey to the pitfalls of either extreme. Ask God to guide you in this area.
Spending:
The first rule of spending is to always spend less than you earn. The minute you start spending more than you’re taking in, you incur what is called negative margin or deficit. Deficit is different from a loan in that deficit adds continually to your debt and are unable to pay it back. As you keep overspending each month, your debt just keeps growing and growing. Before long, you and your entire family will become a slave to it (Proverbs 22:7; 23:4-5).
The way to avoid debt and live within your means is to create a monthly budget with different categories for things like shelter, food, clothing, transportation, and so on. A financial planner can help you develop a budget that’s right for you. But simply creating a budget won’t solve your financial problems. You have to stick to it. Be disciplined. When the money is gone from a certain category, that’s it until next month. Don’t borrow against your future, because the future is always uncertain.
If you’re already in debt, you’ll have to take this into consideration when you create your budget. There are plenty of actions you can take to reduce your debt, such as using some of your margin to pay it off, paying off your high interest loans first, consolidating all of your loans into a single, low interest, monthly payment, cutting back to a single credit card and paying off the balance at the end of each month, and simply learning how to delay gratification so you don’t get into this mess again. Once again, a financial planner can help you work through these options.
It seems like incurring some debt is inevitable today, especially when it comes to purchasing costly items such as vehicles or a home. But it’s not always necessary, particularly for expendables, such as furniture, appliances, or electronic equipment. However, before you incur any debt of any size, spend time in prayer and evaluate the spiritual, economic, psychological and personal ramifications of that decision. If you stick to doing things on a cash-only basis, you may have to wait a little longer to purchase what you want, but it will definitely be worth it in the long run.
A final area of spending we should mention is taxes (cf. Luke 20:25; Romans 13:7). In this case, you need to strike a balance between your civic duty and paying more than you need to. Cheating on your tax return seems like a victimless crime, and it’s easy to let your ethics slide in this area. But honesty is crucial to everything you do—particularly in the little things. So be honest on your tax return, but don’t pay more than you have to. A good steward endeavors to reduce taxes as much as is legally possible. Studies have shown that a dollar in hand of an individual consumer is much more effective than it is in hands of government. So by reducing your taxes, you’re actually helping out the economy! Plus, you can use the money you receive from your tax return for other things, such as reducing your debt or adding to your giving or savings budgets.
Saving:
The extra money you have left over (or should have left over) at the end of each month after paying your living expenses, taxes, debts, and meeting your giving budget is called savings or margin. Your savings should always be planned and regular. Determine what percentage of your income you can save each month, and then divide that amount into short-term and long-term savings. Use the short-term savings for things like family vacations and acquiring smaller items, such as a stereo or new appliances. Long-term savings should be set aside for a new vehicle or other expendables that require a significant amount of funds. You should also set aside a contingency fund, usually 3-6 months of income, in the event that you temporarily lose your ability to earn income.
While saving money is prudent and wise, there is a fine line between saving and hoarding. A good way to tell the difference is to ask yourself whether you’re putting your trust in your savings or in God. As your savings account grows, make sure your faith in God’s provision grows along with it!
Investing:
Investing your money wisely is crucial to getting the most return on your time and effort. After all, you’ve worked hard for your money. Isn’t it time it did some work for you?
Investing is just like any other financial decision. First, you should pray and ask God how much he wants you to invest and where he wants you to put it. Any financial planner will tell you that your portfolio should contain a mix of low, medium, and high-risk investments. How much is allocated to each area depends on your risk tolerance and your financial goals. Areas to invest include government bonds, GICs, real estate, mutual funds, and individual stocks. We strongly urge you to consult with a financial planner prior to making any major decisions in this area. The last thing you want to do after earning your money is to watch it all drain away through a poor investment strategy.
Giving:
As with saving, your giving should always be planned and regular. Choose your charities wisely, and make sure they’re putting as much of your money as possible into their primary work rather than miring it all in overhead. It’s also okay to keep some money aside in a contingency fund for those “spur of the moment” donations. However, regular giving allows you to budget from month to month. It also enables you to take full advantage of the tax credits available, thus increasing your margin. You can use this extra money for additional giving, to defray living expenses or to reduce your debt.
Although tithing or giving one-tenth of your income is a good place to start, it is by no means mandatory - and you definitely don’t have to limit yourself to this amount! Ask God where he would like you to direct your giving, and revisit the amount you give each year. Remember: All money is God’s money; you are the stewards so don’t hold on to it too tightly when he is trying to teach you to live generously. As the Bible says, those who sow generously will also reap generously.
How to build trust that lasts?
There is an old saying, "without trust, there is no love." Is this true?
Well, one thing is for sure: love with trust lasts a lot longer than love without it.
Are you struggling to find trust in your relationship? Losing trust for a partner is not uncommon. Events or personality differences treated the wrong way, will erode trust in our loved one.
Insults, put-downs, disrespect, affairs, flirting (with others), mismanagement of business or money, and numerous other things will all contribute to losing trust.
How do we build trust? How do we stop erosion and rebuild trust?
The answer is ACCEPTANCE.
It isn't as if certain behaviors are to be accepted, at all times, and just accepted. However, there is no basis for change or improvement without trust, and the only way to get someone to trust is to accept them for who they are.
There are many differences between people in relationships. I have noticed, in my own relationships, that often, one person is tight with money, the other has a hole in their pocket; one is a stickler for being on time, the other slack and often late; one keeps a tidy house and likes dishes done and the bed made, the other leaves their clothes on the floor; one is a morning person, the other a night owl; one is great at coming up with ideas, the other better at implementing them. These differences go beyond the "opposites attract" theory. Being different is vital to a successful relationship, as these differences help us make up for what we lack. With our partner's strengths, we are a stronger couple than we are individually.
However, when we put down our differences, and/or try to create a strength in our partner's area of lack, we convey disrespect -- because we are not accepting our partner for who they are.
If one partner wants to be on time and values schedules, is it disrespectful for the other partner to be slack, if this is how they operate? Probably not. If one person wants to relax, but their partner wants to hurry them up to be on time to that party they were going to, is the person pushing being disrespectful? Probably not. Both are right, in a sense, as there is no absolute "right way" of doing these things.
Imagine the likelihood to create change in a partner by using any of the following comments as a startup for conversation:
"You're selfish."
"You're disrespectful. Why can't you see that being on time matters to me?"
"Where did my clothes go? I left them out to wear that again! Did you take them?"
"How many times do I have to tell you or ask you..."
"Why are you just sitting there meditating? We have things to do today!"
"Can't you see that I like a neat bed?"
"What's more important, me or that football game on T.V.?"
"You're so negative! Why can't you be more positive?"
This type of communication is harsh and confrontational. The person making the request for change actually comes off equally or perhaps more selfish or even hypocritical, because they haven't conveyed any acceptance for the other person's personal way of doing things. The likelihood of successful resolution (without fight or argument) with these comments is practically nil.
However, imagine the possibility to create change in these exact same instances, with a different communication approach:
"Honey, I realize you have some needs here, such as having me talk with you a certain way, I am a little stressed when you bring up this issue at this particular time, though..."
"Sweetheart, I can see that you have some things you want to do, and they are important to you. We did want to be at dinner by 7:30pm, though, didn't we? Would it be okay to do that later so we can keep our schedule? I'd appreciate it."
"Baby, did you clean my clothes for me? Thank you! I really appreciate all you do, and the hard work you did today. Can you tell me where they might be, or do you think I just misplaced them? How can I make this easier for you in the future?"
"Love, I know we've discussed this item before. This is important to me. If in the future you could just consider my own needs I will be happy to help you with this issue."
"I can see that you are meditating/relaxing. I know we said we have much to do today, but would you like some space for a little bit?"
"Honey, I love sleeping with you. I also like coming home to a nicely made bed. I'm in a hurry today, can you help me out by making the bed?"
"Hi baby, I see you're really into this game. Want me to watch it with you or can you come join me in the bedroom when it is over?"
"You know, sweetheart, you have a really unique perspective on this situation. There is another perspective that I noticed, would you like for me to share it with you?"
These statements are far more loving, express appreciation, respect, and terms of endearment, and show an active part in the problem. After all, we are in relationships to relate, right? The difference is that it takes a little more time to be accepting, and show some terms of endearment, and this is not easy when it is an item that is our own personal pet peeve. But our pet peeves are frequently not our partner's pet peeves. They will not hear us and will actually feel invalidated if we try to push our pet peeves onto them with harsh communication! Instead, using the path love, acceptance, and care builds the trust and relationship we seek. Also, by not making accusations (I statements instead of you questions or statements) we build considerably more trust.
In reading these, which did you feel more comfortable hearing? Were there any issues you felt particular relative to your own relationship? If so, try approaching with appreciation, acknowledgement, respect, and caring communications to show how much you accept your partner, prior to suggesting change, and see how much your trust in each other grows.
Well, one thing is for sure: love with trust lasts a lot longer than love without it.
Are you struggling to find trust in your relationship? Losing trust for a partner is not uncommon. Events or personality differences treated the wrong way, will erode trust in our loved one.
Insults, put-downs, disrespect, affairs, flirting (with others), mismanagement of business or money, and numerous other things will all contribute to losing trust.
How do we build trust? How do we stop erosion and rebuild trust?
The answer is ACCEPTANCE.
It isn't as if certain behaviors are to be accepted, at all times, and just accepted. However, there is no basis for change or improvement without trust, and the only way to get someone to trust is to accept them for who they are.
There are many differences between people in relationships. I have noticed, in my own relationships, that often, one person is tight with money, the other has a hole in their pocket; one is a stickler for being on time, the other slack and often late; one keeps a tidy house and likes dishes done and the bed made, the other leaves their clothes on the floor; one is a morning person, the other a night owl; one is great at coming up with ideas, the other better at implementing them. These differences go beyond the "opposites attract" theory. Being different is vital to a successful relationship, as these differences help us make up for what we lack. With our partner's strengths, we are a stronger couple than we are individually.
However, when we put down our differences, and/or try to create a strength in our partner's area of lack, we convey disrespect -- because we are not accepting our partner for who they are.
If one partner wants to be on time and values schedules, is it disrespectful for the other partner to be slack, if this is how they operate? Probably not. If one person wants to relax, but their partner wants to hurry them up to be on time to that party they were going to, is the person pushing being disrespectful? Probably not. Both are right, in a sense, as there is no absolute "right way" of doing these things.
Imagine the likelihood to create change in a partner by using any of the following comments as a startup for conversation:
"You're selfish."
"You're disrespectful. Why can't you see that being on time matters to me?"
"Where did my clothes go? I left them out to wear that again! Did you take them?"
"How many times do I have to tell you or ask you..."
"Why are you just sitting there meditating? We have things to do today!"
"Can't you see that I like a neat bed?"
"What's more important, me or that football game on T.V.?"
"You're so negative! Why can't you be more positive?"
This type of communication is harsh and confrontational. The person making the request for change actually comes off equally or perhaps more selfish or even hypocritical, because they haven't conveyed any acceptance for the other person's personal way of doing things. The likelihood of successful resolution (without fight or argument) with these comments is practically nil.
However, imagine the possibility to create change in these exact same instances, with a different communication approach:
"Honey, I realize you have some needs here, such as having me talk with you a certain way, I am a little stressed when you bring up this issue at this particular time, though..."
"Sweetheart, I can see that you have some things you want to do, and they are important to you. We did want to be at dinner by 7:30pm, though, didn't we? Would it be okay to do that later so we can keep our schedule? I'd appreciate it."
"Baby, did you clean my clothes for me? Thank you! I really appreciate all you do, and the hard work you did today. Can you tell me where they might be, or do you think I just misplaced them? How can I make this easier for you in the future?"
"Love, I know we've discussed this item before. This is important to me. If in the future you could just consider my own needs I will be happy to help you with this issue."
"I can see that you are meditating/relaxing. I know we said we have much to do today, but would you like some space for a little bit?"
"Honey, I love sleeping with you. I also like coming home to a nicely made bed. I'm in a hurry today, can you help me out by making the bed?"
"Hi baby, I see you're really into this game. Want me to watch it with you or can you come join me in the bedroom when it is over?"
"You know, sweetheart, you have a really unique perspective on this situation. There is another perspective that I noticed, would you like for me to share it with you?"
These statements are far more loving, express appreciation, respect, and terms of endearment, and show an active part in the problem. After all, we are in relationships to relate, right? The difference is that it takes a little more time to be accepting, and show some terms of endearment, and this is not easy when it is an item that is our own personal pet peeve. But our pet peeves are frequently not our partner's pet peeves. They will not hear us and will actually feel invalidated if we try to push our pet peeves onto them with harsh communication! Instead, using the path love, acceptance, and care builds the trust and relationship we seek. Also, by not making accusations (I statements instead of you questions or statements) we build considerably more trust.
In reading these, which did you feel more comfortable hearing? Were there any issues you felt particular relative to your own relationship? If so, try approaching with appreciation, acknowledgement, respect, and caring communications to show how much you accept your partner, prior to suggesting change, and see how much your trust in each other grows.
Thursday, October 16, 2008
Tracking the growth of India’s middle class
Over the next two decades, the country’s middle class will grow from about 5 percent of the population to more than 40 percent and create the world’s fifth-largest consumer market.
India’s rapid economic growth has set the stage for fundamental change among the country’s consumers. The same energy that has lifted hundreds of millions of Indians out of desperate poverty is creating a massive middle class centered in the cities. A new study by the McKinsey Global Institute (MGI) suggests that if India continues its recent growth, average household incomes will triple over the next two decades and it will become the world’s 5th-largest consumer economy by 2025, up from 12th now. Along the way, spending patterns will shift significantly as discretionary purchases capture a majority of consumer spending. India’s potential should make it a high priority for most consumer goods businesses, but to succeed in this complex market they must overcome major challenges.
Private consumption has already played a much larger role in India’s growth than it has in that of other developing countries. In 2005 private spending reached about 17 trillion Indian rupees1 ($372 billion), accounting for more than 60 percent of India’s GDP, so in this respect the country is closer to developed economies such as Japan and the United States than are China and other fast-growing emerging markets in Asia. Our study shows that aggregate consumer spending could more than quadruple in coming years, reaching 70 trillion rupees by 2025. Higher private incomes and, to a lesser extent, population growth will encourage this rise in consumption. Changes in savings behavior will play only a minor role.
With such growth on the horizon, it is unclear which companies will win in most product categories. Opportunities will blossom as millions of first-time buyers step up to cash registers and as the bulk of consumer spending moves from scattered, hard-to-reach rural areas to more concentrated, accessible urban markets. Indian consumer spending will shift substantially from the informal economy, with its individual traders, to the more efficient formal economy of organized businesses. That transition will lower prices and further boost demand.
But neither incumbents nor attackers will have an easy time. Bureaucratic hurdles and well-recognized infrastructure shortcomings will frustrate many strategies. In addition, while aggregate spending will rise tremendously, it will be spread across hundreds of millions of households, many with very modest incomes (by the standards of developed countries) and high sensitivity to price and value. Finally, in many consumer markets both Indian and multinational companies already compete intensely for customers. While the opportunities will be enormous, the challenges will force companies to be more dynamic by adapting their products, services, and business models to the rapidly changing needs and incomes of Indian consumers.
We examined the way India’s consumer market will likely develop under a set of reasonable economic assumptions . In particular, our model assumes that real compound annual growth will be 7.3 percent over the next two decades and that economic-reform efforts will continue. If these conditions are met, the life of the average Indian will change vastly by 2025.
A market rising from poverty
India’s economic reforms, begun in 1991, have substantially improved the country’s well-being, and our analysis shows that further improvements are to come. In 1985 93 percent of the population lived on a household income of less than 90,000 rupees a year, or about a dollar per person per day; by 2005 that proportion had been cut nearly in half, to 54 percent. By our estimate, 431 million fewer Indians live in extreme poverty today than would have if poverty had remained stuck at the 1985 level. We project that if India can achieve 7.3 percent annual growth over the next 20 years, 465 million more people will be spared a life of extreme deprivation.
Contrary to popular perceptions, rural India has benefited from this growth: extreme rural poverty has declined from 94 percent in 1985 to 61 percent in 2005, and we project that it will drop to 26 percent by 2025. While the progress has been substantial—even historic—significant challenges remain. First, there are large regional disparities in growth and in the reduction of poverty: India’s southern and western states prosper, while the northern and eastern states (with the exceptions of the capital region, Haryana, Himachal Pradesh, and Punjab) lag behind. Second, while India has been slowly urbanizing over the past two decades, it remains the least urbanized of the emerging Asian economies. Today only 29 percent of Indians live in cities, compared with 40 percent of the Chinese and 48 percent of Indonesians, and we project that the level of urbanization will increase to only 37 percent by 2025.2 Finally, while more Indians are completing secondary and higher education, the educational system remains severely strained and the quality of and opportunities for schooling vary widely.
In rural areas life may become less desperate thanks to continued growth and to government investment in infrastructure and development. But it will likely remain a struggle, particularly for subsistence farmers in the north and east and for others with little education. For India’s urbanites, especially educated ones, the future looks promising. Many of these households will make the jump not only out of poverty but also into the new and aspiring middle class.
The birth of a new middle class
The growth that has pulled millions of people out of poverty is also building a huge middle class that will be concentrated in India’s urban areas. While urbanization isn’t proceeding as quickly as it is in other Asian economies, rapid population growth means that in absolute terms the country’s urban population will expand significantly, from 318 million today to 523 million in 2025.
Urban growth will bring several important consequences. First, it will put tremendous pressure on the urban infrastructure, which is already heavily overburdened. (Our projections assume that infrastructure investments will at least keep pace with urban growth and that problems with transportation and utilities won’t worsen to the point of hampering growth.) Also, in India—unlike China, where urban growth is spread across a large number of cities—the economy will continue to be dominated by the megacities (Delhi and Mumbai) plus the six next-largest urban agglomerations.3 Nevertheless, a handful of smaller places, such as Chandigarh and Ludhiana, will have per capita incomes rivaling those of the major cities and emerge as attractive markets. The shift in spending power from the countryside to the cities will place the bulk of India’s private consumption within easier reach of major companies. Today 57 percent of private spending is spread across rural areas, but by 2025 cities will command 62 percent of the country’s spending power.
Along with the shift from rural to urban consumption, India will witness the rapid growth of its middle class—households with disposable incomes from 200,000 to 1,000,000 rupees a year.4 That class now comprises about 50 million people, roughly 5 percent of the population. By 2025 a continuing rise in personal incomes will spur a tenfold increase, enlarging the middle class to about 583 million people, or 41 percent of the population. In 20 years the shape of the income pyramid will have become almost unrecognizable.
The Indian middle class has already begun to evolve, and by 2025 it will dominate the cities. By then about three-quarters of India’s urbanites will be part of the middle class, compared with just more than one-tenth today. The expansion will come in two phases, with the lower middle class peaking around 2020, just as the growth of the upper middle class accelerates . About 400 million Indian city dwellers—a group nearly 100 million people larger than the current population of the United States—will belong to households with a comfortable standard of living. For many companies, the sheer scale of this new urban middle class will ensure that it receives significant attention.
What’s more, companies shouldn’t underestimate the market presented by the country’s most affluent consumers: those earning more than 1,000,000 rupees a year—$21,890 in real 2000 dollar terms, or $117,650 in terms of purchasing power parity (PPP). They will remain a small portion of society: about 2 percent of the population in 2025, up from 0.2 percent today. But in absolute numbers, by 2025 India’s wealthiest citizens will total 24 million, more than the current population of Australia. By that year too, India’s affluent class will be larger than China’s comparable segment, projected at about 19 million people.5 Affluent India’s share of national private consumption will increase from 7 percent today to 20 percent in 2025, which helps to explain the recent rush into the Indian market of luxury goods such as Louis Vuitton bags and Jimmy Choo shoes.
These “global” Indians live mostly in the eight largest cities, so they are very accessible to large domestic and multinational companies. Further, they have tastes similar to those of their counterparts in developed countries: brand name goods, vacations abroad, the latest consumer electronics, and high-end cars.
Changes in consumption
As Indians continue to climb the economic ladder, the composition of their spending will change considerably. In a pattern witnessed in many other developing countries, discretionary expenditures, such as mobile phones and personal-care products, will take up more room in the nation’s shopping basket.
This shift from necessities, defined in our analysis as food and clothing,6 is already under way—and taking place at lower income levels than we have seen in other countries. We expect that discretionary spending in India will rise from 52 percent of total private spending today to 70 percent in 2025. South Korea went through a similar transformation in the 1980s, when its per capita income levels were about twice those of India now.
Food (including beverages and tobacco) will post the sharpest decline in relative consumption, even as overall spending in the category rises. The fall in the share of food expenditures during our forecast period—to 25 percent, from 42 percent—is linked closely to the growth of the middle class. Despite this relative decline, food will remain the single largest category of expenditure, and we expect that growth in consumption will accelerate to 4.5 percent annually, from 3 percent over the past 20 years.
That growth, however, will appear tepid compared with the rise of other categories. In particular, spending on purchases that improve the economic prospects and quality of life of a person or family—health, education, transport, and communications—will soar and eventually command a greater share of consumption than they do elsewhere. The inadequacy of India’s public-health system, for example, means that private health care is a high priority for many Indian families when their incomes grow. This imperative will drive growth in private health care spending by almost 11 percent a year, so that it will account for 13 percent of the purchases of Indian households by 2025, a larger share than current levels in all of the countries we examined7 except the United States.
In another remarkable shift, spending on education will grow by 11 percent over the next 20 years, to 9 percent of household consumption, higher than today’s levels in any of our benchmark countries. In rural areas, households emerging from poverty will make educating their children a priority, while higher-income urbanites will be spending more on better-quality education, university degrees, and study-abroad programs. Meanwhile, despite India’s fondness for cricket and “Bollywood” movies, recreational products and services will take a smaller slice of household spending there than in other countries.
Transportation, already the largest category of expense after food, will take a bigger portion of household budgets in coming years, exceeding its share in all of our benchmark countries. The highest growth will come from car purchases. Categories such as clothing and household goods are expected to post slower annual growth relative to overall consumption—6.4 percent and 6.9 percent, respectively—and thus to lose share of wallet. Yet even in these categories, growth rates will remain highly attractive as compared with those in other markets around the world.
What it means for businesses
Three-quarters of India’s consumer market in 2025 doesn’t exist today—about 52.6 trillion rupees a year in future purchases will be up for grabs. Also, India’s rapid upward mobility means that many of India’s households will be new consumers, enjoying significant discretionary consumption in the organized economy for the first time in their lives. Incumbents and challengers alike face a sea change. India’s incumbents, mostly domestic companies, will start with many advantages: existing relationships with customers, an understanding of their needs, and recognized brands.
The incumbents also have established distribution channels—very important in a country of vast geography and limited infrastructure.
But growing incomes and consumption will pressure incumbents from two directions. First, such companies must adjust to the pace and magnitude of change, for as consumers rise through the income brackets, their needs, tastes, aspirations, and brand loyalties will evolve along with their lifestyles. Second, India’s growing consumption will attract a raft of challengers, and ongoing economic reform will significantly intensify competition in many markets. New competition will come from multinationals entering the Indian market, from established Indian companies looking for expansion opportunities, and from entrepreneurs. Indeed, if the country’s policy makers create the conditions for India’s entrepreneurs to succeed, major new companies could be built on the back of consumer growth.
Many incumbents haven’t prepared enough for this discontinuity. They will have to develop a deep understanding of how the consumer’s needs and aspirations will change as incomes grow and find ways of creating innovative products that meet those changing needs. In addition, they must think about how they should introduce new consumers to their products, whether their brands are appropriate for those consumers, and what prices and cost positions will help them compete most effectively for a share of this new middle-class market. Nor is that all: incumbents will have to keep a wary eye on the actions of their current competitors and on new market entrants. That’s a full agenda, and companies that begin preparing today will be in the best position to benefit from the changes.
For attackers, the challenge will be to spot the gaps and opportunities that arise as India’s income and class structure change; they might, for example, ask themselves where small markets or limited competition, or both, have served middle-class consumers poorly. Attackers could also turn to other emerging economies to seek lessons on how tastes and needs will likely evolve in India, perhaps looking in particular for categories in which spending shifted from local products and brands to international ones as aspirations rose. Attackers seeking to exploit these changes should consider what new needs will be unique to Indian tastes and the market as the middle class grows.
In India, as in many emerging markets, multinational companies will find themselves squeezed between the desire of the country’s consumers for a modern middle-class lifestyle and the realities of their limited budgets. In 2005 the average middle-class family spent just over 300,000 rupees annually—roughly $6,600—a very modest sum in real terms, but in PPP terms equal to around $35,000. As one multinational executive noted, however, “You can’t put PPP dollars in the bank, only real dollars.” Multinationals must innovate to deliver an aspirational middle-class lifestyle to families on an Indian budget. Companies that can develop new business models, design products with carefully targeted features, and create brands that appeal to India’s upwardly mobile people will attract huge numbers of eager consumers.
The future we have described assumes that India will continue on its recent path of strong growth. There are many reasons to believe that this assumption is realistic, most notably the scope for improved productivity in the economy. But India’s outlook depends strongly on continued long-term economic reforms that are needed to address serious deficiencies in the country’s infrastructure, modernize the financial system, and promote investment in human capital through better education and health care.
India’s emergence as the world’s fifth-largest consumer economy will bring significant benefits to the country and the world. Growth will pull hundreds of millions of people out of poverty and into the world’s middle class. With rising incomes, Indians will have the opportunity to realize comforts and pleasures enjoyed by middle-class families around the world. In addition, rising domestic consumption will create further economic growth and employment as companies work to meet the new consumer demand. For the world’s businesses, India represents one of the largest consumer market opportunities of the next two decades. During the first millennium, merchants referred to India’s glittering and dynamic market as the “bird of gold.” That bird is preparing to take flight again.
Adopted from: McKinsey Quarterly, Tracking the growth of India’s middle class, Eric D. Beinhocker, Diana Farrell, and Adil S. Zainulbhai
India’s rapid economic growth has set the stage for fundamental change among the country’s consumers. The same energy that has lifted hundreds of millions of Indians out of desperate poverty is creating a massive middle class centered in the cities. A new study by the McKinsey Global Institute (MGI) suggests that if India continues its recent growth, average household incomes will triple over the next two decades and it will become the world’s 5th-largest consumer economy by 2025, up from 12th now. Along the way, spending patterns will shift significantly as discretionary purchases capture a majority of consumer spending. India’s potential should make it a high priority for most consumer goods businesses, but to succeed in this complex market they must overcome major challenges.
Private consumption has already played a much larger role in India’s growth than it has in that of other developing countries. In 2005 private spending reached about 17 trillion Indian rupees1 ($372 billion), accounting for more than 60 percent of India’s GDP, so in this respect the country is closer to developed economies such as Japan and the United States than are China and other fast-growing emerging markets in Asia. Our study shows that aggregate consumer spending could more than quadruple in coming years, reaching 70 trillion rupees by 2025. Higher private incomes and, to a lesser extent, population growth will encourage this rise in consumption. Changes in savings behavior will play only a minor role.
With such growth on the horizon, it is unclear which companies will win in most product categories. Opportunities will blossom as millions of first-time buyers step up to cash registers and as the bulk of consumer spending moves from scattered, hard-to-reach rural areas to more concentrated, accessible urban markets. Indian consumer spending will shift substantially from the informal economy, with its individual traders, to the more efficient formal economy of organized businesses. That transition will lower prices and further boost demand.
But neither incumbents nor attackers will have an easy time. Bureaucratic hurdles and well-recognized infrastructure shortcomings will frustrate many strategies. In addition, while aggregate spending will rise tremendously, it will be spread across hundreds of millions of households, many with very modest incomes (by the standards of developed countries) and high sensitivity to price and value. Finally, in many consumer markets both Indian and multinational companies already compete intensely for customers. While the opportunities will be enormous, the challenges will force companies to be more dynamic by adapting their products, services, and business models to the rapidly changing needs and incomes of Indian consumers.
We examined the way India’s consumer market will likely develop under a set of reasonable economic assumptions . In particular, our model assumes that real compound annual growth will be 7.3 percent over the next two decades and that economic-reform efforts will continue. If these conditions are met, the life of the average Indian will change vastly by 2025.
A market rising from poverty
India’s economic reforms, begun in 1991, have substantially improved the country’s well-being, and our analysis shows that further improvements are to come. In 1985 93 percent of the population lived on a household income of less than 90,000 rupees a year, or about a dollar per person per day; by 2005 that proportion had been cut nearly in half, to 54 percent. By our estimate, 431 million fewer Indians live in extreme poverty today than would have if poverty had remained stuck at the 1985 level. We project that if India can achieve 7.3 percent annual growth over the next 20 years, 465 million more people will be spared a life of extreme deprivation.
Contrary to popular perceptions, rural India has benefited from this growth: extreme rural poverty has declined from 94 percent in 1985 to 61 percent in 2005, and we project that it will drop to 26 percent by 2025. While the progress has been substantial—even historic—significant challenges remain. First, there are large regional disparities in growth and in the reduction of poverty: India’s southern and western states prosper, while the northern and eastern states (with the exceptions of the capital region, Haryana, Himachal Pradesh, and Punjab) lag behind. Second, while India has been slowly urbanizing over the past two decades, it remains the least urbanized of the emerging Asian economies. Today only 29 percent of Indians live in cities, compared with 40 percent of the Chinese and 48 percent of Indonesians, and we project that the level of urbanization will increase to only 37 percent by 2025.2 Finally, while more Indians are completing secondary and higher education, the educational system remains severely strained and the quality of and opportunities for schooling vary widely.
In rural areas life may become less desperate thanks to continued growth and to government investment in infrastructure and development. But it will likely remain a struggle, particularly for subsistence farmers in the north and east and for others with little education. For India’s urbanites, especially educated ones, the future looks promising. Many of these households will make the jump not only out of poverty but also into the new and aspiring middle class.
The birth of a new middle class
The growth that has pulled millions of people out of poverty is also building a huge middle class that will be concentrated in India’s urban areas. While urbanization isn’t proceeding as quickly as it is in other Asian economies, rapid population growth means that in absolute terms the country’s urban population will expand significantly, from 318 million today to 523 million in 2025.
Urban growth will bring several important consequences. First, it will put tremendous pressure on the urban infrastructure, which is already heavily overburdened. (Our projections assume that infrastructure investments will at least keep pace with urban growth and that problems with transportation and utilities won’t worsen to the point of hampering growth.) Also, in India—unlike China, where urban growth is spread across a large number of cities—the economy will continue to be dominated by the megacities (Delhi and Mumbai) plus the six next-largest urban agglomerations.3 Nevertheless, a handful of smaller places, such as Chandigarh and Ludhiana, will have per capita incomes rivaling those of the major cities and emerge as attractive markets. The shift in spending power from the countryside to the cities will place the bulk of India’s private consumption within easier reach of major companies. Today 57 percent of private spending is spread across rural areas, but by 2025 cities will command 62 percent of the country’s spending power.
Along with the shift from rural to urban consumption, India will witness the rapid growth of its middle class—households with disposable incomes from 200,000 to 1,000,000 rupees a year.4 That class now comprises about 50 million people, roughly 5 percent of the population. By 2025 a continuing rise in personal incomes will spur a tenfold increase, enlarging the middle class to about 583 million people, or 41 percent of the population. In 20 years the shape of the income pyramid will have become almost unrecognizable.
The Indian middle class has already begun to evolve, and by 2025 it will dominate the cities. By then about three-quarters of India’s urbanites will be part of the middle class, compared with just more than one-tenth today. The expansion will come in two phases, with the lower middle class peaking around 2020, just as the growth of the upper middle class accelerates . About 400 million Indian city dwellers—a group nearly 100 million people larger than the current population of the United States—will belong to households with a comfortable standard of living. For many companies, the sheer scale of this new urban middle class will ensure that it receives significant attention.
What’s more, companies shouldn’t underestimate the market presented by the country’s most affluent consumers: those earning more than 1,000,000 rupees a year—$21,890 in real 2000 dollar terms, or $117,650 in terms of purchasing power parity (PPP). They will remain a small portion of society: about 2 percent of the population in 2025, up from 0.2 percent today. But in absolute numbers, by 2025 India’s wealthiest citizens will total 24 million, more than the current population of Australia. By that year too, India’s affluent class will be larger than China’s comparable segment, projected at about 19 million people.5 Affluent India’s share of national private consumption will increase from 7 percent today to 20 percent in 2025, which helps to explain the recent rush into the Indian market of luxury goods such as Louis Vuitton bags and Jimmy Choo shoes.
These “global” Indians live mostly in the eight largest cities, so they are very accessible to large domestic and multinational companies. Further, they have tastes similar to those of their counterparts in developed countries: brand name goods, vacations abroad, the latest consumer electronics, and high-end cars.
Changes in consumption
As Indians continue to climb the economic ladder, the composition of their spending will change considerably. In a pattern witnessed in many other developing countries, discretionary expenditures, such as mobile phones and personal-care products, will take up more room in the nation’s shopping basket.
This shift from necessities, defined in our analysis as food and clothing,6 is already under way—and taking place at lower income levels than we have seen in other countries. We expect that discretionary spending in India will rise from 52 percent of total private spending today to 70 percent in 2025. South Korea went through a similar transformation in the 1980s, when its per capita income levels were about twice those of India now.
Food (including beverages and tobacco) will post the sharpest decline in relative consumption, even as overall spending in the category rises. The fall in the share of food expenditures during our forecast period—to 25 percent, from 42 percent—is linked closely to the growth of the middle class. Despite this relative decline, food will remain the single largest category of expenditure, and we expect that growth in consumption will accelerate to 4.5 percent annually, from 3 percent over the past 20 years.
That growth, however, will appear tepid compared with the rise of other categories. In particular, spending on purchases that improve the economic prospects and quality of life of a person or family—health, education, transport, and communications—will soar and eventually command a greater share of consumption than they do elsewhere. The inadequacy of India’s public-health system, for example, means that private health care is a high priority for many Indian families when their incomes grow. This imperative will drive growth in private health care spending by almost 11 percent a year, so that it will account for 13 percent of the purchases of Indian households by 2025, a larger share than current levels in all of the countries we examined7 except the United States.
In another remarkable shift, spending on education will grow by 11 percent over the next 20 years, to 9 percent of household consumption, higher than today’s levels in any of our benchmark countries. In rural areas, households emerging from poverty will make educating their children a priority, while higher-income urbanites will be spending more on better-quality education, university degrees, and study-abroad programs. Meanwhile, despite India’s fondness for cricket and “Bollywood” movies, recreational products and services will take a smaller slice of household spending there than in other countries.
Transportation, already the largest category of expense after food, will take a bigger portion of household budgets in coming years, exceeding its share in all of our benchmark countries. The highest growth will come from car purchases. Categories such as clothing and household goods are expected to post slower annual growth relative to overall consumption—6.4 percent and 6.9 percent, respectively—and thus to lose share of wallet. Yet even in these categories, growth rates will remain highly attractive as compared with those in other markets around the world.
What it means for businesses
Three-quarters of India’s consumer market in 2025 doesn’t exist today—about 52.6 trillion rupees a year in future purchases will be up for grabs. Also, India’s rapid upward mobility means that many of India’s households will be new consumers, enjoying significant discretionary consumption in the organized economy for the first time in their lives. Incumbents and challengers alike face a sea change. India’s incumbents, mostly domestic companies, will start with many advantages: existing relationships with customers, an understanding of their needs, and recognized brands.
The incumbents also have established distribution channels—very important in a country of vast geography and limited infrastructure.
But growing incomes and consumption will pressure incumbents from two directions. First, such companies must adjust to the pace and magnitude of change, for as consumers rise through the income brackets, their needs, tastes, aspirations, and brand loyalties will evolve along with their lifestyles. Second, India’s growing consumption will attract a raft of challengers, and ongoing economic reform will significantly intensify competition in many markets. New competition will come from multinationals entering the Indian market, from established Indian companies looking for expansion opportunities, and from entrepreneurs. Indeed, if the country’s policy makers create the conditions for India’s entrepreneurs to succeed, major new companies could be built on the back of consumer growth.
Many incumbents haven’t prepared enough for this discontinuity. They will have to develop a deep understanding of how the consumer’s needs and aspirations will change as incomes grow and find ways of creating innovative products that meet those changing needs. In addition, they must think about how they should introduce new consumers to their products, whether their brands are appropriate for those consumers, and what prices and cost positions will help them compete most effectively for a share of this new middle-class market. Nor is that all: incumbents will have to keep a wary eye on the actions of their current competitors and on new market entrants. That’s a full agenda, and companies that begin preparing today will be in the best position to benefit from the changes.
For attackers, the challenge will be to spot the gaps and opportunities that arise as India’s income and class structure change; they might, for example, ask themselves where small markets or limited competition, or both, have served middle-class consumers poorly. Attackers could also turn to other emerging economies to seek lessons on how tastes and needs will likely evolve in India, perhaps looking in particular for categories in which spending shifted from local products and brands to international ones as aspirations rose. Attackers seeking to exploit these changes should consider what new needs will be unique to Indian tastes and the market as the middle class grows.
In India, as in many emerging markets, multinational companies will find themselves squeezed between the desire of the country’s consumers for a modern middle-class lifestyle and the realities of their limited budgets. In 2005 the average middle-class family spent just over 300,000 rupees annually—roughly $6,600—a very modest sum in real terms, but in PPP terms equal to around $35,000. As one multinational executive noted, however, “You can’t put PPP dollars in the bank, only real dollars.” Multinationals must innovate to deliver an aspirational middle-class lifestyle to families on an Indian budget. Companies that can develop new business models, design products with carefully targeted features, and create brands that appeal to India’s upwardly mobile people will attract huge numbers of eager consumers.
The future we have described assumes that India will continue on its recent path of strong growth. There are many reasons to believe that this assumption is realistic, most notably the scope for improved productivity in the economy. But India’s outlook depends strongly on continued long-term economic reforms that are needed to address serious deficiencies in the country’s infrastructure, modernize the financial system, and promote investment in human capital through better education and health care.
India’s emergence as the world’s fifth-largest consumer economy will bring significant benefits to the country and the world. Growth will pull hundreds of millions of people out of poverty and into the world’s middle class. With rising incomes, Indians will have the opportunity to realize comforts and pleasures enjoyed by middle-class families around the world. In addition, rising domestic consumption will create further economic growth and employment as companies work to meet the new consumer demand. For the world’s businesses, India represents one of the largest consumer market opportunities of the next two decades. During the first millennium, merchants referred to India’s glittering and dynamic market as the “bird of gold.” That bird is preparing to take flight again.
Adopted from: McKinsey Quarterly, Tracking the growth of India’s middle class, Eric D. Beinhocker, Diana Farrell, and Adil S. Zainulbhai
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