1/31/2009

EXECUTION: A DISCIPLINE AND A SYSTEM

"People think of execution as the tactical side of business, something leaders delegate while they focus on the perceived "bigger" issues. This idea is completely wrong. Execution is not just tactics - it is a discipline and a system. It has to be built into a company's strategy, its goals and its culture. And the leader of the organization must be deeply engaged in it. He cannot delegate its substance. Many business leaders spend vast amounts of time learning and promulgating the latest management techniques. But their failure to understand and practice execution negates the value of almost all they learn and preach. Such leaders are building houses without foundations."

Dr. Ram Charan: Corporate Advisor

EXECUTION: A DEFINITION

Robust results originate from "the consistent practice of the discipline of execution: understanding how to link together people, strategy and operations, the three core processs of every business."

Larry Bossidy CEO AlliedSignal

1/23/2009

THE 200,000,000 GLOBAL EXPATS CASE FOR THE BANKS

Around the globe, 200 million people now live and work outside their homeland. From maids to middle managers to multi-millionaire investor­immigrants, they all need financial services that cater to their footing in two worlds. It's a new era of global personal finance - with Canada, a nation of immigrants, front and centre.

First-time expats ­an executive with a big consumer goods company, say - can suddenly find they have
more disposable income than they're used to. That makes them good customers. The banks help out with cash and wealth-management services, and get their hands on more deposits and healthy fees

ON A SUNDAY MORNING in late August, the shade of the towering headquarters of the Hong Kong and Shang­hai Banking Corp. Ltd. shelters dozens of women from the Phil­ippines, Indonesia and China's poor Western provinces from the sweltering heat that hangs in Hong Kong through the summer.

A clatter of voices fills the sticky air with Tagalog, Malay and Putonghua. This city is still the hub for commerce across Asia a decade after China regained sovereignty from the British, and Sun­day is a day off for tens of thousands of foreign maids and nannies that service Hong Kong's wealthy expatriate bankers and Canton­ese merchants. On patches of roadside grass and shaded under­passes all over the city the women gather, gossiping, dancing and picnicking on food that tastes of home.

Air-conditioned malls also become clogged with the almost exclusively female foreign workers. In Worldwide Plaza - one of central Hong Kong's few downscale malls - the women crowd narrow corridors and jostle in line at the Western Union to send money to their families, before strolling for a few minutes to the 47-storey home of HSBC - a prized spot because it pumps out cold air to a large open plaza on Queens Road Central.

It's fitting that so many choose to rest here given the central role of banks like HSBC and financial services providers like Western Union in oiling the wheels of globalization, and particularly the ever-rising tide of work­ers - from domestic help to middle management employ­ees to entrepreneurs to high­powered executives - that whiz around the world for work. Today, there are about 200 million people working and living outside their home country, a figure that's ris­ing steadily. They comprise 3 % of the world's population. Together, in one place, they would be the world's fifth most populous country. And the sums of money they earn, control and routinely trans­fer is staggering. Remittances
- money sent home by family members via Western Union and myriad formal and informal op­erations - was estimated at more than $300 billion in 2007 alone.

Banking industry experts divide the migrating multitudes into three general categories: (1) temporary labourers; (2) immigrants, split into two subgroups - a wealthy elite and a moderately afflu­ent majority; and (3) middle- and upper-income executives on for­eign postings. In human terms: cleaners in Hong Kong that wire cash home to waiting families; the super-rich who roam the streets here in high-end European sports cars, citizens of the World who have private bankers that charge high fees to take care of their every whim; and bankers fleeing the tumult of Wall Street and the City of London in search of better times abroad.

Though their needs are vastly different, all 200 million migrants have key things in common: mobility, a home in another country, and a need to move their money. In less-tech-obsessed days, people commonly carried cash-stuffed envelopes in their pockets anytime they went home. Today, technology and the banking industry's rec­ognition of this massive market means that each and every migrant is a potential customer of banks and other service providers. As a country of immigrants, Canada is a prime location. And our banks are stepping up for a share. At the same time, hard data remains scarce. Fortunately, there are plenty of people to tell us the story.

IN BAGUIO CITY, a seven-hour drive into the mountains from Manila in the Philippines, the phone rings at Marcelo and Patricia Gumolda's partially completed cemen~ house. Their 31-year-old daughter, Irene, is calling from Niagara-on-the-Lake, Onto

Marcelo and Patricia receive regular remittances from their three daughters in Canada: Irene earns her money working as a nanny; Nelda, age 36, works at a printing press in St. Catharines;

Grace, 27, is in Niagara Falls where she is a nanny like Irene. The money the three send - approximately $500 a month - pays most of the expenses for their parents, their two sisters and one nephew living in the house on a steep hillside in a poor neighbourhood. "We depend on the money," says Marcelo. "I have a small pension, but it's only enough for food. We use the money from our daughters for our household, and to payfor school for the children.
Their story is a familiar one to almost every family in the Philippines. By some es­timates there are 11 million Filipinos living overseas - about 11 % of the population. They sent home US$13 billion in 2006, a figure that represents 13.5% of the national gross domestic product.
In Baguio, Marcelo's money is wired to the Western Union on busy Session Road. It is one of 320,000 Western Union locations ­that's more than the total number of outlets owned by McDonald's, Burger King, Star­bucks and Wal-Mart combined, the company boasts. Irene's money, about 3,000 pesos or $68, arrives within 15 minutes of her sending it from Canada.
India, China and Mexico all receive more remittances than the Philippines. Indeed, the World Bank says remittances can be as high as a third of GDP in some countries. In 22 countries, remittances were equal to more than 10% of Gross Domestic Product (GDP) in 2006 and in six countries they were equal to more than a fifth of GDP, according to fig­ures from the Washington, D.C.-based

Mi­gration Policy Institute.
Globally, this industry translates into hefty revenue for the wire transfer companies that charge an average fee of about 12.5% of the cash being remitted. Around the world, re­mittances to developing countries hit US$2 5 0 billion in 2007, according to the World Bank. That means global annual revenue (for all car­riers) of more than $30 billion from cash sent home to some of the world's poorest nations. Little wonder that Scotiabank set up links in the past year with Western Union and HDFC Bank of India. "This partnership provides Scotiabank customers across Canada with the ability to send money to friends and fam­ily in 220 countries," says Rania Llewellyn, vice-president of multicultural banking at Scotiabank. "For many people, this service represents an important connection with im­mediate and extended family."

IF REMITTANCES lie at one pole of the global banking trend, then the opposite extreme is the world of the private bankers.
Jessica Shi wears a stylish Bay Street suit, as she talks about her career over tea in a lofty meeting room in First Canadian Place in Toronto. Shi is a chartered financial analyst and a private banker to some of Canada's wealthiest immigrants. Originally from Shanghai. hai, Shi grew up in Guilin and went to the People's University of Beijing, then on to her first job, in risk management for Industrial and Commercial Bank of China, the country's biggest commercial lender. After moving to Canada in 2001 and completing her MBA, Shi got married and started working for BMO in Toronto, where she was recruited into the private banking group - an exclusive banking niche that involves a highly personal concierge-type ser­vice for the rich and super-rich, clients that often have US$2 mil­lion or more in liquid assets.

While the world leaders in this market have traditionally been UBS AG of Switzerland, Citigroup and Merrill Lynch - each with an estimated US$l trillion in assets under management for private clients - the whole industry has seen an increase
in demand for this type of service that often appeals to in­ternationally mobile clients like successful entrepreneurs, c-suite executives, celebrities and even sports stars. Verifiable statistics on this group are scant, but according to a recent report by Merrill Lynch and the Capgemini con-
sulting outfit, in the world last year there were 10.1 million "high-net-worth" individuals - people with at least US$l million in financial assets excluding collectibles, consum-
abies and primary residences. That's up substantially from 8.8 million in 2005.

"They're very needy for sure," says Shi of the 40% or so of her clients that are new Chinese immigrants, typically factory owners or real estate developers or mining com­pany executives and their families. "They call me day and night, asking where to live and eat, how to get a doctor, a driving license, a lawyer or an accountant. I've had to learn where all the good public and private schools are. I've had to learn to be a real estate agent, and learn about tax laws and how my clients' businesses might be taxed in China," says Shi. Some clients even want to be put in touch with a Feng Shui consultant or fortune teller.

These new immigrants often want different banking products than other customers, and are more likely to ask for a safety deposit box or for advice on buying vacation property overseas, or for low-cost, safe methods of shuf­fling cash around the world. It is lucrative, high-margin work for the banks, that also find tapping this market can lead to relationships that bring in more work for their investment banking and capital markets businesses, too.

THE SUPER-RICH are not typical among immigrants. Not surprisingly, then, bankers around the world ­nowhere more so than in Canada - spend even more time targeting the much bigger pool of immigrants of mod­est means. Royal Bank of Canada has calculated Canada's new-immigrant banking market is worth about $3 billion a year. And it's growing fast: By some estimates, there are 300,000 new arrivals each year in Canada.

It's no wonder banks covet them. While it's notoriously difficult to convince established retail customers to change their bank - because of the perception it's a hassle to re-new direct deposits, cheques and so on - a new immigrant is, al­most by definition, in the market by necessity.

The banks respond with targeted marketing - ads in multiple languages or on ethnically focused cable television networks tout­ing new products, services and international treaties with overseas banks, such as Scotiabank's links with Western Union and HDFC Bank ofIndia. The bank also sponsors pre-immigration workshops in China, and permits immigrants to open Canadian bank accounts before moving, says Scotiabank's Llewellyn, herself a Kuwaiti­born, Egyptian immigrant to Canada.

Other Canadian banks have similar global hook-ups and pre­immigration programs, too. After moving, new Canadians will find ATMs in a multitude of languages as well as polyglot tellers. This summer, Royal Bank of Canada announced its customers can call a helpline manned by agents that can translate their queries into 150 different languages, including Spanish, Russian, Vietnamese and Korean. Meanwhile, the banks deliberately target this migrating workforce with a slew of sponsoring and marketing efforts aimed at different national and ethnic groups. Big banks are now the main sponsors in Canada for cricket and soccer, as well as a host of inter­nationally themed festivals and outdoor events.
BACK IN HONG KONG, high above the nannies and maids, HSBC, the world's most successful global retail bank, plans to grow its share of yet another piece of the shifting global workforce.
The Hong Kong international banking centre (lBe) is one of 40 the bank has around the planet. Bankers from India, China, Hong Kong, the United Kingdom, Aus­tralia and elsewhere sit in an open plan room with low­walled cubicles. There are all colours of national flags on many desks. There are dozens of languages spoken in these IBC's where staff answer questions on local banking regulations from colleagues all over the world who have customers moving from one country to another.
This office is part of HSBC's efforts to grab an ever-bigger slice of the global "mass affluent" market - the lawyers, accountants, sales staff and other middle­management types that travel the world for work, often in the employ of multinational companies, and have an annual family income of up to US$lOO,OOO to deposit.
HSBC, the self-styled "world's local bank," has grown a global retail business by following the international growth of its commercial clients, says Nick INinsor, head of personal finance for HSBC in the Asia-Pacific region. "Because we were banking the companies, we tended to bank the individuals who worked for those companies to."
A slim, amiable middle-aged Brit, INinsor has been with the bank for 25 years in the United Arab Emirates, Qatar, Japan, Hong Kong, Brunei, India, Singapore and New York as well as the Unit­ed Kingdom. He has bank accounts in five countries.
\Vhile there are several banks with global retail banking franchises - Citibank and Standard Chartered, for instance, or Scotiabank in Latin America and the Caribbean - HSBC is with­out a doubt the market leader and is working hard to cement that position. \Vhen HSBC talks about global retail banking services, it's worth listening.
INinsor explains that first-time expatriates - a marketing ex­ecutive for a big consumer goods company that has just been trans­ferred from Atlanta to Shanghai, for instance - can suddenly find they have more disposable income, and that makes them good cus­tomers. They may have a house to rent, which will generate more income, or they may find tax savings that free up extra cash. The bank can help out with cash and wealth-management services, and get its hands on more deposits as well as some healthy fees.
Around the world, there are an estimated 200 million people in the "mass affluent" category, according to Datamonitor - a figure that's increased 34% since 2005. Not every one of them is on the move, but a sizeable portion are. Last year, HSBC's chief executive Mike Geoghan set an ambitious target - to triple the number of HSBC's global premier accounts clients by 2012. Considering that the bank had about two million such clients in 2007, that translates into a goal of a 3 % share of the global mass-affluent market.
Three percent might not sound like a lot. But, as INinsor says, banks in Canada and elsewhere would be thrilled with another six million wealthy clients - wherever they happen to live.

Source: FP October 2008








1/20/2009

THE BOOMER CASE FOR COMMUNITY WEB 2.0 BASED ACCESS TO FINANCIAL SERVICES PROFESSIONAL PRACTITIONERS


Consumers are ready for the networked world.

Are you?


The boundaries of the telecommunications industry
continue to blur as technology, business and consumer
trends redefine the digital services marketplace.
Long talked about, "convergence" is now an
accurate description of the current business model
of the communications services industry. Carriers,
software companies, high-tech firms, media enterprises,
entertainment conglomerates—all may find
themselves collaborating and partnering one day …
and competing against each other the next
.

But what exactly do these different players need
to do to gain a competitive edge? A wide-ranging
research initiative from Accenture—surveying
industry executives as well as consumers in both
the developed and developing worlds—creates
some urgency around that question, especially
when it comes to service providers.
Our global consumer survey of early adopters of
technology devices and services—a group we term
"tech forwards"—found that these users are quickly
embracing the possibilities of a networked world.
They are waiting—sometimes impatiently—for
companies to take this vision to the next level by
delivering a seamless experience, a common
platform and a superior service
.

At the same time, our interviews of executives
representing carriers, software providers and
media/content companies reveal a troubling sense
of complacency among the companies that should
be moving faster to meet the needs of these techforward
consumers. Many carriers appear to be
overly content with selling legacy services,
attempting to recoup sunk costs for their
existing communications infrastructure.

Accenture believes, however, that holding onto
the past for too long creates inertia among carriers
and impedes the transformation process needed to
serve the communications and entertainment
needs of today's consumers.

Companies that expect
to achieve high performance need to move quickly
to meet consumer expectations
.
Consumers are ready

Our research study examined the perceptions and
usage of tech-forward consumers in the United
States, Europe, Japan, Brazil, China and India.
Participants were screened to ensure that they
were part of a demographic that embraces
leading consumer technologies.
The survey findings reveal a high degree of understanding
among these consumers of today's key
trends in the networked world. Accenture refers
to one of the most important of these trends as
"trivergence": the coordination of three components—
devices, data and controls—over a ubiquitous
network. The Apple iPod is perhaps the best
way to understand trivergence. Unlike, say, a CD
player, which contains within a single device both
the data and the controls, a trivergent device like
an iPod operates quite differently. The data or content
resides in the device, as well as in a library,
usually on a person's computer. The controls reside
not only on the physical device but also on what
we call a "soft panel"—in this case, the menus and
screens made possible by iTunes software.
The most important message about trivergence and
the networked world is this: Consumers get it. Only
3 percent of those with whom we spoke didn't
understand the concept and capabilities of this
networked, trivergent world. And 87 percent
either agree or strongly agree with
the prediction that most digital devices
for a home, car or individual will ultimately
feature a network connection
.

Consumers also understand the value of
trivergence. Almost 90 percent agree that
trivergent capabilities will save them
time. More than 80 percent affirm that
trivergence can create more business
opportunities for them. High percentages
also believe that the new networked
world will make their lives richer and
more enjoyable, and bring them closer
to their friends and family. Seventy-eight
percent feel that trivergence can help
them advance their careers.
The consumers in our study are also
prepared to dream big about how a networked
world might change the way they
work and live. Ninety-three percent can
see trivergence creating more energyefficient
controls for things like lighting,
heating and cooling. About 80 percent
can envision network connectivity for
their cars, as well as their refrigerators,
ovens, dishwashers and even small appliances
such as toasters and coffeemakers.

(Put the clothes in the washing machine
but forgot to turn it on?

No problem:
Log in at work to your appliances soft panel
and turn it on remotely.)

Service providers may not
be ready

If consumers are ready for the extraordinary
world enabled by trivergence,
industry executives are uncertain that
companies are feeling a sufficient level
of urgency.
While many respondents to our survey
agreed that the trivergence trend will
continue on a steep trajectory, too few
companies have developed a set of wellformed
implications about the growing
plethora of networked devices. Concerns
seem to be more tactically focused at this
stage: Will more bandwidth be required?
Will more databases will be needed?
The carriers with whom we spoke were
confident about their ability to operate in
the trivergent world; they believe themselves
well-positioned to overcome the
technical challenges in migrating to IP.
They do not believe they are fated to
become “dumb pipe” providers. In
describing their future roles, carriers tend
to view themselves as exerting more control
over content and services than the
technology/content partners will.
In the face of this overall confidence,
however, are some concerns about carriers
expressed by technology and content
partners—specifically, that carriers are not
thinking about the future in a sufficiently
transformative way. As one tech company
executive bluntly put it, "I don’t think the
carriers are on top of IP transformation."
Another possible concern is that the
forces of technological change are too
great for existing carrier strategies.
Another high-tech executive compared
today's situation to the fate of middleware
in the evolving Internet era. “There
was a huge role for middleware in the
early days of the Internet because companies
were trying to figure out how to
interface older enterprise systems with
the Web. Now those companies are taking
out the middleware and going direct. The
same thing will happen in networking.
There will be a need for 'glue' in the early
days, but at the end of the day, every
point will be a node on the network and
the nodes will be able to communicate
with each other without going up to a
super node and coming back down.”
The potential stifling effect of legacy
business models and cultures is another
obstacle to be addressed by the carriers.

One high-tech executive noted, "I’m still
seeing an enormous cultural hold over
from the old days of a monolithic monopoly.
Carriers are making some progress,
but they don’t show enough agility and
flexibility in keeping up with the changes
and what customers are demanding.”
So what is to be done? An executive from
a device manufacturer pointed to a likely
path forward: “To survive, carriers need
some type of value proposition that deals
with content itself so that it becomes
more of a brand play—delivering the content
that consumers value across different
platforms.”

The importance of collaboration

Accenture believes that delivering a
seamless customer experience over a
common platform will require a distinctive
collaborative mindset.
Very few businesses
have a trivergence strategy for the
growing plethora of networked devices
and services, never mind the resources to
execute such a strategy.
Based on our interviews with executives,
the various industry players all see the
value of such collaboration. For example,
one high-tech company executive said,
“We don’t want to have the customer set
up an account with us so that we collect
the money and then pay part of it back
to the carrier. That is a lot more arduous
than using the billing relationship that
the carrier already has established. Any
time a company already has a good
relationship with its customers, we try
to leverage that.”
And, of course, the value of such
partnerships between carriers and technology/
content providers goes both directions.
As another high-tech executive
noted, “I think the financial opportunities
for the carriers lie in unique partnerships
where they can get content, special products,
offerings or rewards—something
that delivers unique and exclusive value
rather than a 'me-too' proposition."
Building mutually beneficial partnerships
with strategically aligned industry players
will be a key to emerging as a provider
capable of making all of these complex
offerings work together.
Carriers, software
companies, Internet businesses,
media enterprises and entertainment
conglomerates will be both partners and
competitors from day to day in the networked
world. Choosing the right partner
has never been more important.


Source: Accenture November 2008