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Streamline Training & Documentation
Streamline Training & Documentation
Wednesday, February 03, 2010
Impact of Quality of Management Practices on Firm Performance
As a follow-on to my last twoposts, I want to call attention to a piece of experimental research (pdf) conducted by Nicholas Bloom and several colleagues that provides evidence in support of the hypothesis that the quality of management practices significantly influences firm performance.
Bloom et al. summarize their work (which is due to continue through April) as follows:
We run a field experiment on large Indian textile firms to evaluate the causal impact of management on performance. To generate changes in management we provide management consulting to a set of randomly chosen treatment plants, and compare their performance to a set of control plants. We find that improved management practices led to significantly higher efficiency and quality, and lower inventory levels, substantially increasing plants’ productivity and profitability. Firms also transferred these improved management practices from their treated plants to other plants within their group. Since firms adopted and replicated these apparently profitable management practices this raises the question of why these were not adopted previously? Our results suggest that informational barriers are important in explaining this lack of adoption, with modern management practices a type of technology that diffuses slowly between firms. These Indian firms were either unaware of many modern management practices, or did not have the know how to implement them.
The photo below, one of several included in the preliminary draft (pdf) of the authors' paper currently available on the internet, illustrates quite concretely the degree of operational slack crying out for systematic management attention.
Takeaway: This research supports the proposition that it is effective to teach managers specific lean manufacturing practices that help optimize factory operations, inventory control, quality control, human resources, planning, and sales and order management.
About a year ago, I wrote a brief post about the Ethiopia Commodity Exchange (ECX), launched in April 2008 as a mechanism for helping farmers gauge their crop sales in light of up-to-date information about world commodity prices.1
A similar effort to promote market efficiency is the subject of a study by Aparajita Goyal (pdf), an economist at the World Bank.2 Goyal studied data relating to soybean sales in the Indian state of Madhya Pradesh before and after introduction of internet kiosks and warehouses that provided "wholesale price information and an alternative marketing channel to soy farmers in the state."
The aim of setting up the kiosks and warehouses was to mitigate exploitation of farmers by middlemen. Due to poor rural transport and storage infrastructure, lack of reliable price information, and an inability on the part of purchasers — processing companies and exporters — to verify produce quality, middlemen were able to get away with paying lowball prices to farmers while often overcharging purchasers.
Goyal found that the availability of the kiosks,3 which began being installed in Madhya Pradesh villages in October 2000, produced a significant increase in prices received by farmers and in the amount of land farmers allocated to soy production. The rise in prices — driven by increased competition among buyers — resulted in a 33% increase in profit for farmers. Land cultivated in soybeans went up 19%.
ITC Ltd., the large Indian conglomerate that deployed the kiosks and built the warehouses — at which farmers could sell directly to ITC — benefited from the improvement in quality of soybeans procured (ITC tested beans for oil and protein content before purchasing them), from the creation of a direct marketing channel, and from a reduction in its transaction costs (principally, costs of storage, weighing, loading, and bagging). The value of these benefits fully offset the cost of the kiosks.
__________ 1 ECX trades five commodities: maize, wheat, beans, sesame and coffee. You can read remarks by Eleni Gabre-Madhin, ECX's CEO, concerning the first eighteen months of ECX's operation here.
2 Members of the American Economic Association can access Goyal's paper, "Information, Direct Access to Farmers, and Rural Market Performance in Central India" (forthcoming in American Economic Journal: Applied Economics), here.
3 The kiosks are called "e-Choupals." "Choupal" is a Hindi word meaning "village gathering place." In addition to price information, the kiosks provide agricultural information and weather forecasts.
21st Century Journalism XXXVIII: Training Rural Journalists in India
On January 14, India Knowledge@Wharton published an article reporting on what newspaper publishers in India are doing to attract rural readers. Despite a rural literacy rate of only 50% and road conditions that make delivery arduous, Indian newspapers are succeeding in maintaining circulation in rural areas by covering topics of local interest, marketing vigorously, and employing resourceful delivery people.
Rajasthan Patrika, a Hindi-language newspaper that has made a point of building rural readership (Dan Reynolds)
The article opens with an account of rural distribution of a city paper, Rajasthan Patrika, and then goes on to describe a paper that is more strictly local:
Khabar Lahariya, or News Waves, [is] a weekly newspaper based in Chitrakoot, one of the poorest districts in central India. Written in Bundeli, the local language, the paper's all-female staff has forged a reputation for investigative journalism and support of grassroots causes since the paper was founded in 2002 by Nirantar, a New Delhi-based literacy education non-profit.
With a readership of 35,000 in 400 villages and costing 4 U.S. cents, the paper has no glitzy promotion strategy like its urban counterparts. Khabar Lahariya's marketing strength is instead its bold reporting on issues concerning lower-caste communities, for which it won the 2009 King Sejong Literacy Prize from UNESCO, among other recent accolades. However, the main reason why Khabar Lahariya receives such kudos is that it is run by trained women from marginalized communities and it conducts (in conjunction with Nirantar) journalist training and writing programs for locals — a vital step, many believe, in increasing rural literacy.1
Khabar Lahariya'straining effort offers a promising model. You can get an idea of how Nirantar organizes its training workshops from an August 2007 report (pdf) that Nirantar has made available online.
A Nirantar training workshop on rural journalism (Nirantar)
The workshop described in the report ran for seven days with eighteen participants. It was a mix of "group discussions, analysis of written material, field visits, film screening,2 debates, lectures and role plays."
The basic journalism concepts covered were:
What constitutes news
Sources of news
Verifying sources
Questioning gender norms
Completing stories
Effective interviewing
Ways of writing up interviews (Q&A, feature story)
I would note that the field trips, which were timed to support the discussions of what constitutes news, maintaining neutrality,3 identifying and tapping reliable sources, conducting interviews, and doing a thorough job of gathering information, were vital for giving the training participants a real feel for the process of reporting.
It is also notable that the workshop's interviewing role plays were especially well received:
This was definitely the highlight of this session: a combination of entertaining characterizations and the excitement of interacting with the trainers in a different role really worked to draw the group into the exercise. Six groups were formed, and each given a different character to interview — ranging from officials to interesting personalities (A sleazy District Magistrate, a boatwoman, a station master, a woman freedom fighter, a woman pradhan). They were given a situation, and asked to plan/prepare questions for the interview. Some of the issues that emerged were — how to deal with long, rambling, unfocussed interviewees; how to deal with officials behaving inappropriately (and thus distracting attention from the questions asked); and how to extract important information from sources who are busy/evasive. In general, the energy was high through this activity, and provided a spur to the field trips that followed.
The report closes with notes on how the training was evaluated. To test retention the trainers used a competition, with questions in various forms — multiple choice, matching, true/false, and items dealing with more detailed issues covered inthe training. The trainers' assessment:
It was deeply heartening to see that most of the group had a grasp of the basic concepts of journalism, but also were able to articulate some of the more complex issues — of what news is important, and why, of how to write certain news. It was also an exhilarating way to end the fairly long and draining week we’d had.
In addition, the trainers solicited oral and written feedback from the participants. In the oral feedback,
[m]any participants said they were nervous before they came ... – about the work that would be expected of them - but had enjoyed meeting so many people, and speaking to them, and learning so much. Many people listed the key concepts in the course (we were sure none of the 18 participants would ever forget what LEAD or KHABAR ["news"] or INTERVIEW meant!). [S]ome people shared the difficulty in understanding or remembering words that were used in the course ... but hoped that what they didn’t recall, they would in the work to follow. Uma shared what a different experience it was to be encouraged to go out and speak to so many different people.
__________ 1 You can see a sample 2007 edition of Khabar Lahariyahere.
2The film used in the workshop was Mrityudand ("The Death Sentence"), a 1997 Hindi-language release.
3 In the Indian context, maintaining neutrality was difficult for some of the training participants because they felt that the (mythical) stories they learned in their religious instruction should take precedence over alternate stories based on standard journalistic fact-finding.
As noted in an earlier post, when households have increased access to microcredit, one of the impacts can be less use of insurance because microloans make it easier to obtain informal credit in the event of a financial shock.
Last month, Knowledge@Wharton offered an overview of steadily expanding efforts to market microinsurance effectively to poor people in developing countries. As the article explains, micro insurance comprises
risk-sharing products characterized by low premiums and coverage limits [and it] generally covers everything from life and health care to weather, property, agriculture, livestock and catastrophe.
For example, in a pilot program in Bangladesh, a partnership of six NGOs and a local insurance company is offering a product that combines life insurance with some hospitalization coverage. The basic idea is to provide a formal safety net for people who have income, even if small, to protect.
The article discusses the issues participants in micro insurance market need to address, such as making sure the perils covered by property and casualty insurance are relevant for a particular locality. Another key issue is developing a solid partnership among the parties involved — typically, NGOs, micro finance institutions, insurance companies, regulators, and community groups. Last but not least is the issue of educating both the target population and the micro insurance providers.
Two days ago I wrote a post concerning research studies evaluating microcredit programs in India and the Philippines. Right on cue, today's Wall Street Journal published an article by Ketaki Gokhale that describes how microcredit in India may be moving beyond what the researchers' found — a mixed story of effectiveness in mitigating the effects of poverty — to being positively malign for some communities.
The problems Gokhale describes arise from the shift of microcredit into what is called its "second generation" form. Microcredit began as a substantially philanthropic activity, with financing derived from various non-profit sources. Recently, profit-seeking investors have become actively involved, and a range of risky practices akin to those observed in recent years on a much larger scale in standard credit markets are showing up.
The basic problem is an overabundance of funds available for lending relative to the number of creditworthy prospects for microloans. The plentitude of funds, combined with microlenders' often paying their field officers on a commission basis, makes careless underwriting a powerful temptation. For example, borrowers may be allowed to lie about such matters as the intended use of the loan they're seeking and their existing level of debt.
There is also an issue of interest rates, which Gokhale reports are generally in the 24% - 39% per annum range. Once borrowers take out a loan at a high rate, if they do not put the funds to use to generate sufficient income to pay off the loan, they can find themselves in a spiral of indebtedness similar to that which afflicts many users of payday loans in the US.
Finally, there is a religious element to the story. Many Muslim borrowers in Ramanagaram, the city in southern India where Gokhale did much of her reporting, have stopped paying on their loans in response to direction from their mosque imams, who object to "the overindebtedness of the community, and the strains it's putting on family life." Gokhale reports that these complaints are viewed by some as a smokescreen for trying to disempower women, who are the majority of borrowers. This revolt against honoring loan agreements is spreading to other communities.
The Efficacy of Microcredit in Promoting Business Growth and Alleviating Poverty
In severalpreviousposts I've discussed microcredit. These posts have all looked at programs that combine provision of credit with training in managing a small business and the revenue it generates. The key issue is how much impact these programs have on business size and on the standard of living of the people and communities involved.
Now some further research on the efficacy of microcredit in alleviating poverty and promoting business growth has come to my attention, thanks to The Economist, which published a one-page article on the subject in their July 18 issue. Two studies are described:
An investigation of the impact of access to microfinance in Hyderabad, India. The study compared low-income neighborhoods that were added to a bank's microfinance market area with low-income neighborhoods that were left out of the market area. Assignment of neighborhoods to the treatment and control groups was random.1
An investigation of the impact of access to microfinance in the Philippine provinces of Rizal and Cavite and in the Manila area. As in the Indian study, this Philippine study used randomizing to address the problem of self-selection, i.e., the problem that the most entrepreneurial individuals are the ones most likely to take advantage of microcredit, and providers of microcredit favor markets where such individuals are concentrated.
In the Philippine case, it was individual credit applicants who were assigned randomly to the treatment and control groups. Those in the treatment group received loans, while those in the control group did not. All of the applicants in question were of marginal creditworthiness, so bank loan officers, not privy to the nature of the experiment, accepted (with a few exceptions) their computer system's decree as to whether or not a particular applicant should be approved, even though the decision was, in fact, random.2
Neither of the two microcredit programs was bundled with client training.
The Hyderabad study's findings, based on a survey done 15 to 18 months after the launch of the program, suggest that
microcredit does have important effects on business outcomes and the composition of household expenditure. Moreover, these effects differ for different households, in a way consistent with the fact that a household wishing to start a new business must pay a fixed cost to do so. Existing business owners appear to use microcredit to expand their businesses: durables spending (i.e., investment) and business profits increase. Among households who did not own a business when the program began, those households with low predicted propensity to start a business do not increase durables spending, but do increase nondurable (e.g., food) consumption, consistent with using microcredit to pay down more expensive debt or borrow against future income. Those households with high predicted propensity to start a business, on the other hand, reduce nondurable spending, and in particular appear to cut back on "temptation goods," such as alcohol, tobacco, lottery tickets and snacks eaten outside the home, presumably in order to finance an even bigger initial investment than could be paid for with just the loan.3
The authors of the study note that it is
somewhat hard to assess the long run impact of the program. For example, it is possible that in the longer run those people who are currently cutting back consumption to enable greater investment will become significantly richer and increase their consumption. On the other hand, the segment of the population that increased its consumption when it got the loan without starting a business may eventually become poorer because it is borrowing against the future, though it is also possible that they are just enjoying the "income effect" of having paid down their debt to the money-lender (in which case they are richer now and perhaps will continue to be richer in the future).
Also
microcredit ... appears to have no discernible effect on [children's] education, health, or women's empowerment [decision-making concerning household spending, investment, savings, and education]. Of course, after a longer time, when the investment impacts (may) have translated into higher total expenditure for more households, it is possible that impacts on education, health, or women's empowerment would emerge. However, at least in the short term (within 15-18 months), microcredit does not appear to be a recipe for changing education, health or women's decision-making. Microcredit therefore may not be the "miracle" that is sometimes claimed on its behalf, but it does allow households to borrow, invest, and create and expand businesses.
The Philippine study also used surveys to assess microcredit impacts. The surveys were conducted 11 to 22 months following an applicant's entrance into the experiment, and yielded these findings:
Individuals assigned to the treatment group did borrow more than those in the control group.
The marginally creditworthy microentrepreneurs who received credit shrank their businesses relative to the control group. The researchers suggest that this was a result of deciding to lay off employees who were not very productive. "[T]reated microentrepreneurs used credit to re-optimize business investment in a way that produced smaller, lower-cost, and more profitable businesses."
A rise in business profit does not translate into income and consumption changes. E.g., there were no significant effects on two key measures of consumption: food quality, and the likelihood of not visiting a doctor due to financial constraints. This could be due to the combination of increased business profits and decreased outside employment (with an increase in school attendance and perhaps related expenditures), thus leading to no change in total household income or consumption.
The treatment group reported increased access to informal credit to absorb shocks. This informal credit reduced the incentive to acquire formal and informal insurance.
There was some evidence that expanding access to capital (credit in this case) increases profits for male, but not for female, microentrepreneurs. Males seem to use the increased profits to send children to school; there is a concomitant decrease in household members employed outside the family business.
There was no evidence that increased access to credit improves subjective well-being — optimism, calmness, lack of worry, life satisfaction, work satisfaction, lack of undue job stress, decision making power, and socio-economic status. To the contrary, there was some evidence of a small decrease.
In sum:
"... increased access to microcredit leads to less investment in the targeted business, to substitution away from labor and into education, and to substitution away from insurance (both explicit/formal, and implicit/informal) even as overall access to risk-sharing mechanisms increases. Thus although microcredit does have important — and potentially salutary — economic effects in our setting, the effects are not those advertised by the "microfinance movement." Rather the effects seem to work through interactions between credit access and risk-sharing mechanisms [e.g., access to loans from family members] ... . At least in a second-generation setting [in which microcredit is provided by profit/sustainability-seeking institutions], microcredit seems to work broadly through risk management and investment at the household level, rather than directly through the targeted businesses. [emphasis added]
Also:
... treatment effects [e.g., on business profits] are stronger for groups that are not typically targeted by microcredit initiatives: male, and relatively high-income, borrowers... The overall picture of our results also questions the wisdom of targeting microentrepreneurs to the exclusion of consumers/wage earners. ... [O]ur findings highlight that money is fungible. Entrepreneurs do not necessarily invest loan proceeds in their businesses. Limiting microcredit access to entrepreneurs may forgo opportunities to improve human capital and risk-sharing for non-microentrepreneurs.
The Philippine researchers' concluding note is that "household financial arrangements in developing countries are complex ... [so] it is important to measure impacts on a broad set of behaviors, opportunity sets, and outcomes. Business outcomes are not a sufficient statistic for household welfare, nor even necessarily the locus of the biggest impacts of changing access to financial services."
3 "Among those who did not already own a business a year ago, the following characteristics predict the decision to become an entrepreneur: whether the wife of the household head is literate [a proxy for willingness to defer consumption], whether the wife of the household head works for a wage [which will reduce the return to opening a business], the number of prime-aged women in the household [also a proxy for willingness to defer consumption], and the amount of land owned by the household [a proxy for initial wealth]."
Jacqueline Novogratz's Ideas for Alleviating Global Poverty
You can get an overview of Jacqueline Novogratz's views concerning alleviating poverty in developing countries by reading a short article about her work that appears in the May 23 issue of The Economist.
Novogratz is the CEO of Acumen Fund, which she founded in 2001. As the website explains,
Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. We seek to prove that small amounts of philanthropic capital, combined with large doses of business acumen, can build thriving enterprises that serve vast numbers of the poor. Our investments focus on delivering affordable, critical goods and services — like health, water, housing and energy — through innovative, market-oriented approaches.
To hear directly from Novogratz, you can watch the video below, which is the talk she gave at the conclusion of the 2008 Aspen Ideas Festival.
In the video, Novogratz addresses at a general level lessons learned and to do's for those seeking to assist with alleviating global poverty. For more detail about such matters as Acumen's investment principles and performance metrics, you can browse through the Acumen website.
In sum, the Acumen approach is to
use philanthropic capital to make disciplined investments — loans or equity, not grants — that yield both financial and social returns. Any financial returns we receive are recycled into new investments.
M&A Activities of Companies Based in Developing Countries
The literature on economic development gives considerable attention to the means of technology transfer between developed and developing counries. There is an instructive case study of one such mechanism in the May issue of the Harvard Business Review.
Nirmalya Kumar, a professor of marketing at the London Business School, writes about how the India aluminum company Hindalco has used cross-border acquisitions to obtain competencies, technology, and knowledge it needs in order to carry out its strategy of becoming a strong global enterprise, manufacturing both basic and value-added products. This competency-driven rationale for acquisitions is a distinct contrast to the synergies-and-cost-reduction rationale that generally lies behind acquisitions made by companies based in developed countries.
Kumar lays out an eight-year timeline of what he calls the "M&A competency stairway" that Hindalco has gradually climbed in order to build the "industry-related skills and M&A techniques" it needed to pursue ever more challenging acquisition targets. The stairway has five steps so far:
Starting small, Hindalco acquired two Indian companies, Indal and Annapurna Foils, in 2000. Competencies gained:
How to bid for, negotiate with, and integrate companies in India
How to manage a large customer-focused, value-added products business
How to turn around a small Indian company (Annapurna) in receivership
In 2003, Hindalco acquired the Nifty and Mount Gordon mines in Australia. Competencies gained:
How to take over, turn around, and operate companies in a developed market
How to list companies on a stock exchange abroad and manage investor relations
In 2005, Hindalco acquired the St. Anne Nackawic Pulp Mill in Canada. Competencies gained:
How to manage a global supply chain as a a buyer and a seller
How to manage price fluctuations and foreign exchange risks across countries
In 2006, Hindalco acquired Minacs Worldwide in Canada. Competencies gained:
How to acquire assimilate, and delist a company in North America
How to manage a large, HR-intensive multinational operation
Finally, in 2007, Hindalco acquired Novelis North America, a company more than twice its size. Kumar acknowledges that the jury is out on how this latest acquisition will fare, both because it is so recent and because of the current depressed market conditions that Hindalco, along with everyone else in the aluminum industry, is coping with. In any case, it seems safe to say, as Kumar does, that Hindalco could not have tackled such a large acquisition without the competencies built through previous, smaller-scale acquisitions.
Kumar offers this summary of Hindalco's M&A strategy:
Making aluminum at competitive prices requires economics of scale, process skills, and cheap raw materials. Selling value-added aluminum products demands attention to quality, service, and brands; product development skills; and a knack for forging customer relationships — capabilities that Hindalco didn't possess [prior to 2000]. To learn them, it decided to acquire the leading downstream companies: Indal in India and Novelis overseas. The objective was to gain new competencies — not to get big fast or to reduce costs.
Note that, because the rationale is building competency, acquisition programs like that of Hindalco do not involve wholesale replacement of the management of acquired companies. Also, they have a long-term focus, as opposed to a focus on realizing profits quickly through cost-cutting.
In a couple of previous posts — one dealing with Monique Dembele, a native health worker in Mali, and the other discussing the Barefoot College, which began in India and has since spread to other countries — I've looked at how training can be geared to the needs of people in impoverished areas of the world.
Now the National Geographic has published an article in their December 2008 issue that offers another compelling example of how effective training can equip members of a rural community to deliver valuable services to fellow residents.
The Comprehensive Rural Health Project (CRHP), or Jamkhed (the name of the city east of Mumbai where the organization is based), has been providing training to village health workers (VHWs) since 1970. The training enables the VHWs to deliver effective basic health services and to teach such health-promoting practices as good nutrition, breast-feeding, hygiene, and oral rehydration. According to Raj Arole, CRHP's founder and director,
A village health worker ... can take care of 80 percent of the village's health problems, because most are related to nutrition and to the environment. Infant mortality is actually three things: chronic starvation, diarrhea, and respiratory infections. For all three, you do not need doctors.
Interestingly, one of the key aspects of the training for the VHWs, many of whom are coimpletely illiterate when they begin, is boosting their self-confidence.
The VHWs are supported by visits from a mobile team that includes a nurse, paramedic, social worker, and sometimes a doctor. The visits are initially weekly and then are scaled back as the VHW's expertise builds. At the moment, the mobile team actively visits 45 of the 120 villages where CRHP currently works. (In the thirty-eight years since its founding, CRHP has provided training to VHWs in 300 villages.) Patients requiring more complex care than the VHW can provide are referred to the hospital in Jamkhed.
CRHP's VHW training is ongoing — there is a Tuesday-Wednesday weekly session at the CRHP compound. At these sessions VHWs can "discuss problems in their village, review what they learned the previous week and tackle a new subject, such as heart disease." Back in their villages, the VHWs train villagers to diagnose and solve common problems on their own.
The Jamkhed Institute in Community Health and Population, established in 1992, aims to embed enhancement of rural healthcare delivery in a broader context of rural development. Thus, the Institute's offerings address not only health topics, but also agriculture, micro-credit and loans, income-generating programs, government schemes, and watershed management.
With good reason, much classroom training nowadays is led by facilitators rather than by teachers per se. The idea is that adult learners should generally direct their own learning as far as possible, and they should spend their training time as far as possible working on real issues and problems with a team of colleagues. The facilitator's role is to help with sharing of expertise, keeping discussions on track, and posing questions that get people to think more deeply.
Facilitators do, in fact, generally include periods of teaching in the flow of training, often to present concepts, to provide memorable examples of how to handle various situations, and to demonstrate techniques the training participants need to learn.
There is a type of more traditional teaching that organizations should provide on a regular basis. This is teaching done by the organization's leaders that is designed to pass along expertise and to reinforce internal messaging and branding.
In the November 2008 issue of Chief Learning Officer magazine, Michael Chavez and Gil McWilliam of Duke Corporate Education, and Sushanth Tharappan of the Infosys Leadership Institute, offer advice on how to optimize leaders' teaching. The article isn't as clearly written as it should be, but it's still worth perusing because it captures instructive details of several years' worth of experience with Unisys' "Leaders as Teachers" initiative.
The authors point to three reasons teaching by leaders is valuable:
It's a way of passing tacit knowledge along from senior experts to the rising generation of leaders.
What leaders have to say tends to get attention — "... bringing leaders to the forefront of the process of developing other leaders ... sends a powerful signal to the organization about the value of specific insights and the importance of the development process itself."
The Leaders as Teachers approach forges a productive alliance between the organization's learning and development professionals and top management.
Based on their experience with leaders teaching at Infosys, the authors offer five caveats:
Make sure that what the leaders teach is content making a specific contribution to achieving explicit learning goals.
Content likely to fit the bill includes material that helps employees understand why and how to change their focus or priorities, that helps institutionalize use of new tools or knowledge that the leader doing the teaching has had a direct hand in producing, or that affords the leader an opportunity to solidify his or her own command of concepts, frameworks, and practices by explaining them to learners.
In the latter case, the leader is also, in effect, acting as a champion of specific changes the organization is making in order to develop capabilities needed for executing its strategy.
Make sure the teacher uses techniques, such as posing stimulating questions, that involve the learners "in the creation of new meanings, in finding applications and examples and in stretching" everyone's imaginations.
Make sure a leader being considered for a teaching role is able to invest the necessary time "to work closely with internal learning and development professionals — and often outside consultants and educators — to build learning outcomes and design the content, refine the materials and design, and rehearse the delivery."
Use other training resources (i.e., not a leader) for the more basic portions of a training effort. Have the leader step in to teach how concepts already presented apply to company-specific situations.
Organize a cadre of teachers large enough to handle the number of sessions being scheduled. No one senior leader is going to have time to meet with more than a few groups. Note that it will probably be necessary to allocate time to train-the-trainer preparation.
In a sidebar to their article, the authors note that the actual content of the programs Infosys offers is selected
based on input from multiple listening mechanisms: a survey of high-potential leaders and their consolidated personal development plans; senior management performance reviews; and the opinions of business-enabling functions such as HR, corporate planning and quality.
To actually produce the content, Infosys uses a process that helps leaders "deconstruct their learning into teachable points of view," and then incorporates those POVs into an engaging training design.
To ensure the relevance of the content, Infosys:
Aligns the content to the company's leadership competency framework. Each session provides a "platform for illustrating or narrating examples of how leadership competencies actually play out at work."
Places great emphasis on debriefing — i.e., drawing lessons from the tales the leader tells about problems and dilemmas he/she has had to handle.
Encourages learners to approach their jobs with confidence. Unisys places strong focus on helping learners believe that, with diligent application of their enhanced skills and knowledge, they can achieve results comparable to those achieved by the leader doing the teaching.
You can read more about the Infosys approach to leadership development, including measurement of its impact, in a April 2008 interview with Girish G Vaidya, head of Infosys Leadership Institute.
Alerted by a report tonight on the PBS Newshour with Jim Lehrer, I've spent some time informing myself about the mission and activities of the Barefoot College.
The Barefoot College was founded in 1972 by Sanjit "Bunker" Roy in Tilonia, the village in Rajasthan, India, where he was living.
In its own words, the Barefoot College takes as its mission addressing
... problems of drinking water, girl education, health & sanitation, rural unemployment, income generation, electricity and power, as well as social awareness and the conservation of ecological systems in rural communities.
The College benefits the poorest of the poor who have no alternatives.
The College encourages practical knowledge and skills rather than paper qualifications through a learning by doing process of education.
You can get an idea of the work the Barefoot College is doing — not only in India, but also in other developing countries around the world — by watching the video below. Note that the women learning to install and maintain solar panels and lanterns at the Barefoot College are generally illiterate or semiliterate, but this does not prevent them from acquiring the necessary skills during six months of practical training.
The Barefoot College has a channel at YouTube where you can browse through addiitonal videos detailing its work.
Last month the Kauffman Foundation of Kansas City MO released a report examining how India has been able to upgrade its workforce in rapidly growing industries despite continuing pervasive deficiencies in the country's school system.1
The full report, written by Vivek Wadhwa, Una Kim de Vitton, and Gary Gereffi (WVG), is 77 pages long. The Harvard International Review provides synopsis.
WVG's central conclusion is that Indian companies in IT and other sectors, such as business-process outsourcing, semiconductors, pharmaceuticals, financial services, retail, hospitality, and education,
have adapted and perfected western practices in workforce training and development, and now take workers with poor education and weak technical skills and turn them into highly productive technical specialists and managers able to compete on the world stage.
... We conclude that out of necessity — because of educational weaknesses; skills shortages; competition for top talent; turnover; and rising salaries — leading businesses in India have developed highly advanced, innovative practices and that these are allowing industries in India to become globally competitive and grow rapidly.
The message to companies in the United States is "go thou and do likewise."
So what exactly have companies in India been doing to recruit and retain talent and to equip their workers to compete at an international level? WVG conclude that
India has learned and perfected the best practices of leading companies that have been outsourcing their computer systems and call centers.
... Indian industry ... has built innovative and comprehensive approaches to workforce training and management. The initial focus was on training new recruits and filling entry-level skill gaps. Now, these companies are investing in constantly improving the skills and management abilities of their workers and in providing incentives for them to stay and grow with the company. There is also widespread collaboration between industry players and academic institutions to accelerate the growth of needed talent pools.
WVG identified seven areas in which Indian companies are using innovative HR practices:
Employee recruitment
New-employee training
Continuing employee development
Managerial training and development
Performance management and appraisal
Workforce retention
Education upgrades
The specific innovations for which WVG give Indian companies credit are:
thorough integration of HR development efforts into day-to-day operations, employees' career advancement, and company reward systems.
application of technology to managing and integrating the processes listed in the previous bullet.
basing executive-level decision making on these processes.
Details concerning how the 24 Indian companies WVG studied most closely handle recruitment and retention, new-hire training, ongoing employee and manager training, and formal performance management are provided in the Harvard International Review synopsis. Numerous examples are provided in the full version of WVG's report.
__________ 1 If you have trouble accessing the pdf file of the report from the link on the Kauffman Foundation website, you can go to the Social Science Research Network to download the file.
2 Vivek Wadhwa is an executive in residence/adjunct professor at the Pratt School of Engineering at Duke University, and a fellow in the Labor and Worklife Program at Harvard Law School. Una Kim de Vitton is a doctoral candidate in the organizational behavior department of Harvard Business School and the sociology department of Harvard University. Gary Gereffi is the director of the Center on Globalization, Governance & Competitiveness at Duke and a professor in Duke's sociology department.
Model of the Vedic Temple and Planetarium Mayapur, India
"March 21 and September 21 are known as the Spring Equinox and the Autumn Equinox respectively. They are singularly important days in the year since the Sun rises exactly opposite the East everywhere on Earth and sets exactly in the West. Also, everywhere on Earth experiences 12 hours of day and 12 hours of night, thus the equinoxes are days of perfect balance and harmony.
"The alignment of the Temple to the four directions means that its relationship with the Sun will be strengthened on these two days each year, with the Sunrise occurring directly through the East Gate, falling at the feet of Sri Sri Radha Madhava sanctum sanctorum."
In a paper (pdf) published in the Proceedings of the 2003 Association for Business Communication Annual Convention, Asha Kaul, a professor now at the Foundation for Liberal and Management Education in India, reported on interview-based research concerning tactics employees use to exert upward influence in a certain type of organizational setting, namely one characterized by:
Transparency of policies, roles, attitude to work, and relationships with superiors and subordinates.
Flexibility with respect to such matters as deadlines, goals, policies, and dealing with personal issues.
An open door policy, meaning, more specifically, receptivity to subordinates' ideas.
Free-flowing communication/informal talk, meaning greater use of informal chats in person and by phone than of formal meetings and email.
Kaul cites as the main finding of her study the conclusion that "there is more flexibility in terms of usage of tactics when the communication process is informal."
For me, what was most interesting was the set of upward influence tactics Kaul found people using at the global company where she conducted her 23 interviews:
Reason and logic
Upward appeal
Imitation of the superior's communication and behavioral patterns.
Aggression, i.e., the "need to take a stand, push [one's] way forward, and convince the other by forcing [one's] views and opinions."
"... an interviewee recounts that the appropriate person to take a decision in moments of crisis is the employee 'on the spot'. ... In this situation, unwillingness of the superior to listen or unfamiliarity with the situation, for instance, can result in time loss and cancellation of deals. Such instances necessitate that the subordinates merely 'tell' the superior of moves being taken for producing desired results 'because our presence is in a do or die situation'."
Reasoned aggression, defined as "forceful expressions or statements, pushing forward of ideas relentlessly, unmindful of the convictions of the other party."
"... this study revealed that there was a clubbing together of reason/logic and aggression. From the findings it emerges that usage of either reason or aggression is not enough. Conjoining the two tactics produces optimum results in persuasion."
Nonchalance, a "tactic in which the agent makes an attempt to sway the target by indicating lack of interest or involvement in the subject under discussion. ... This take it or leave it tactic was seen to follow the reasoned aggression tactic."
As described by one interviewee: "If the boss is not willing to listen or get convinced by reason, aggression or a combination of the two, I move on to a very effective way of convincing him ... Show total lack of interest in the issue ... show disinterest in the team proceedings ... the [superior] then asks me the reason for it and in an informal chat I tell him."
It is the last two tactics — reasoned aggression and nonchalance — that are relatively uncommon in discussions of upward influence, though certainly not unheard of among people with decent influence skills. Kaul's description of their use brings a welcome additional degree of realism to her report on how people at a dynamic organization get others to see things their way and to act accordingly.
Research published by David Ralston and colleagues in 2001 reinforces the idea mentioned in an earlier post that broadly defined cultural features of different countries cannot get us very far in understanding the reasons behind similarities and differences in strategies of upward influence employees choose to try in various situations.
Ralston et al. looked at Germany, the Netherlands, Hong Kong, India, Mexico, and the US. The primary goal of their study was to
identify culturally inherent differences in subordinates' choices of influence tactics, which in turn may contribute to our understanding of the relationships between superiors and subordinates from different cultures.
The tool used was the Strategies of Upward Influence (SUI) instrument. Their findings, in brief:
In almost all cases there is agreement across the cultures on whether an upward influence tactic is viewed as a positive or negative type of behavior. However, there is divergence in the degree to which the various tactics are preferred across the six countries.
In the US and the Netherlands, there was consistent support for soft strategies (Good Soldier and Image Management) and a consistent rejection of hard strategies (Information Control and Strong-arm Coercion).1
German and Indian managers were more balanced in their moderate use of all tactics than were managers in the other four countries.
Hong Kong and Mexican managers were more open to using the negatively perceived hard strategies and did not perceive the soft strategies to be as productive as did managers in the other four countries.
A more theoretically oriented study Ralston published with Jane Terpstra-Tong in 2002 offers further thoughts on the factors that determine preferences concerning upward influence tactics. After a review of the literature, Ralston and Terpstra-Tong put forward a "Cross-Cultural Model of Upward Influence Selection" adapted from pioneering work of Lyman Porter, Robert Allen, and Harold Angle.2 The model postulates that a subordinate (the "agent") who has decided to try to influence a superior (the "target") will select a strategy based on five factors:
the target's characteristics, which are influcenced by the environment in which the target is operating. These characteristics include the target's power, his/her leadership style, and the cost involved in approaching the target.
the agent's own characteristics, which are influenced by the environment in which the agent is operating. These characteristics include the agent's personal and organizational goals, age, gender, need for power, need for achievement, propensity to take risks, etc.
the relationship that exists between the agent and the target, i.e., how much the target likes the agent, how much the target perceives similarity with the agent, how much the target and the agent trust each other, etc.
situational characteristics, including the organization's structure, the ambiguity of the situation, resource scarcity, and how big a personal stake the agent has in affecting the target's decision.
the agent's belief system, i.e., the agent's expected cost and benefit of the attempt at influence, and the perceived societal and organizational norms endorsing or discouraging various influence behaviors.
After the agent has made the attempt at upward influence, there are two feedback mechanisms — adjustment in the agent's:
willingness to undertake subsequent efforts at upward influence.
beliefs concerning what strategy best fits a particular constellation of the five factors listed above.
As indicated in severalearlierposts, many businesspeople and trainers around the world have adopted practices and interventions that reflect an analysis implicitly, if not explicitly, akin to that embodied in the model outlined above. For example, trainers in multinational companies commonly teach employees to take their bosses' preferences into account in deciding how to present proposals, and teach managers to facilitate employee input in order to tap employees' knowledge and ideas.
In my view, the social psychologists whose research I've been reviewing would benefit by adding to their research agenda investigation of how subordinates and superiors respond to training directed at improving use of, and response to, upward influence strategies.
__________ 1 Good Soldier: Get ahead through hard work that benefits the organization. Image Management: Actively present oneself in a positive manner across the entire organization. Information Control: Control information that is restricted from others in order to benefit oneself. Strong-arm Coercion: Use illegal tactics, such as blackmail, to achieve personal goals.
2 Lyman W. Porter, Robert W. Allen, and Harold L. Angle, "The Politics of Upward Influence in Organizations," in L.L. Cummings and Barry M. Staw (eds.), Research in Organizational Behavior, Vol. 3 (Greenview CT: JAI Press, 1981), pp. 109-149.
During four years working as an investment banker in Thailand, van Agtmael
observed the astonishing rapidity with which local firms absorbed international lessons, from raising chickens or producing textiles to assembling cars, and how they often managed to add their own local innovations to the mix.1
Upon finishing van Agtmael's book, I decided to look for additional examples of how emerging-market companies were incorporating practices of the developed-country firms in their own strategies and operations. I was particularly interested in anything I could discover relating to training.
The most interesting example I've come upon so far is adoption of economic value added (EVA) as a key performance indicator by the Tata Tea Group, headquartered in Kolkata (Calcutta) and with a presence in over 40 countries around the world. Sales in 2006 sales came in at $700 million, making the company #2 in the branded tea products industry. (Tata Tea has also owned tea plantations in India and Sri Lanka, but they are in the process of divesting these.)
Tata Tea's adoption of EVA was part of an initiative by its parent, the Tata Group, which is aimed at making all the Tata companies globally competitive. Himi Khusrokhan, Tata Tea's managing director, explained the rationale:
An organisation that measures business performance purely in accounting terms will fall into the trap of taking decisions on the basis of 'impact on profit', a myopic way of running a business, rather than 'impact on wealth', a measure that forces one to think of the long-term consequences of every decision made.2
It was in order to do a better job of creating wealth that Tata Tea decided to embrace EVA. By monitoring EVA, Tata Tea can gauge whether its current strategies are producing satisfactory growth. If not, the strategies are re-examined.
Tata Tea's experience is that implementing EVA was no cakewalk.
They needed to change mindsets and beliefs that were once held dear. For instance brands became "captive to plantations" and the choices open to the company were narrowed down. Dependencies were created between plantations and brands, and these became difficult to sever.
Training was the first-line tool used to move employees toward the habit of thinking in terms of value creation. In addition to the challenge of eliciting a new mindset, there was also the challenge of developing business management skills among employees, such as finance personnel, who had not previously been expected to contribute to the company's strategic decision-making.
However challenging, the training was essential for equipping the Tata Tea organization to continue growing in the face of intensifying global competition.
__________ 1 Source: An excerpt from Antoine van Agtmael's book that you can read here.
2 Source: A Tata Tea webpage describing their use of EVA. To project the impact of decisions on wealth, EVA takes into account projected changes in revenue, costs, and capital cost. The aim is to generate value for shareholders by ensuring that a company earns a return on capital greater than the cost of capital. Increases in EVA are achieved by a combination of revenue increases, and cost and capital cost reductions.
