Execution Is The KEY

A study from Fortune reveals that 70% of CEOs failure is the result of CEOs not taking action. What actions did these CEOs fail to take? By not getting things done, by being indecisive, by not delivering on commitments and by bad execution.

Charles Schwab rose from laborer to the executive ranks through his ability to execute. “Schwab was not an originator, he was a builder”, commented his boss Andrew Carnegie. Schwab once told a story of a highly talent mill manager who worked for him who just could not get his mill to produce fully. The manager tried everything he could but failed.

Schwab went over at the end of the day, took a piece of chalk and asked the day supervisor “How many heats has your shift made today?” The supervisor answered “Six”. He chalked a big “6” on the floor, and then passed along without another word. When the night shift came in they saw the “6” and asked about it.

“The big boss was in here today,” said the day men. “He asked us how many heats we had made, and we told him six. He chalked it down.”

The next morning Schwab passed through the same mill and saw that the “6” had been rubbed out and a big “7” written instead. The night shift had surpassed the day shift. That night he went back and the “7” had been erased, and a “10” paraded itself. He had somehow created a competition among the night and day shift without a single word. This went on for months until the mill, formerly the poorest mill, became the highest performing plant of all. He somehow managed to get it done.

The best leaders, like Schwab, know how to ensure work gets done. So, do great companies. In the 80s and 90s, Toyota produced better results than General Motors (GM) because it executed better.

Execution is critical

The number one enemy of any strategy is poor execution. Dell's business model and strategy is public property yet few have been able to replicate it. The reason, according to Michael Dell, founder of Dell, on why his “direct business model” continues to work, is because “we execute it. It's all about execution.” Southwest Airlines has been profitable every year for the past 30 years. Its' strategy is known, yet like Dell, no company has successfully copied its execution. Walmart won for years through the power of its ruthless execution, becoming the world's largest store.

Having an idea is meaningless unless someone steps in and does some work. Years ago, HP hired Carly Fiorina, as CEO to take the company forward with new innovative ideas and a bold new direction. She set in place the greatest merger in history and planned to have innovative new products from this merger. Seven years later, the merger failed and she was fired. New CEO Mark Hurd came in and pulled a great turnaround through ruthless execution and no-nonsense discipline. He cut expenses, improved efficiencies and put the right people into key roles, driving operating results in the process.

Learn to execute

Mark Douglas, an expert trader said, “The proper execution of your trades is one of the most fundamental components of becoming a successful trader and probably the most difficult to learn. Most traders find it is much easier to identify an opportunity, than it is to act upon it.” The same applies to all fields. Making opportunities a reality requires discipline and focus.

The key problem is habitual. Taking action is painful and forces us to do stuff, requiring discipline. Most of us hate discipline as prefer to remain in our comfort zones.

The trick is to start at the beginning stage of a task. Starting is very hard so start immediately. Start working on your to-do list the moment you wake up and don't procrastinate. Once you get one task done, even if it is a seemingly insignificant task, adds momentum to your day. This is first lesson on getting things done: Don't wait for a perfect opportunity. Just Do It Now.

Everyone can learn execution. There is no secret ingredient. It's all about hard work and discipline, but it can be mastered. Here are my top 10 ways on how to master getting things done:

1. Win the early morning battle daily. Resist the temptation to get sucked into checking email or wasting time in meaningless work. A quick win in the morning sets the right tone for determining how the rest of the day plays out.

2. Make a list of the tasks you need to accomplish. Assign realistic priorities to each task (due today, tomorrow, next Friday etc). Work on your MITs (most important tasks).

3. Work on small portions of each task daily. Don't wait till its near due date to complete the task. When you hit a wall, stop working on the task and work on another task. Don't watch TV or go on Facebook. Keep working on another task instead.

4. Eat the Cockroach: Do your most unpleasant task first. If the first thing you do in the morning is “eat a cockroach”, the day can only get better from then on.

5. Work in intervals and then take a break by rewarding yourself with a chocolate (or a healthier snack!) and then return to finish another portion of work. Make sure you decide upfront on your intervals to work and your timing for the break and stick to that decision.

6. During your break, reassess where you are and see if there is a new perspective you can bring to the work for the next interval.

7. Always keep track of your progress. Cross things off the list as they are completed. It will give you a good sense of achievement and motivate you to complete all other tasks.

8. Be Clear About your end goal. Reassess your execution list daily. Rewrite and reprioritise as needed. The clearer the end goal is, the easier it is to get moving. Always ask yourself “What needs to be done next to move this project forward?”

9. Leverage technology to complete tasks more quickly, efficiently or accurately. There is always a shorter and better way to get things done. Look for the fastest option which will give you the best results.

10. Be passionate about your work. Passion brings energy. If you don't actually care about what you're doing, it's very unlikely you will not do it.

Final thoughts

I love the African tale about the importance of running and getting things done: “Every morning in Africa a gazelle wakes up and knows it must run faster than the fastest lion, or it will be killed and eaten. Also in Africa a lion wakes up and knows it must outrun the slowest gazelle, or it will starve to death. It does not matter if you are a lion or a gazelle, when the sun comes up, you better start running.”

This same tale applies to us as individuals and as businesses. If we want to succeed, planning which shoe to wear for the run may be important, but never as important as the running itself. That is what great leaders do. They just get things done. As Nike would say, they “just do it”. Are you getting things done?

Insurance You Dont Need

If others rely on you financially - then you are in the market to buy life insurance to fulfill your responsibilities. But what life insurance you should avoid buying

1. Guaranteed issue. Guaranteed issue life insurance is peddled on late-night television. You’ve probably seen the ads. The major selling point is that if you apply, you can’t be turned down. On the face of it, it might seem like a no-brainer. But there is actually far less to this policy than meets the eye.

First, if you do purchase such a life insurance policy and die within two years, most policies call for the company to simply return the premium you paid. That means if you are very ill and don’t expect to live a long time, this might be just a waste of energy. Also, the death benefits are very low and the premiums are expensive.

If you absolutely need life insurance, can’t get coverage elsewhere, and think you have a chance to live beyond the exclusion period, you may have no choice but to purchase a guaranteed issue policy.

2. Life insurance for children. In general, life insurance for kids is a huge waste of money. That’s because most children are born healthy and live a very long time. And since children don’t have any income, you don’t really have any reason to insure their lives. Just because you don’t buy insurance doesn’t mean you don’t love your children. It means you are smart enough to put that money to better use–like saving for a college education.

If you have available disposable income - purchasing life insurance for children makes a lot of sense. Life insurance provides financial support in an unfortunate or unforseen accident or critical illness resulting in the child being totally and permanently disabled. Low or middle income family would be financially wipe off having to upkeep a disabled child over a long term period. 

The second advantage when purchasing life insuance for your child - is the low premium rate that remains level throughout the child lifetime.

The key to Life insurance is financial protection (and not profiting from the policy). To profit from life insurance - the policyholder must die or disable. Life insurance is for those livings - people that you left behind and who depended on you financially or you are living but totally disabled. 

3. Travel/accident insurance. This coverage is very cheap for good reason. Most people arrive at their destinations safely, and very few get into terrible accidents. And what does it matter how you die, by the way? Why would your family need more life insurance just because you died in an accident rather than from an illness? I know this sounds crass, but this insurance makes no sense. Rather than throw your money away on these policies, have an extra-large, fresh-squeezed orange juice at the bar while you are waiting for your flight. You’ll live longer.

The annual premium for Travel Insurance is approximately RM350. The cost of hospitalization in a developed country (USA, UK, France, Australia etc) would have killed you (instead of the illness / accident). The cost to repatriate a body from Perth Western Australia to Kuala Lumpur was RM50,000 (2012) using MAS. Your family member may just dump your body in Swan River which is much cheaper.

4. Whole life/universal life. Life insurance is a tool, not an investment. With whole life/universal life insurance, you will pay a higher premium with the promise that the company will take those extra dollars and invest them for you. The problem is that this type of insurance is very expensive. The investments don’t grow because the expenses eat up your interest.

Whole life and universal life policies are the reasons why life insurance companies can afford big buildings and Super Bowl ads. The only time these policies make sense if you have an estate-tax problem but this is a subject beyond the scope of this post.

Life insurance is a very important tool. When you use it for its intended purpose, it’s great. That means you should look to term life to cover your family protection needs. Ignore the slick sales gimmicks of guaranteed life, life insurance or children, travel and accident insurance, and whole life/universal life.

Medical Exam Before Life Coverage

Why is there a medical exam before your life insurance becomes active? Imagine what would happen if there were not one: how many people would take out a large policy two days before their death from a fatal disease?

 

It is important to think about how an insurance company works. They agree that if a certain event happens, they will pay a certain amount of money. In return they charge a premium. In order to make the system work an insurance company needs to have a large group of people insuring similar risks. By having many people pay a little and only a few needing to receive a lot of money the company can make the whole system work.

Companies also look at this group who insure with them, what is called the pool, and split it up into smaller pools. The way the companies deal with the problem is by dividing people into groups or pools for life insurance purposes. We may know that everyone will die but we do not know when.

Even if we do not know exactly when we can make some good guesses based on other factors. For example, a man of eighty years of age is likely to die sooner than a man of twenty, so the older man will pay a higher premium. A man of twenty who loves extreme sports, or who tries to climb Everest, is more likely to die sooner than one who does not, so again he will pay a higher premium. All men of eighty and all men of twenty will be in different pools for risk purposes.

So why a medical exam? Things like weight, smoking, diabetes and many other medical conditions also influence how long you are likely to live. Note influence, it is not a certainty at all. A fifty year old man who is fit, does not smoke and has no identifiable diseases is likely to live longer than one who is 100 pounds overweight and smokes two packs a day. So those two should be in separate risk pools, and charged different premiums.

The purpose of a life insurance medical exam is to work out which risk group you belong to and from that work out how much you should be charged in premiums. If you knew that you were terminally ill but the insurance company did not then they would charge you the wrong premium.

Insurance Growth & Consolidation

The insurance sector is forecasted to see substantial growth in the next few years as continued diversification, consolidation and international activity spur rising premiums and uptake of new services.

Moderate gross domestic product (GDP) growth for the rest of the year, however, could pose a challenge to its growth as the effects of a weakening global economy trickle down to private consumers.

Gross direct premiums were expected to reach RM14.3 billion (US$4.48 billion) in 2012 and rise to RM17.5 billion (US$5.49 billion) in 2015, according to the Malaysia Rating Corporation Bhd (MARC) which released its forecasts in a research note in June.

This represented a compound annual growth rate (CAGR) of seven per cent, which was likely to outstrip broader economic growth.

MARC expected new business premiums in the life insurance segment to reach RM10.2 billion (US$3.19 billion) this year, rising to RM13 billion (US$4.08 billion) by 2015.

The non-life (general) segment was also forecasted to grow from RM4.1 billion (US$1.29 billion) in 2012 to RM4.5 billion (US$1.41 billion) in five years’ time.

The agency said that the life insurance market would benefit from rising incomes, as well as increased deployment of ‘new and innovative products’.

General insurance would see growth stimulated by the implementation of mega-projects, leading to greater demand in a number of segments, including workers’ compensation, employer liability, contractor risk and engineering.

The medical and personal accident segments would also continue to perform well, MARC said. Other observers were even more upbeat about the sector’s outlook. In May, the local press reported that the Life Insurance Association of Malaysia (LIAM) said the life sector could grow by 10 per cent in 2012.

Growth would be driven by “the large and growing middle- income population in the region with higher levels of disposable income and who are also financially literate. The market’s recent growth and promising outlook had led several major international players to enter the market.

In 2009, the government lifted the ceiling on foreign ownership of insurers to 70 per cent from 49 per cent, allowing greater participation from international firms, which brought an increased level of dynamism to the industry.

Competition was expected to rise further following the pending auction of the insurance joint venture between the UK’s Aviva and Malaysia’s CIMB Bank. Aviva was selling its 49 per cent share in the local firm as it withdrew from non-core markets, partly to raise cash to offset its exposure to the eurozone crisis.

CIMB might also sell a substantial portion of its 51 per cent stake in the venture. Competition, greater international participation and a new risk-based capital (RBC) framework were also driving consolidation in the industry as players looked to pool resources and capitalise on economies of scale and strategic fits.

The RBC regulations require firms to have a minimum 130 per cent of supervisory capital-adequacy ratio (CAR). RBC implementation helped accelerate the pace of consolidation, with seven mergers and acquisitions taking place in 2011. Many of the local conglomerates took RBC as an opportunity to consolidate. It is widely known that other existing players in the market would entertain potential suitors if approached, so more consolidation is expected.

Syariah-compliant Islamic insurance segment – known as takaful – to continue to grow strongly.

In June, the local press reported that Etiqa Insurance and Takaful, the insurance branch of Maybank, had forecasted that the family takaful market, which accounted for 80 per cent of the Malaysian takaful segment in 2010, could grow to RM7.2 billion (US$2.26 billion) in two to three years from the current RM4.2 billion (US$1.32 billion).

CAR regulations for the takaful segment similar to those rolled out for conventional insurance were being introduced and was expected to take effect by the beginning of 2013. Conventional insurance firms owned by banks had survived better since the CAR regulations were tightened, as the high profits of the banking divisions funded the increased capital requirements of the insurance business.
The insurance divisions, which tend to make a smaller contribution to profits, were not able to meet the significant increase in CAR themselves.

With the insurance market in the process of dynamic change, due to rising demand and regulatory changes that aim both to increase solidity and allow greater international participation, consolidation, diversification and the rise of the takaful segment looked set to transform the sector over the coming years.

Hunter Versus Farmer

The cost of finding new customers is estimated to be between 500% and 800% higher than that of repeat or additional sales to existing customers. With profitability, therefore, significantly higher when selling to existing customers, it's time to decide what kind of sales representative you want to be: transactional (hunter) or consultative (farmer).

Challenges

There's a lot of pressure on salespeople to constantly keep their pipeline full of warm to hot prospects. On top of that, sales quotas are ever more challenging in an increasingly tight economy. Competition is hotter. Buyers are more sophisticated. Commoditization is rampant. Your unique value in the marketplace has been eroded by the incessant claims of your competition that they can do everything you can do - and do it better. Any (or all) of this sound familiar?

Hunting

While these are all common factors we're forced to deal with regularly, at the end of the day increasing sales and profitability is the job of every sales professional. Sales professionals who are primarily "hunters" typically look for their sales increases from transactions with new customers. They likely are successful cold-callers who work hard at finding sparks of interest in their offerings that they then develop through their sales funnels to close. They uncover prospects who have a need for their product or service and are willing and able to make a purchase now. Or they repeatedly respond to bid or quote requests with little hope of engaging the prospect in an investigation of their true needs and wants.

Sales "hunters" often concentrate their efforts on meeting the lowest common denominator with their prospects. They frequently deal with "default" buyers - those who are technical buyers in larger organizations or those who wear many hats in smaller organizations but are not professional buyers. These buyers are looking for the most expeditious, least painful transaction they can arrange. They accomplish this by limiting the scope of the purchase to single products that meet predetermined specifications or features. Their fervent hope is for the product to deliver benefits limited in scope to a very narrowly framed need, problem or issue. Transactional sales are often price driven rather than value based.

Many transactional customers are new customers. A worse situation is that repeat customers are still transactional. This would indicate that the customer doesn't have any particular loyalty to the sales organization or representative and that any relationship that exists is very fragile. It probably also means that, for the sales organization, this is just a marginally profitable customer.

On the right track

Somewhere along the way to becoming less transactional, some sales representatives start to get a taste for selling in a more customer-focused, consultative manner. This yields better results for both the sales representative and the customer.

Sales at this level involve mid- to upper-level management in the buying process. For these buyers the decision making process is aimed more toward deriving operational results. The sales transactions are typically larger, involve multiple products and bring value to the specific objectives of those manager/decision makers. The sales professional has an opportunity in this scenario to build trust by asking probing questions and proposing a solution that helps the manager/buyer to reach their objectives - to act in a consultative manner. This type of sale presents a great opportunity for a thoughtful sales professional to demonstrate his or her willingness and acumen to be a trusted business advisor.

Farming

The most successful sales professionals employ a customer-centric method of selling, very focused on the needs and wants of their prospects and customers. They act as trusted business advisors working to bring strategic value to each transaction. These salespeople realize that to accomplish their goal of maximizing value for their customers they need to get out of the trenches and interact with C-Level (CEO, CFO, CIO, etc.) executives. Decision makers at this level typically transact more complex deals that have a direct impact on their businesses' bottom line.

Evidence indicates that selling at this level has an abundance of positive implications for all parties. Just getting to this level takes solid planning and research by the sales representative. The information gathered in this process gives the sales representative a basis for credible conversation and further exploration with the executive buyer. Investigation and communication at this level transcends departmental rivalries and addresses the customer's strategic concerns. Even in smaller organizations, using this approach positions the sales representative to become a strategic partner with their customer, wherein the customer relies on the trusted advice offered and the results achieved through the relationship.

Customer loyalty arises naturally out of the strategic-level partnership created when the sales representative takes a genuine interest in helping the customer meet strategic goals. The existence of a strong, customer-focused, strategic relationship effectively locks out competitors, thus lowering the cost of doing repeat or additional business with that customer. Sales people who employ this method of selling are "farmers" sowing seeds of trust and harvesting increased sales, higher profitability and customer loyalty.

Customer-focused solutions, increased sales, higher profitability . . . everybody wins! You decide what kind of sales professional you'd rather be, hunter or farmer

Wrong Priority

The latest research by Zurich insurance company suggests that Brits are more concerned with their cars and homes than with their life. According to figures, revealed by the company, 75% of Brits have home insurance in place, 65% have comprehensive car insurance in place and yet only 33% have live cover.

Despite this, however, Brits say they consider life insurance to be the most important type of protection, especially when compared to car, travel and home cover.

Without life insurance, the devastation felt when a loved one dies can closely be followed by financial devastation when the family are unable to afford to live their current lifestyle. For many, selling a family home soon after the death of spouse is a harsh reality.

It is interesting to note, that only 16% of Brits choose the brand they trust when shopping for insurance. The vast majority goes for the best cover (53%) and for the best price (45%).

What To Buy???

When it comes to choosing life insurance policy, the myriad of options available makes it difficult to know how to customise a policy to meet your specific needs. There is much more to a life insurance policy than simply choosing a term and amount, and often buyers are left wondering if they did the right thing.

Carelessness is certainly part of wrong decision making when it comes to choosing a suitable policy in life insurance. People are surprisingly eager to invest money without sheer knowledge of what they are doing. However, even those buyers who try to be diligent lack a decision making framework to be successful.

Here are a few ways that may help you to make informed decisions when it comes to choosing a life insurance policy. Every human being needs life insurance but the amount of insurance required and type of product completely varies from person to person.

Earlier consumers would usually buy insurance policies because of the fear factor rather than understanding the advantages of it. Today’s scenario is completely different – life insurance is for you if – you die early or you live too long. It is essential that one understands the product thats/ he buys, especially, if it is of a long term nature. In most cases the nominee gets the benefits of the insurance post the death of the policy holder.

The best way of buying a life insurance policy is by sitting with your advisor and working out on “need analysis” for yourself. It is important to note that the need analysis is based on your disclosures of your income, expenses, liabilities, assets, responsibilities and obligations. If the information provided in the need analysis are incorrect, manipulated or distorted then the resultant inference of the same would not be the right one and you may land up taking a wrong plan.

Generally it is seen that the person has the following insurance needs:
* Protection needs
* Savings needs
* Investments needs
* Pension and annuities needs

Once the needs are clearly identified, it may or may not be possible to fulfill all the needs at that point of time. But it is very important that one identifies the same and is fully aware of the needs. Then based on your net investible surplus that is available at that time, either one or combination of products can be considered as to meet specific needs that are identified.

It is also recommended that the need analysis be done on a yearly basis as most of the parameters tend to change over time. The current avenues available for the policy holder for investments are banks and banking products, post office investment, mutual fund, direct investment into equity and debt instruments, investment in real estate, gold etc. While doing any investment one must ensure the three financial needs.

Immediate need: The need that would take care of immediate requirement for discharging all liabilities and commitments, even if s/he is not there.

Collective needs: These are the needs of a person which do not come with pre-warning. These are those for which a person never does any budgeting from monthly savings.

Retrial needs: This is basically to build up capital which would take care of post retirement needs.
However, designing life insurance policy or a combination of various plans would be definite solution for the same. The plans can be customised to meet ones specific needs and most importantly made available according to ones net investable surplus.

One thing to be kept in mind is that buying the right life insurance plan is an art and must be done scientifically with full understanding.