1. HR Is A Profit Center, And Here’s How To Prove It
2. The Goal of Diversity Is Not Harmony
3. Top Ten Current "Return On Total Rewards" Themes
4. Dangerous Ideas: Understanding The Dangers Of Self-Fulfilling Theories
5. The Power of Your Thoughts
6. An Entrepreneur's Journey in Africa
7. Downloads: Census 2004 South African Women In Corporate Leadership
8. Case-Law & Legislation Review:
9. Unsubscribe & Moving Soon

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1. HR Is A Profit Center, And Here’s How To Prove It*

By Dr. John Sullivan and Master Burnett who can be contacted at

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1. Introduction

The goal of every corporate department head should be to become the leading "profit center" for their corporation, however most people in HR accept the notion that their function isn’t capable of generating a profit and is therefore doomed to be an administrative cost center. Unfortunately, that pessimistic view has become a self-fulfilling prophecy for too many organizations. From an advisors perspective, more than two-thirds of the established HR functions in existence today are incapable of demonstrating a measurable impact on corporate productivity or profitability by design. In an era where attempts to differentiate the products and services from one firm to the next have become increasingly reliant on human elements such as customer service it is sad that more human resources functions have not emerged from the backwater that is administration. Times have changed, and now more than ever it is easy for human resources to demonstrate the economic value of it programs and policies.

2. Focusing on Cost Containment is Less Strategic than Driving Revenue Growth

For the past decade the human resource function has operated under the myopic focus that process efficiency was the most critical deliverable in the enterprise. While this misguided focus can be partially attributed to external pressure from the finance function and the budgeting process, such pressure can in most cases be evaded by proactively developing the business case for all activities undertaken in HR. Unfortunately, developing a business case rarely happens and instead, the human resource function continues to make trade offs between quality and cost that carry on the lowest common denominator of deliverables at a slightly lower cost. This never-ending focus, while easy to accomplish and attractive to some, fails to address or solve critical business problems facing the organizations that could be remedied via HR. Cost containment is much like periodically replacing water stained acoustic ceiling tiles versus calling out a roofer to fix the root of the problem; in the end replacing the tiles periodically will cost you much more.

The other way to look at cost containment in HR is that of a racecar spinning its wheels; it requires a lot of effort but produces little result. When cost containment efforts are first undertaken the results can be fairly significant, however as time passes and the efforts continue the value of the savings diminish. Today, cost containment efforts pertaining to the activities of the human resource function impact such a miniscule portion of the overall corporate budget, that the savings produced are insignificant to say the least. This is because the total HR budget in many organizations is less than 4% of all corporate expenditures.

While it is true that HR receives only a small portion of the total corporate budget it is charged with managing the programs, policies, and infrastructure governing the resources that on average are allocated 60% of the total corporate budget, the workforce. Which makes more sense, achieving a 7% cost savings on 4% of the total corporate budget, or a 1% growth in return on 60% of the total corporate budget? The answer should be clear, check out the math below based on a real professional services firm traded on the New York Stock Exchange!

Assumptions:

· 2004 Revenue: $2,262,200,000

· 2004 SG&A Expense (Budget): $2,142,900,000

· 2004 HR Budget: $69,000,000 (3.2% of total budget)

· 2004 Salaries & Benefits: $1,208,922,000 (56.4% of total budget)

· 2004 Return on Salary & Benefits Expense: 5.4%

The Math:

· Value of 7% Reduction in HR Costs:

- 7% X $69,000,000 = $4,830,000

· Value of 1% Workforce Productivity Gain:

- 1% X $1,208,922,000 = $12,089,220

That’s a difference of $7,259,220!

3. How to Demonstrate the Productivity, Revenue and Profit Impact of Specific HR Activities

It's not enough to "believe" that HR activities and programs actually work; you must also be able to demonstrate to any critics (particularly the CFO’s) satisfaction that they positively impact employee productivity, revenue and profit. Unfortunately, most HR professionals go about proving that impact the wrong way. The process of demonstrating business impact should start by assessing all current HR programs to establish a baseline and foundation point for future analysis. Once you have caught up, then step two is to keep current by evaluating all newly proposed programs using the same process.

General Tips for Proving Impact

There are four basic ways to provide "dead bang proof" that a program works. Each is similar to the way a new drug gets tested or that new ads and new products are tested. The most effective ones are listed first.

1. Split sample contrast -- Use a split sample or a control group. Instead of applying a new HR program to the entire team or division, apply it to only half to demonstrate the relative impact of the program

2. Before and after contrast – Measure employee performance just prior to program implementation and again after implementation, show the contrast in performance.

3. Demonstrate a correlation -- Show a direct correlation between the increased usage of a tool by managers and employees and an increase in productivity, revenue or profit. Also demonstrate that when usage goes down, so does productivity

4. Results after implementation -- Show that employee performance is high immediately after the program is implemented (In this case you do not have "before" performance data (as in #2) for precise comparisons)

Examples by Function

Training

· Split the sales team and provide one half of the sales team with increased sales training. Do nothing to the other half. Contrast the difference in sales between those with increased training and the sales people without the additional training

· Demonstrate that there is a high correlation or connection between the number of hours a worker receives in training and their productivity

· Show that lower training hours correlates with increased error rates, accidents and lower product quality. Calculate the costs of errors and accidents to prove the business impact

· Assess worker performance before training and then show that worker productivity increases immediately after they receive training

Recruiting

· Demonstrate that newly hired workers produce more than the average worker (i.e. one already on staff) by directly comparing their productivity in jobs where output is easily measurable. For example, demonstrate that the sales people you hire under your "recruiting system" produce significantly higher average sales than your current employees. Next calculate the dollar differential in output between the new hires and the average existing employee. Next multiply that dollar differential amount by the number of new hires, to show the overall revenue impact that new hires have

· Run a "pilot" employee referral program in one isolated division and demonstrate the decreased costs and increased quality of hires that result from the pilot program

Compensation

· Show that giving a worker a 10% raise increases their productivity by more than 10%

· Provide evidence that, as the percentage of your employees pay that is tied to performance increases, so does their output and productivity

· Demonstrate a correlation between high pay and high productivity. Show that highly paid workers produce more than the dollar value of their wage differential (between them and the average paid worker)

· Calculate the ratio of the dollar value of employee output per dollar spent in compensation and benefits. Compare the difference between this year and last year. Show that you are continually getting more for your compensation dollar and also demonstrate that your output per "comp dollar" is significantly higher than your competitors

Employee Relations

· Demonstrate that "problem employees" and bottom performers increase their performance and become "average or better" performers within a year after employee relations works with them.

· Prove the correlation between "highly rated" (by employees) managers and productivity by showing the percentage increase in productivity that occurs when a highly rated manager replaces an average rated manager in a business unit (and vice versa). Next, show that your employee relations and training efforts significantly increase the "rating" of previously poorly rated managers

· Demonstrate that your "bad manager" identification program identifies, fixes or removes bad managers months faster than the industry average

Work Life Balance

· Demonstrate that as the percentage of workers that take advantage of work life balance programs increases, so does the productivity in their department or division

· Show that the retention rates of employees increase as work life balance usage increases. Calculate the dollar impact of keeping key employees months longer

· Ask new hires "why they took the job" and demonstrate that the top hires took the job primarily because of your work life balance offerings

· Ask top performers (three months after termination) "why they left" to demonstrate that an a lack of work life balance programs wasn’t a significant factor in their decision to leave

HRIS

· Demonstrate a positive correlation between the increased availability of online HR "answers". And conversely, a decrease in the amount of "wasted hours" that employees and managers report that they spend "looking" for answers within the HR department. Calculate the economic value of reducing those "wasted hours"

· Demonstrate HRIS’s effectiveness by showing the increased accuracy of "HR answers" that are provided on the firm’s Internet site, as compared to the answers received from (the significantly more expensive) HR generalists

5. Concluding Advice

CEO's are laser focused on the results that their board of directors holds them accountable to. As a result, VP's of HR can make the transformation into a profit center more visible by identifying exactly what their CEO is measured and rewarded on and internally branding or highlighting their related successes. To insure that your analysis passes muster, build an alliance with the finance function, after all they are responsible for measuring ROI. Develop your profit center plan in conjunction with the CFO's office. Be eager to learn about metrics and how to measure and report things the way finance professionals do. Be equally willing to teach the CFO about the impact that motivation, training, recruiting and retention can have on increasing employee productivity and company profit. If you include each of the critical success factors in your plan you will see that HR will be transformed from a backwater "overhead" function into the #1 internal contributor to increased productivity, revenue and profit. The time has come for HR to become the "next" corporate hero… are you up to the challenge?

*Reprinted by permission

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2. The Goal of Diversity Is Not Harmony*

By Barrie Bramley who can be contacted at

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Travel the world. It doesn’t matter where you go. People are Diverse. Dictionary.com defines diversity as, "A point or respect in which things differ." Simple really. So why are we so stuck with it? Why when you mention diversity, or one of it’s many derivatives (diversity management, embracing diversity, etc), is the response akin to talking about abortion or the death sentence in a room full of right wing conservatives?

Diversity as such is not difficult. Diversity emerges from any point in which we differ. Any point really. I differ with people on a daily basis. My day just wouldn’t be my day if there were no differing. In fact the world wouldn’t be the world if there was no differing. Like and dislikes. Skills and knowledge. Sickness and health. These differences lead people to different responses, which leads to the development of different products. Air conditioning, motorcars, space travel, TV, brick homes, mobile phones, supermarkets, malls, cricket, soccer, Pink Floyd, and the list goes on and on. I’m prepared to bet my colleague’s January wages that differing is responsible for all of that and much, much more.

So why all the fuss around diversity? I still don’t get it. But maybe I’m not supposed to get it? Maybe I’m a little too young, or just not old enough to get it? I say that because sometime in the last 50 years things started changing. Sure change has been with us since we discovered fire, but back then change took a long time to do its thing. Sometimes it took so long people didn’t even see it, or feel its consequences. But then change started changing. It got faster, and bigger, and soon my parents and their parents were so overwhelmed by change they didn’t know what to do with them.

So they did what most people do when things get tough and change asks you to change. They hankered after the past. They wished things could be the way they’d always been. They longed for harmony. Yes harmony. That was the world in which they’d grown up in (you’re right, there were two world wars, but the emphasis after each war was on recreating harmony – think League of Nations and United Nations). Theirs was a world in which harmony was a much sought after outcome. They hired the same colour people, from similar cultures, with similar religious beliefs, who were mostly the same gender, and lived in the same area, wore the same suits and ties, drove similar cars to similar office blocks, and lived similar lives. And when you put a group of people together who have lots in common, you often get harmony (technically it’s probably pseudo-harmony, but at least everyone knew how to make it look real).

But what to do with the diversity? It was a problem, because governments got involved. And government wouldn’t let my parents and their parents ‘do’ harmony the way they used to. They now had a new goal to work towards – to be inclusive. This was supposed to be a new way to bring harmony to the world. A way they’d never had to do it before… with different people. People who differed. On a daily basis. And so they were forced to embrace diversity. They were told to let women in. And blacks. And foreigners. And the disabled. And they weren’t allowed to comment on disabilities. Or religious beliefs or habits. They were told it was all a good thing. And they were told it was going to be great. That this is what it was supposed to be like. But someone forgot to tell them that they may as well kiss harmony goodbye, ‘cos it was never, ever, coming back. Well not like they were used to.

And that’s why people younger than 35 don’t get it. That’s why diversity got such a bad reputation. Because this entire time people have been engaging with diversity in order to reach harmony. And nobody told them that harmony don’t live here anymore.

That’s not a bad thing. No it’s not bad at all. In fact it’s a great thing, because what diversity did bring was creativity. That’s the outcome of diversity. Take a whole group of different people. Different in lots of ways. Take different gender, colour, culture, sexual orientation, age, wealth and more, and put them in a room together. Sure there’ll be a whole lot of differing, but there’s also going to be a whole lot of creativity as well.

And so we’re left with two problems. The first one I’ve mentioned above. Most people think the outcome of diversity is harmony. Actually, the outcome is creativity (or total chaos, if not managed properly). And when they don’t get harmony, they need to blame someone. So they blame the people who are different from them. That’s no good, because the whole room is blaming everyone else as soon as the first person starts the blaming game.

The second problem, which leads on from the first problem, is that because we keep thinking we’re failing, our blaming has caused us to stop doing the basics of respect, dignity, trust, community. Without these, no group can ever function successfully.

To solve these two problems we need to change people’s minds about diversity, harmony and creativity. Harmony is a characteristic that died with the Model T Ford. It must be replaced with dignity, trust, respect and community. Diversity is part of our new world. We cannot get rid of it, or wish it away. But, if we understand this, it can result in creativity like nothing the world has ever seen. We live in exciting times. We wake up each morning in a world that, while it has it’s fair share of problems, holds for each one of us an exciting journey raring to go. A journey marked by differing and creativity and innovation. For that reason, and that reason alone, we should embrace it, own it, and dare to be different!

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3. Top Ten Current "Return On Total Rewards" Themes

By Mercer Consulting who can be contacted at

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During the summer of 2004, Mercer conducted its third Measuring the Return on Total Rewards SnapShot survey to learn what organizations are doing to:

(a) Improve business performance by better aligning reward strategy with business objectives, and

(b) Measure their ROI in pay, benefits, and career programs.

This survey gives a snapshot of how companies are faring, given the economic downturn and long-awaited recovery, ever-increasing benefits costs, and changes to equity programs. Overall, 198 firms across all industries participated in the 2004 survey.

Ten key themes emerged from this survey:

1. PRIORITIES OVER THE NEXT 12 MONTHS ARE ATTRACTING/ RETAINING THE "RIGHT" TALENT, CONTROLLING INCREASING BENEFIT COSTS, EFFECTIVELY DIFFERENTIATING PAY, AND ENSURING PAY FOR PERFORMANCE. These themes continue to be top challenges as HR juggles the rewards demands of affordability and long-term sustainability with the need to retain top performers and critical skills that drive productivity and results.

2. MORE COMPANIES REPORT THEY ARE CURRENTLY "BUILDING" FUTURE TALENT FROM WITHIN RATHER THAN "BUYING" EXTERNALLY. But as the economy rebounds and companies need to fill voids in changing or highly specialized knowledge and skill sets, more companies this year predicted they would buy talent in the future over last year. This trend is most pronounced in the financial services and health care industries and among privately held firms.

3. CULTIVATING TALENT FROM WITHIN REMAINS A PRIMARY EMPHASIS. Training and career development is being used today as a reward strategy to retain top talent, drive business growth, and reduce hiring budgets. Many firms believe the commitment and institutional knowledge of "home grown" talent will help sustain future success.

4. ALMOST HALF THE FIRMS IN THIS STUDY DEFINE REWARDS HOLISTICALLY. Twenty- two percent define rewards as pay, benefits and careers, and another 23% also include intrinsic work factors such as the work environment, work processes, and work/ life balance.

5. THE TOP THREE AREAS WHERE FIRMS EXPECT TO INCREASE REWARD INVESTMENTS ARE: (1) TRAINING /CAREER DEVELOPMENT, (2) NON-CASH RECOGNITION AND (3) ANNUAL CASH INCENTIVES. This is consistent with priorities around attraction/ retention, reward differentiation, pay-for-performance, and cultivating talent internally.

6. APPROXIMATELY ONE- QUARTER OF FIRMS EXPECT TO REDUCE INVESTMENTS IN LONG- TERM INCENTIVES. This is consistent with trends to reduce stock option participation and award magnitude in light of the impending accounting changes and concerns about the effect of options on shareholders (for example, dilution and burn rate).

7. AS COMPANIES CONSIDER THE REMAINDER OF 2004, MIXED OPTIMISM PREVAILS: One-third of firms are preparing for revenue growth, but 40% are still responding to the economic downturn. While economic optimism is in the air, we’re still in the throes of a cautious market environment, with many firms seeking ways to manage costs amidst hiring, rewarding, and motivating star talent. Segments most optimistic are larger firms (for example, those with over 10,000 employee) and companies in the chemicals/ pharmaceuticals/ biotech, financial services, professional services, retail/ wholesale, and technology/ computers industries.

8. WHILE EXTERNAL BENCHMARKING AND BEST PRACTICES CONTINUE AS PRIMARY INPUTS FOR REWARD ALLOCATION DECISIONS, SOME FIRMS ALSO LOOK INTERNALLY TO HELP MAP THEIR REWARD STRATEGIES. The combination of external/ best practices benchmarking with internal workforce analytics provides the richest vantage point from which to make reward decisions. Using what works in another company may or may not work, but learning from peer firms combined with understanding internal workforce can have a

significant positive impact.

9. FINANCIAL CRITERIA (REVENUE, PROFITS, RETURNS) ARE PRIMARY MEASURES USED TO GAUGE EFFECTIVENESS OF REWARD INVESTMENTS. Customer measures (customer satisfaction or market share) and internal process measures (productivity or quality) are often an important #2 or #3 measure. Employee measures (satisfaction, retention) are also used, but typically hold less importance.

10. MANAGEMENT OF COMPENSATION GUIDELINES VARIES BY EMPLOYEE GROUP. About half of larger firms and firms with substantial international operations have a global compensation strategy, which almost universally affects executives and managers. Non- management employees are affected by a global strategy less frequently. Executive rewards are typically managed globally, out of corporate headquarters. For other employee groups, there is greater trend to manage rewards locally at the region, business unit or country level, particularly among the larger firms.

*Reprinted by permission

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4. Dangerous Ideas: Understanding The Dangers Of Self-Fulfilling Theories

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There was an important article by Fabrizio Ferraro of the IESE Business School, and

Jeff Pfeffer and Bob Sutton from Stanford in the January, Academy of Management Review.

Ferraro argues that management theories can become self-fulfilling, so that even if they were not true to begin with they become true. One example Ferraro cites is the economic theory that people only act to further their own self-interest, never acting for the group or broader society. I've read management articles which quite "innocently" state something like "…when organizations change, employees only have one question: what's in it for me?" This is not true. When confronted with change people may think about its impact on the firm, the customers, their family, their co-workers, the poor, society at large, or the next generation. However, the assumption that people only care about themselves is not presented as a point to be debated; it is simply assumed to be true and the article goes on from there to talk about managing change. Over time these hidden assumptions seep into the reader's way of thinking. This is where it becomes insidious; once people begin believing the self-interest theory, they actually become selfish. What was not true has become so.

Studies have shown that economics graduates (who are trained that self-interest is the only motivation) are far more likely to cheat their group in an exercise than any other group of subjects (economists contributed only about 20 percent of their resources to the group, compared to the 42 percent contributed by non-economists). It would never occur to economic professors that their theories transform average people into less ethical ones, but that is what happens.

Another potentially dangerous assumption is that in any firm there are A, B and C players (excellent, good, and poor). I have even used that language myself. But as soon as you assume 10 percent of employees are C players then it becomes natural to conclude they should be fired and replaced with A players. It's also natural to think that the elite A players should be given special status. This kind of thinking risks turning a friendly, team-oriented workplace into one full of fear and distrust.

Of course, it is true that organizations have to understand the differing performance levels of employees. However, that is different from assuming that people can be definitively sorted into categories—which most research shows is not valid. Traditional performance appraisal also grades people, but it is based on quite a different theory. In performance appraisal language an employee had a poor year, in the new language an employee is labelled a C and is on the edge of termination.

An alternative worldview is that there is a team and everyone on the team tries to contribute, sure some people will be better at some things, some times but not in such a dramatic way that we would label some people A's and other C's. Sometimes you will hear a CEO say, "We're just not going to go down that route." The CEO recognizes that it doesn't pay to get into a discussion of A, B, and C's, the language is damaging in and of itself.

There are a number of hidden ideas in US management theory that may be dangerous. Many of these derive from economics and revolve around the idea that it's a dog-eat-dog, survival of the toughest, winner-take-all, greed is good kind of world. Those assumptions show up in all kinds of management articles. If we adopt the language of those articles then those theories can become self-fulfilling.

Understanding the dangers of self-fulfilling theories is of particular importance to managers outside of the United States. Managers around the world read American business literature in a desire to pick up best practices. In doing so they can inadvertently pick up the equivalent of a virus that can damage their organizations and their countries.

It's hard to expect the average manager to read business articles and dig out the assumptions hidden in what looks like everyday language. So the duty falls on thinkers and intellectuals in each country to alert managers to the dangers hidden in these ideas. Maybe you are one of those intellectuals. I presume that intellectuals will help, not out of self-interest, but because they want to create a better world for their fellow citizens and for future generations.

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5. The Power of Your Thoughts*

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Thought: The process of thinking, serious consideration, reasoning power, opinion and belief.

So what are your thoughts saying to you?

I dare suggest that almost everything each of us has or has not accomplished is a result of our thinking.

>> Our thoughts are the starting place of our action or inaction.

>> Our thoughts are the beginning of our results and success.

In the past couple of months, my schedule has been extremely busy, with several writing projects, training events, travel, my company operations, my school board responsibilities, and my family, too. I could tell that the pace—fast and faster—was starting to lower my energy levels, which in turn was causing my thoughts to become less positive and results-orientated than normal.

I was surprised at the way my thoughts shifted from my usual approach of working to achieve my goals to: Wow! This is a lot of work! Will we ever get it done?!

My overall circumstances had not changed nor had my capabilities. Only my thought process had changed. Our thoughts really do create our reality and end up producing our level of success.

Your thoughts literally convert into energy in your physical mind and body. If you doubt that, what do you think a polygraph is measuring? It shows your internal response (energy) to specific questions. This same thought energy that a polygraph can measure is also creating your personal success blueprint.

How do you frame failure and success? Most of our thought patterns have simply become habitual and many of them are destructive. This was proved in a 25-year research study conducted by Dr. Martin Seligman and documented in his book, Learned Optimism. His research proved that the way we think about our failures and our successes directly impacts our future achievement levels.

The Crime Scene Investigation (CSI) TV series is one of the most popular. Why? Individuals seem to be intrigued by the process and science of discovery and investigation. So put on your CSI hat and let’s investigate your thought and language patterns and let’s we can crack your case.

The research revealed that the way you think about your wins and positive events and about your loses and negative events are equally important. Life is not just about overcoming fai lure. Do you own and take credit for your wins?

To break the bondage of our habits, first we need to become aware of how our thoughts and our language can and are hindering our success. Three key concepts apply to two focus points (positive and negative) to make up our investigation grid.

Time (permanence): Do you see the situation as temporary or is this going to be a permanent thing from now on?

Limits (pervasiveness): Is this just a specific event or does it affect everything in your life universally?

Who (personalization): Do you blame yourself and/or give credit to others and do you take credit for wins?

The three key thought elements permanence, pervasiveness, and personalization apply in opposite ways, depending on whether the event is positive or negative.

I will outline the research to enable you to determine if you have success or failure blueprint/thought patterns.

# Positive-Event Success Thinking

When a positive event occurs, the most successful individuals respond and think in this way.

1. They believe this success is ongoing, not a random or freak event.

2. Their success also applies to all other areas of their life, not just this specific event.

3. They personally take credit for the results or positive outcome.

Example: A sales rep has a record month, with double her normal sales. Which response matches someone who is thinking like a successful individual?

a. This is my lucky month. It is fortunate I was knowledgeable with the customers who came in. If it weren’t for my manager, I never would have put this kind of month together.

b. I’m sure glad the company put on that promotion; it certainly helped me this month. If they continue the program, I might be able to do this two months is a row.

c. You can see how all my hard work is paying off dividends. I expect this trend to continue as I maintain this amount of effort in future.

In training sessions, I have had individuals state they were simply telling the truth when they answered a, or b. But, of course, most successful individuals responded with c. They took credit for the win and expected their success to continue, no matter what.

Martin’s research confirmed those responses.

How would you normally respond to success?

# Negative-Event Success Thinking

When a negative event occurs, the most successful individuals think and respond in this way.

1. They believe the failure (negative event) is temporary and will pass.

2. They frame the negative situation as limited to that specific event.

3. They don’t blame themselves for the failure and feel the outcome of the event was out of their control. (Caution: this way of responding should be limited to events that are not harmful to others. There are situations where you MUST be accountable for your actions, such as lying or causing an accident.)

Example: A manager has had three new hires quit this month. Which response matches someone who is thinking like a successful individual?

a. There are no good employees available in the marketplace. It seems every time I hire someone, I get the wrong person. I must be doing something wrong.

b. It is unfortunate that the last three hires have not worked out. This is a short-term challenge, until we can attract better applicants. It is regrettable that those individuals did not have what it takes.

c. There are a lot of good candidates out there, if we look in the right places. We have survived in the past and we will in the future. I do take responsibility for the poor performance of the new hires.

The statement chosen by the person who thinks like a successful individual is b.

Obviously much more research can be covered, but that will get you started. The way you respond to both positive and negative events HIGHLY influences your levels of success. In many cases, your thoughts especially in business, sales, and people-driven responsibilities are much more important than your IQ, intelligence, or competency level.

It is clear that confidence and/or your Self-Worth levels are critical to your overall success. The way you think and feel about events is the starting point of almost all your results. To assist you in confirming your confidence levels, consider completing our online Self-Worth Inventory. This assessment will enable you to identify the areas where you have already high self-worth and where you could improve.

You are your thoughts, so why not make sure your thoughts are benefiting you?

Action Steps

1. Do you acknowledge that your thoughts highly influence your results?

2. If you want to change your results, you need to change your thinking.

3. Do you want different results than you are getting now? If Yes, what?

4. Your success is influenced equally by the way you think about positive and negative events.

5. How do you respond to positive events?

6. Successful individuals feel positive events are permanent and universal (that it applies to their whole life) and that they have personally contributed to the success. For less successful individuals, the opposite is true: They feel the success is short-lived, specific to that event, and they had little to do with it.

7. How do you respond to negative events?

8. Successful individuals feel a negative event is temporary, specific to that event and that external factors caused it. Pessimistic individuals feel the negative event is permanent, universal, and internal or their fault.

9. Using this framework, start paying close attention to your thoughts toward both negative and positive events. Think about how you might change/improve your response level.

10. Give the new attitude time to settle because, for many people, this new approach to thinking means unlearning a lifetime of negative programming.

11. If you beat yourself up over not learning this new way fast enough, you have just been negative!

12. This is a very powerful process. I encourage you to stay the course. It is worth it!

*Reprinted by permission

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6. Downloads: Census 2004 South African Women In Corporate Leadership

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The results of the first study of a nationwide census of woman board directors for all companies listed on the JSE Securities Exchange (JSE) as well as 17 of South Africa's largest state-owned enterprises (SOEs) is presented in this report. The research has specifically been timed to coincide with the anniversary of our country's first 10 years of democracy and the 25th anniversary of the Businesswomen's Association (BWA) Businesswoman of the Year Award. Both of these milestone events give us good reasons to measure and reflect on where South African corporations are, with regards to the promotion of women in their ranks. Our country is already a leading light in the promotion and development of women leaders and it is important to see what progress has been made to stimulate the ongoing development of all of South Africa's women.

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7. An Entrepreneur's Journey in Africa*

By Cynthia Churchwell who can be contacted at http://hbswk.hbs.edu/

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When Liberia-born Monique Maddy (HBS MBA '93) started Adesemi to offer users throughout Africa a wireless system of pagers and public pay phones, she believed that tremendous pent-up demand would launch her company to success. But in fact, the company eventually had to be liquidated, a casualty not only of internal miscalculations but also of the bureaucracy, corruption, and environmental factors faced by start-ups in Africa and other developing countries.

But not all was lost. Maddy told her story in the memoir Learning to Love Africa: My Journey from Africa to Harvard Business School and Back, published earlier this year. And now she is working with global corporations to overcome the environmental obstacles she faced and to create a business development that will bring a wide range of consumer products and services to middle and lower income segments of the African population.

From her Cambridge, MA, home, Maddy shares her thoughts via e-mail about bureaucracies, challenges, and opportunities presented by Africa.

Cynthia Churchwell: How did you learn to love Africa? Did you not love it in the beginning?

Monique Maddy: I have certainly loved Africa since the very beginning, so what the title of my book is really meant to convey is that I grew to appreciate Africa more, after viewing it through eyes, and as a professional, trying to help the continent achieve economic development. In the process, I have come to realize and better appreciate that the African people face overwhelming odds, sometimes brought about by natural disasters, but more often than not, by failures of their own governments and other ostensible agents of economic progress.

The fact that they persevere, in the face of such overwhelming odds, and with such dignity, is indeed a feat to be admired, particularly for those like me who are fortunate to live in a country where so many of the advantages that we have to improve our lot in life—education, healthcare, political stability—are so often taken for granted. I also have grown to admire the civility of the African people, especially how they care for and about one another, their resilience, and their eternal optimism. All of these traits as well as the continent's physical beauty make Africa irresistible.

Q: WHAT PROMPTED YOU TO WRITE ABOUT YOUR ENTREPRENEURIAL EXPERIENCES AND WHAT CAN MANAGERS AND OTHER BUSINESS PROFESSIONALS LEARN FROM YOUR STORY?

A: I wrote about my entrepreneurial experience in part because I found it therapeutic. When one goes through seven years from a start-up to a growing company, there are a lot of enlightening experiences that one does not really have time to reflect upon and to learn from because everything moves so quickly. In assessing what happened to Adesemi, I realized that there were many valuable lessons to be learned, both from things that went well and those that didn't turn out as hoped. Even today, four years after we liquidated the company, I am still learning and applying those lessons to my current undertakings.

Furthermore, I have always found it to be immensely instructive and rewarding to learn from other people's successes and failures, which is why I felt that those planning to travel along a similar entrepreneurial path, whether in a developing country or a developed one, would find a lot of valuable insights by reading my story. It is as much a universal entrepreneurial story as it is an African entrepreneurial story.

I think that the most important lesson that other business professionals can learn from my experience is the importance of persistence and perseverance to the success of a business or any major undertaking, even in the face of overwhelming odds and countless naysayers. There were many times when it would have just been easy for my management team and me to throw in the towel, but we learned that by simply hanging on for another day we could often change things dramatically, often for the better. Such is the nature of a start-up, no matter how much one plans. These twists and turns and wild fluctuations are also a part of what makes the entire experience so exciting.

Q: KNOWING FIRST HAND ABOUT VOLATILE ENVIRONMENTS IN AFRICAN COUNTRIES, WHY DID YOU DECIDE TO PURSUE OPERATIONS IN TANZANIA?

A: Well, actually, Tanzania was and still is one of the most stable countries in all of Africa. This was a major factor in its selection as our first country of operations. Moreover, we needed to identify a country with a tremendous market need for telecommunications services. Tanzania, with about 26 million people at the time, had fewer than 100,000 phones, with long waiting lists for phones to be installed. The government's telecommunications company, the monopoly operator at the time, could not keep up with the demand; hence we knew that there was an immediate need for what we had to offer: reliable and affordable telecommunications services.

Q: YOU ENCOUNTERED VARIOUS MANAGEMENT ISSUES EARLY ON SUCH AS LIMITED RESOURCES AND LOW MORALE. HOW WOULD YOU COACH OTHERS IN SIMILAR SITUATIONS WHO ARE NEW TO MANAGEMENT?

A: First of all I would tell those who go to business school to listen when the professor tells them that human resource management will be the most challenging aspect of managing a business. Even though we were dealing with new and relatively complex technologies in a developing market, the technical challenges paled in comparison to the personnel issues that we had to contend with.

We learned that by simply hanging on for another day we could often change things dramatically. In a start-up, especially where financial resources are limited, there is not much room for error and hiring mistakes can be the most costly. Every new hire can affect in a positive or negative way the entire dynamic of the team. Therefore, it is extremely crucial that those people brought into the company early on not only have technical and business skills, but people skills as well, and the temperament to deal with the extreme uncertainty of a start-up. It is not a path for everyone, and it is also a factor of where one is in one's life. Some of the people that we initially hired would have been perfect in a big company environment, where their jobs were clearly defined and predictability was the rule rather than the exception. Unfortunately for them and for us, in a start-up environment it is "all hands on deck," and often the chef has to be ready to temporarily take over the duties of the captain if that is what it takes to keep the ship afloat. Likewise, the captain has to be ready to roll up his or her sleeves and become the chef, if that is what is necessary.

We had the additional challenge of dealing with a very international workforce. Each nationality brought his or her preconceived notions of what it should be like to be managed. Not everyone is in favor of inclusion when it comes to decision making. Some people just want to be told what to do because they are looking to you, as the manager, for guidance and they expect you, as the president of the company, to know what is best. It is more of a parental relationship. If the parents look lost or ask the children what to do, there is confusion and uncertainty. A good manager has to understand these and other cultural nuances, and make the necessary adjustments in his or her management style.

Q: YOU DESCRIBE THE INEFFECTIVENESS OF ORGANIZATIONS SUCH AS THE WORLD BANK AND THE UNITED NATIONS. DO YOU RECOMMEND ANY STRATEGIES FOR COMPANIES TO NAVIGATE GOVERNMENTAL AND NONGOVERNMENTAL BUREAUCRACIES?

A: When working in developing countries, particularly in Africa, it is very difficult to avoid government and nongovernmental bureaucracies. Unfortunately, and despite heaps of evidence, many of them still do not understand that the private sector, not public bureaucracy, is the engine of economic growth.

I would advise any private company working with these agencies to limit their engagement with bureaucracies to only that which is absolutely essential. Governments should be concerned with creating the type of investment climate (rule of law, healthy and well-educated people, good physical infrastructure, favorable tax structure, respect for private property, and so on), that leads to private investment. Organizations such as the World Bank and the United Nations should limit their activities to assisting governments in this area, rather than attempt to become economic players themselves. When they do intervene in the economy as players, all they really succeed in doing is "crowding out" other, more efficient and more qualified investors and economic agents.

Q: WHAT DO YOU SEE AS THE GREATEST CHALLENGES MANAGERS FACE IN PURSUING BUSINESS VENTURES IN DEVELOPING ECONOMIES, IN PARTICULAR, AFRICA?

A: The biggest challenges are the deficiencies in the economic or competitive context. Businesses prefer to invest in countries where factor conditions (i.e., human resources, capital resources, physical resources, administrative, information, and scientific and technological infrastructure) are reliable, the legal elements (i.e., rule of law, property protection, open competition, absence of corruption) are in place and enforced, and there are related and supporting industries (i.e., potential suppliers of inputs to their products and services). The lack of all or any of these creates a huge disincentive to private investment. In developed economies, all of these factors are typically present, as well as the demand conditions (i.e., the market), so the best companies, or those best capable of meeting customer needs, will thrive and others will be weeded out through the competitive process. In developing countries, by contrast, often there are many distortions and deliberate government interventions interfering with the market or competitive process essential to capitalism. Unfortunately, under these circumstances it is not so much the companies that know "how" that survive, but those that know "who."

Q: WHAT STRUCTURAL CHANGES DO YOU THINK WOULD HAVE THE MOST IMPACT IN ELIMINATING THESE OBSTACLES?

A: The adoption and enforcement of the right regulatory reforms and investment policies can go a long way towards improving the investment climate in developing countries. There are successful examples all over the world that have proven this already, and the most successful cases have been in countries where democracy prevails and governments can be voted in and out, based on performance.

In Africa there are encouraging signs that African governments are ready to take action in this area. A case in point is the New Partnership for Africa's Development (NEPAD), launched by a number of African Heads of State in 2001. NEPAD is a commitment by Africa's most forward-looking leaders to the African people and the international community to put Africa on an irreversible path of sustainable growth through a combination of good economic, political, and corporate governance.

Q: WHAT DO YOU THINK ARE THE GREATEST OPPORTUNITIES THAT FIRMS HAVE TO ENTER MARKETS IN AFRICA AND AFFECT POSITIVE CHANGE?

A: I believe that there is a lot of potential for companies to make money by serving those customers at the bottom of the economic pyramid. By this, I mean the hundreds of millions of people in Africa and throughout the developing world who live on less than two dollars per day. These people have basic consumer needs and collectively they have a tremendous amount of disposable income. Those companies that can find the means to service these markets in innovative and profitable ways will not only have the opportunity to make money for their shareholders, but they will also be in a position to help these consumers move up the economic pyramid, expanding further the market for their products and services.

For a long time it has been my contention that global corporations and very poor consumers have far more in common than the latter and development aid agencies. This is because global corporations have a vested interest in their consumers becoming wealthier so that their purchasing power and market sophistication is increased. By contrast, such a trend on a worldwide scale signals the demise of the global aid business as we know it.

The technical challenges paled in comparison to the personnel issues.

For this to work, however, requires good governance as well as good policies. My company, Adesemi, was targeting this lower income market segment and demand for its telecommunications services was tremendous; however, the Tanzanian government's policies toward Adesemi and other private investors were not favorable. As a result, we could not see the economic justification, nor the value of expanding the company's operations across the country.

Finally, African governments must encourage entrepreneurship and bring it out of the official economic market into the mainstream. It is private businesses, both local and foreign, that generate the jobs that will lead to higher standards of living in these markets. Foreign corporations that partner with local entrepreneurs to extend their market penetration are best positioned to take advantage of such reforms.

Q: TELL US ABOUT A FEW OF YOUR BIGGEST SURPRISES, DISAPPOINTMENTS, AND LESSONS.

A: My biggest surprise was learning that having a captive market for one's products and services is not enough if the other factors of the economic context are not present. In business school, we take a number of factors for granted, including the rule of law, the efficiency of the market, and the physical and institutional infrastructure that makes capitalism function smoothly. In launching a start-up in a developing country, I learned, much to my surprise, that no matter how much pent-up demand there is for a particular product or service, if the conditions to invest are not favorable, those products and services will not be able to reach the consumer, or if they do, the cost of getting it to them are too prohibitive and risky, no matter how high their willingness to pay.

Realizing that the technology exists to conquer many of the Third World's problems, but that the infrastructure and policy framework for resolving them are often lacking, is a particularly disappointing finding, especially in the twenty-first century. The cost in terms of missed opportunities and, in the worst cases, extreme human suffering, is prohibitive. Therefore, one major lesson that I have learned is to only target those markets where governments have made a serious commitment to uphold the rule of law, to ensure fair and honest competition, and to invest in their people (e.g., health and education) to create an attractive workforce.

# Learning to Love Africa: My Journey from Africa to Harvard Business School and Back

By Monique Maddy, HarperCollins Publishers, 2004

Upon graduating from Harvard Business School, Maddy, born in Liberia and educated in Britain and the U.S., relocates to Tanzania to execute a start-up business providing telephone service. With the excitement attendant to starting a new company and the soul-searching of a young woman on a mission, Maddy brings personal experience and a different perspective on the troubled history of conquest and colonization of Africa, including the resettlement of American slaves in Liberia. Having worked for the United Nations, Maddy also brings a perspective on capitalism versus the benevolent efforts of world organizations. She contrasts their ineffectiveness with the entrepreneurial heritage of the Mandingo, who have an extensive network of trade and finance throughout Africa, as well as her father¹s business enterprises and the foreign investment of Firestone and other companies in small, isolated towns that stand in stark contrast to the chaos of the surrounding country. Maddy is ultimately disappointed when her enterprise fails due to local corruption, ineptitude, and bureaucracy, and she struggles to maintain her vision for self-reliance and entrepreneurialism in Africa.

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