Wednesday, December 31, 2008

Managing Creativity

Any reasonably successful business requires tremendous amount of creativity from all stake holders. Adapt to customer requirements, present products to consumers in appealing ways, designing innovative products, optimize algorithms, streamline business processes.. the uses of creativity is never ending.

Easy to stiffle creativity. But how can one improve one's creativity and that of one's team? I find the following four factors extremely important:

Private Space - A private undisturbed space is central to get the creative juices going. I have seen programmers, working on difficult problems take their laptops to the nearest Starbucks and work from there to prevent disruptions at work. While private offices for every employees though desirable may not be feasible. In this case at lest ample number of comon private spaces where employees can work undisturbed would help.

Encouragement - Encourage members to present their ideas or views without critical comments. Ideas at birth are fragile. It is easily killed by a few well intentioned critical words from another and might reduces creativity in the future.

Value creativity - Valuing members' creativity further encourages more creativity from all. Various rewards may be offered for members who come up with innovative solutions.

Appreciate Diversity - People are diverse, in their upbringing, education, influences, belief etc. A diverse workplace encourages creativity. We should allow (as much as possible) free expression, and show mutual respect, to allow free flow of thoughts and ideas.

Performance appraisals often place a lot on an employee who works "hard" or "getting the numbers" or "meeting targets". It is surprising how creativity is rarely a significant criteria in performance appraisals.

Tuesday, December 16, 2008

Does Regulation Solve the Corporate Ills?

The media says the US banks have all gone bankrupt..

Which industry is not "bankrupt" at some point or the other ? At any time, for any industry, its health is a matter of degree. While the business is good, no one complains. Executives take more risk. Sooner or later, "business as it is done" becomes unsustainable, and the house of cards come crashing down.

Will regulation help to prevent future collapse in any industry? I do not think so. If regulation is passed to make lending standards in banks better, the collapse of the future will in all probability not come from that particular issue. But some other part of the chain becomes the next weak point. It crashes at the weakest link.

As an investor, how can one keep one's portfolio safe from volatility as much as possible, but at the same time earning a "reasonable" rate of return?

As a company executive, when does one say, enough is enough, lets scale down our appetite for risk?

All tips welcome!