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Fast Fact: Companies should not expect to take price increases without losing volume and potentially risking profitability

Fast Fact: Companies should not expect to take price increases without losing volume and potentially risking profitability

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Quote: Theodore Isaac Rubin

“Happiness does not come from doing easy work but from the afterglow of satisfaction that comes after the achievement of a difficult task that demanded our best.” –  Theodore Isaac Rubin

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Quote: Anne Mulcahy

I am still learning. That is an important mark of a good leader … to know you don’t know it all and never will – Anne Mulcahy, former Xerox CEO

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Tell The Truth Even With Bad News

By Steve Watkins

Tell The Truth Even With Bad News

Honesty concept

TypoArt BS/Shutterstock

Honesty really is the best policy

It’s easy to say it’s always best to be honest. But sometimes it takes guts to be a straight shooter with someone and to show you’re vulnerable.

Here’s how to gather that fortitude to effectively lead your group.

Tell the truth.

Start with the basics. Honesty really is the best policy, even if it’s easier to tell a white lie than to confront someone with the bad news that they’re not performing well enough.

“If you’re not honest, sooner or later it will catch up with you and then it interferes with building trust,” said Linda Finkle, founder and CEO of Washington, D.C.-based business coaching and consulting firm Incedo Group.

Admit mistakes.

Famed investor Warren Buffett wins trust because he’s open about his missteps, says Constance Dierickx, Atlanta-based advisor to boards and senior executives and author of “High-Stakes Leadership.” Each year, Buffett summarizes where he and his firm went wrong with their investments. Dierickx at times calls back clients a day or two after giving them advice and tells them after thinking about it further she has a different recommendation.

“People will know you’re honest and they can trust you,” Dierickx told IBD.

Help others. 

Finkle once had to let someone go for performance reasons. Years later the woman thanked Finkle, saying it showed her where she needed to improve.

“If our goal as a leader is to be in service to people, then it’s important to tell the truth, whether it’s something the person wants to hear or not,” Finkle said.

Seek support.

When you’re breaking bad news to people, you have to muster the guts to tell them. But don’t feel as if you have to go it alone. Dierickx says she’ll often advise clients to go public about a problem even if their lawyers tell them to do the opposite. They’re usually better off being open about it. Home Depot  CEO Frank Blake was upfront in 2014 when a data breach exposed more than 50 million payment cards. He admitted the problem, said customers wouldn’t be harmed, devoted resources to the matter and published a letter of apology.

“Companies have to protect their image, but it has to be subordinate to being honest,” Dierickx said.

Develop fortitude. 

Dierickx says you can build up your ability to steel yourself and deliver bad news. She views it as a combination of vision and mission to show your belief in what you’re doing. Toss in persistence, and the combination will get you to face the toughest conversations. Your character is the great multiplier.

“If you don’t have character, the other stuff doesn’t make any difference,” Dierickx said.

Get advice. 

Some people don’t know how to have brutally honest conversations. Ask others how to handle it.

“It doesn’t make you less of a leader because you need to ask for help,” Finkle said. “Even Olympic athletes have coaches.”

Be open. 

If you’re uncomfortable with the discussion, tell the person you’re talking to that you might not be the best at this. Then work your way through it. It’ll get easier.

“Talk about it in a way that’s not self-deprecating, but is aimed at, ‘How can I get better?’ ” Finkle said.

Keep improving. 

Others will trust you if you don’t appear to be a know-it-all. Show people you’re always learning. Dierickx once worked at a company that had a “belly flop” award. People talked in a meeting about something that went off the rails and what they learned from it.

“I have more credibility if I show that I’m learning,” Dierickx said.

Stay true to yourself. 

The key to breaking bad news is to be genuine, Finkle says. If the company has to lay off a batch of people, admit it’s painful rather than putting up a false front.

“People respond to genuine humanness,” Finkle said. “If you’re not yourself, people respond to that more negatively than anything.”

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Staples of bread and meat dominate consumer expenditure on food in South Africa

Staples of bread and meat dominate consumer expenditure on food in South Africa

Staples of bread and meat dominate consumer expenditure on food in South Africa

Expenditure on food, beverage and tobacco accounted for 13,9% of total consumption expenditure in South Africa

There are significant differences between population groups and their expenditure on food as a percent of total expenditure:

  • Black African households spend 19,9%
  • Coloured households spend 18,6%
  • Indian/Asian households spend 7,4%
  • White households spend 7,2%

Bread, buns and rolls are the primary driver of traffic for food retailers

Although the percentage of total consumption differs amongst population groups and amongst income deciles, the staples in the consumer basket remain consistent

Consumer goods producers might benefit from focusing on staples and providing a range of products that meet the taste and budget for each population and income group

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How self-aware are you – poll results

Thank you for participating in our self awareness poll.

Our results closely match the results detailed in Tasha Eurich’s book, “Insight,” where 95% of people rate themselves self-aware but just 10 to 15% are.

See the full results here.

While visitors to the Global Advisors’ website might be more self-aware than the general population, 70% rated themselves that way!

Now read So You Think You’re Self Aware?

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There is a positive relationship between long production run sizes and OEE

Capture

  • Evidence suggests that longer run sizes lead to increased overall equipment effectiveness (OEE).
  • OEE is a measure of how effectively manufacturing equipment is utilised and is defined as a product of machine availability, machine performance and product quality.
  • Increasing run sizes improves availability as a result of less change over time, and performance as a result of less operator inefficiency.
  • North America facilities that previously ran at world-class OEE rates, have experienced lower OEE rates due to a move towards reduced lot sizes and shifting large volume production overseas1.
    • Shorter run sizes resulted in increased changeover frequency which led to increased planned downtime and reduced asset utilization.
    • As a result OEE rates dropped from 85% to as low as 50%1.
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South African retailers have maintained flat margins on lamb and seen declining margins on beef

South African retailers have maintained flat margins on lamb and seen declining margins on beef

  • Beef producers’ share of retail prices has increased from 43% to 45% from 2000 to 2013 while lamb producers’ share has decreased from 55% to 53%
  • Lamb prices have escalated above other meat prices as producers have passed on supplier increases
    • Retailers have been unwilling to cushion these increases
  • Retailers have cushioned an increase in beef producer prices and taken smaller margins
    • Retail prices of beef have risen at a slower rate than producer prices
  • Beef consumption is growing with the rise of the middle class while lamb consumption is declining
  • Demand for beef is higher than lamb due to affordability
    • Retailers are willing to take less margin on beef in order to maintain foot traffic through their stores
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While African insurance premiums have been growing they have not kept up with GDP growth

While African insurance premiums have been growing they have not kept up with GDP growth

The African insurance industry is predominantly group life insurance business, and due to limited spending power there has been much slower uptake of individual insurance policies.
Poverty has been reduced somewhat in Africa but this is primarily in the lowest income bracket of the middle class who are prone to falling back into poverty.
Furthermore, policyholders are typically unaware or sceptical of the benefits of owning insurance products, they are difficult to reach and often do not earn regular incomes.1
Microinsurance products are growing more quickly – this presents an opportunity for targetting lower income groups.

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3,6% of South African retirement funds make up 80% of total value

3,6% of South African retirement funds make up 80% of total value

The South African retirement industry is highly concentrated with 80% of the total fund value being held by less than 4% of registered retirement funds.

Of these approximately 3000 are active, most of which are small – 70% of funds have assets of less than R6m.

Membership in the system is voluntary, with only around half of formally-employed workers participating, and balances are low, partly because few members preserve their funds for retirement.

There has been a substantial move to umbrella funds due to the focus on retirement fund costs and the audit requirements of underwritten funds.

Underwritten funds used to be exempt from submitting audited returns to the Pension Funds Registrar, as they were effectively registered by the insurance division of the FSB.

This exemption has now been revoked and so underwritten funds are also required to submit audited results which incurs significant compliance costs.

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Mining’s contribution to South Africa’s GDP has declined while financial services has increased its dominance

Mining’s contribution to South Africa’s GDP has declined while financial services has increased its dominance
Mining is the only sector to have experienced an overall decline in contribution to South Africa’s GDP since 1993 with a negative CAGR of -1,3%.
The decrease in mining’s contribution to GDP has been a result of an increase in secondary and tertiary industries as well as a continuing decline in gold – and recently platinum – production over the years.
Mining companies have faced a myriad of obstacles including inadequate transport and logistics, electricity rationing warring unions and increasing labour costs – labour costs per kilogram of gold have more than quadrupled in the last decade.2
Going forward, government efforts in developing the downstream or beneficiated minerals industry could increase mining’s indirect and thus overall contribution to GDP.
Financial services however has grown from 17% of 1993 GDP to 24% of 2012 GDP and has outstripped growth of every sector bar communication.

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Covid-19 – Johns Hopkins University

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