Well, with Obama as president my attitude toward the US had been improved – but seeing such movie is a reminder, that the wolf is still guarding the sheeps.

The chapter comments on 4 sub-questions:

• What is the current mission?
• What are our challanges?
• What are our opportunities?
• Does the mission need to be revisited?

Creating the mission statement can be very difficult – it cannot be impersonal, it has to have deep meaning, be something you believe in – something you know is right.

Peter Drucker takes an example from a major hospital, who stated: “Our mission is health care”. Drucker worked with the hospital administration to correct this statement and turned it into “to give assurance to the afflicted”. Taking a look at the emergency room – this was exactly what they were doing. Both in case of illnesses, but also telling the 8 out 10 that a good night rest would solve the problem for them.

What I like most about this chapter is Drucker pointing out that a mission says why you do what you do, not the means by which you do it. You should be able to match the mission with the things you are doing right now – all the time. Everyone in the organisation should be able to nod and say “what I am doing contributes to the goal”. It must be clear and inspire.

In the Danish DONG energy, in the performance unit I work in our mission is “we develiver as promised – everytime”. We develop project for our oil and gas assets – and I think this mision statement follows Druckers thoughts very well. Even though I do not sit in the projects, but work on our project procedures in our project model, I can see how my daily work contributes to this goal. I create the tools for the rest of the organisation to deliver on quality, time and cost (or as promised).

The post resulted in that I got in contact with mr. Maik Huettinger. I think he was a Polish PhD student for Hofstede back in 2007. He had just finished the a research article on cultural dimensions on Lithuania and Latvia versus Sweden. I see that the article has been published and he has become a professor as ISM in Vilnius, congrats.

He corrected the data I had from Hofstede cultural research on Lithuania, which was from the early 90’s. That research was just 100% outdated after the fall of the USSR.

He published an article called “Cultural dimensions in business life: Hofstede’s indices for Latvia and Lithuania“.

If you do not have access to the article on Emerald, I see a Powerpoint with findings is available online here. Otherwise, if you want to know more about Maik’s research, I have his mail and could redirect it to you, if you contact me.

But all you need to know is, as Maik concludes; Baltic people have a Slavonic heart and a Scandinavian head.

Title: Cultural dimensions in business life: Hofstede’s indices for Latvia and Lithuania

Author(s): Maik Huettinger

Journal: Baltic Journal of Management

Year: 2008

Volume: 3

Issue: 3

Page: 359 – 376

ISSN: 1746-5265

DOI: 10.1108/17465260810902414

Publisher: Emerald Group Publishing Limited

The title comes from a book I bought in London in December. It is a book by Peter Drucker with some of the worlds top thinkers within management, e.g. Jim Collins and Philip Kotler. I have read a few of Druckers books already and this book will be the next in line.

The book comes from Leader to Leader institute, which is an institute focusing on leadership in the social sector a.k.a. non-profit organizations. But I believe a lot of the content and questions this book raises are surely also relevant for normal profit seeking organizations.

As I have read the introduction, I understand that it is a re-print or 2. edition from a book with same title published in the 90’s.

The Five Most Important Questions are (according to Peter Drucker) these:

1. What is our mission

2. Who is our customers

3. What does the customer value

4. What are our results

5. What is our plan

Just initially looking at the questions, I understand that is was the same questions we were struggling to answer when we had our own company. They seem simple and writing a marketing plan is also straight forward. But going just a bit under the surface you understand the complexity in the questions and how they lead to other important questions that are crucial for your business.

I will try to read the book and give some short answers and views on each question in Peter Drucker’s book The Five Most Important Questions.

I still work at DONGenergy, the biggest energy company in Denmark, in the exploration and production. We do the oil and gas stuff.

It is hard to go from an entreprenour and then to a normal “slave for salary”. I cannot let go, not having an eye on new ideas or innovation possibilities. To satisfy the hunger a bit I took an inspiration lecture on making business plans for this competition. It was mildly satisfying – and yet also tempting. Many of my friends have finished university the passed year and I have talked to them about going solo. But many of them seek the safe life. I do understand, some of them have already children and bought a house and stuff like that. They need the steady income.

In the autumn it got too much and I believed I could start something positioned as an investor – and I think it has been pretty good. One of the graphical designers (Olgerd) from my former company took up the challange and we have started the glorious IC Enterprises. The name is a mix of Icommerce Enterprises, and the playing of sound in I See Enterprises. Pretty smart I thought.

Well, the concept is simple. We built a big range of webshops selling niche products. Our first launch has been Coolskins.dk . We have been in the air for a good week now. We sell skins for laptops, Iphones and Ipods – well practically anything you can put a skin on.

The system is based on Magento  and I am very pleased with that.

We have started making marketing initiatives – especially advertisment on Facebook and made a Facebook fanpage. Now time has comed for some search engine workout and further down the line we need some cool bloggers to write about our products on coolskins.

 The next goal will be making a webshop for bags with all kind of cool patterns and stuff. Looking forward to it.

So, if you need a skin for your laptop, netbook, iphone or Ipod – you need to go to Coolskins.dk

Ignoring the more personal things, I started in my new job at DONG Energy. DONG Energy is the biggest energy producer in Denmark and is a company in rapid growth.

I am placed as project coordinator in the Exploration & Production division. More accurate, I am placed in Project Support under Technology & Operation Services.

I have been here a short time and have quickly gained insight in the complexity of big scale project management. One of my key responsibilities is to develop and implement a new project model for the organisation – a job I initially thought as easy.

But I must admit it is a complex size. Not because the work as such is difficult, for start I assist one of our skilled consultants, but I see the complex of organizational and stakeholder politics and interests. Gaining broad ownership for such a big project and key project is very difficult. Making so many people work in the sam direction would not be possible without top management backing and outstading diplomatic skills.

You should choose you battles with great concern and focus on compromises.

People might ask, what about imaginess, my own company?

Well, we have set a path to sell it on to new owners that will further explore the potential. We hope to make the official transfer during next month. But that also comes with a range of difficulties. Transfering clients is not a problem, but the extensive knowledge that comes with the business is more difficult. You can write pages after pages about the details of the market, technology and so on – but you will never get it all.

So, our only option is to do it as good as possible and stay by as board members to give advice and guidance.

Lastly, I would like to wish you all a happy and fortunate New Year.

// Gyte Gedvilaite, is co-owner of Imaginess I/S, a danish company that assists other businesses in outsourcing their graphical activities while maintaining the comfort of communication and in-house quality. For more information, please visit http://www.imaginess.dk //

Crisis seems to be left the only topic in the business world. Saving expansion to the better times, laying of employees and sending “We do not look for an employee anymore” note to all applicants to the job opening become new trends. How to save costs while keeping sales up – that is the question.

Outsourcing is, of course, simple and well known solution to it and many Danish companies (according to Eurostat, highest percentage in whole EU) use it. Yet there is also a downside for it. Recent survey by Deloitte called “Why settle for less” shows that 39 per cent have terminated the outsourcing contract and came back to in-house operations. Extremely high number that seems to be caused simply by mismatched expectations.

In many cases a company, that decides to outsource any activity, chooses among usual outsourcing countries (mostly in Asia) and the only interest they have is price per hour. Unfortunately, overlooking such factors as quality understanding, efficiency, ability to work without control, meeting deadlines and amount of communication needed in order to finish the project often ends in costing more than expected. Sometimes so much more, that coming home and paying twenty times higher salary is cheaper.

That does not mean outsourcing is a no-go. Settling for less is. There are few more things to be noted:

• Do not go for usual “outsourcing countries”. They may be the cheapest, but they also know it. When price per hour is low, there is always a way to put on some extra hours. Try to negotiated price per whole project or get estimates of hours that will be used.
• It is not necessary just IT and manufacturing. Even though these two areas are among most popular ones in Denmark, it does not mean other activities have to be done at home. Many services are easy to outsource, for example creation and printing of marketing material, translations or data analysis. Our customers are always surprised, when we tell that it is cheaper to not only design and print, but also ship catalogues from Lithuania to Denmark ( as opposed to ship them from somewhere in Denmark to other part of it). Shipping is usually big additional costs when outsourcing to a country far away, but not in this case.
• Culture is important. From our customers and partners we have heard many stories about “different understanding”. Quality means one thing in Denmark, but not the same in Turkey, India or China. Generally, there are some studies that group countries in some clusters, where things are understood similarly. For example, Baltic region in Europe is considered one big cluster and we always advice our customers from Denmark to choose another country from this region. Salary can be 6-8 times lower, but efficiency, understanding of quality and need for specifications will be the same as at home.
• Language seems to be one of the key problems. Most of Danes speak English very well, but not being able to speak danish and having to translate specifications or tasks descriptions was named as number one difficulty by our customers. Search for a partner in similar culture and who can speak your language and outsourcing will be piece of cake.
• Start outsourcing smaller, routine tasks that are relatively not risky. Once the relationship is build and partner seems trustworthy, you can gradually go to more difficult jobs. Best out of this strategy is that it is totally a win-win situation: you minimize your risk and the company you outsource to has time to learn and adapt to you. Our most satisfied customers started exactly the same way: first outsourcing the simpliest tasks, then giving more difficult ones and finally using consultancy and advice.
• Pay attention to flexibility. It may give you way more value if the company you will outsource to can offer something else, not just low cost. Maybe they deliver so fast, that it is worth paying extra. Maybe they can be the ones that check let’s say spelling mistakes or quality of material. It surely requires trust, but can also take of lots of weight off your shoulders.

Finally, remember that outsourcing is not always an answer. Consider “what” and “how” before seriously making the decision. But if you do your homework and plan actions carefully, very high chance that the day you decided outsourcing will always be marked by a happy face on your calender.

Peter Drucker has over the past 50-60 years been leading on thoughts on business, entreprenourship, innovation and management. Born in 1909 he had closely followed the change from industrialization and into our known knowledge society. He wrote a ton of exciting books and articles until his death in 2005.

From Wikipedia I have gathered some of his key points:

Several ideas run through most of Drucker’s writings:

• Decentralization and simplification. Drucker discounted the command and control model and asserted that companies work best when they are decentralized. According to Drucker, corporations tend to produce too many products, hire employees they don’t need (when a better solution would be outsourcing), and expand into economic sectors that they should avoid.
• A profound skepticism of macroeconomic theory. Drucker contended that economists of all schools fail to explain significant aspects of modern economies.
• Respect of the worker. Drucker believed that employees are assets and not liabilities. He taught that knowledge workers are the essential ingredients of the modern economy.
• A belief in what he called “the sickness of government.” Drucker made nonpartisan claims that government is often unable or unwilling to provide new services that people need or want, though he believed that this condition is not inherent to democracy.
• The need for “planned abandonment.” Businesses and governments have a natural human tendency to cling to “yesterday’s successes” rather than seeing when they are no longer useful.
• A belief that taking action without thinking is the cause of every failure.^[18]
• The need for community. Early in his career, Drucker predicted the “end of economic man” and advocated the creation of a “plant community” where individuals’ social needs could be met. He later acknowledged that the plant community never materialized, and by the 1980s, suggested that volunteering in the non-profit sector was the key to fostering a healthy society where people found a sense of belonging and civic pride.
• The need to manage business by balancing a variety of needs and goals, rather than subordinating an institution to a single value.^[19][20] This concept of management by objectives forms the keynote of his 1954 landmark “The Practice of Management”.^[21]
• A company’s primary responsibility is to serve its customers. Profit is not the primary goal, but rather an essential condition for the company’s continued existence.^[22]
• Organization should have a proper way of executing all its business processes

Many of these points inspire me as a manager and as a person. His views are often deeply philosophical and challanging the perception of normal business.

I appreciate particularly his views on corporate social responcibility and his question of the motive of a business. Is the purpose profit or lies there deeper purposes behind the excistence of business. He and I believe so. Businesses have a deep purpose in every person daily life. Work gives value and meaning to workers, products create satisfaction above the plain marketing message.

I will over a range of posts take out each keypoint and give my ideas to it as well as Druckers. I hope you will enjoy it, as much as I…

Let’s say it – we are going to face recession.

I remember I saw in Lithuania a CNN program where they were guessing if it would be just a slight setback or recession. People was optimistic – as was I at that moment. For me, it was just some house owners in US having some money problems.

But we are now facing the full strength of recession – maybe the worst in the history of economics. And that makes me think of the fundaments of our society.

The great thinkers of industrialization was liberals and was talking about letting the market forces, demand and supply, control the market. At these times we see companies crippled and in desperate need of help from government to survive. Worst is that the governments come to aid.

I am not particular liberal – but a bank which one year earns billions of Euros and the other year gets government help to survive gives me a wrong impression of the “liberal forces of the marketplace”. I ask these great thinkers to take stand and let these huge corporations fall to the ground.

It is a law of the market. Get too big and you will collapse – nothing is eternal – and the governments are just prolonging the death og e.g. big banks and industrial giants.

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Unfortunate it is more than just financial issues – we talk normal people with normal jobs. And these people are the concern of the governments of the free liberal world. With the threat of thousands of unemployed the governments around the world sees it as a cheap cost to send a few trillions out in the market place.

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My morale is: The thoeries of the industrial age is no longer valid. Something changed the game rules – and now governments are trying to compensate for this. Is it right to do? Well, the alternative is not appealing.

It proves maybe more that theories of persons like Peter Drucker is more correct. Elements as the purpose of business is to give people persons in life, that companies have a bigger social role than the aim for profit.

I would love to hear or read Peter Druckers own views on this matter.

On a daily basis I try to run a company. I am co-owner together with 2 partners. It is the company Imaginess design & dtp.

We have been doing this for a year now and I would say we have a steady growth. Our core concept is to outsource graphical design for Danish companies to our Lithuanian company. We started out outsourcing directly to Lithuanian freelancers – but have realized that we need a steady base of work. Meaning full time designers. We have now some nice office spaces in the artsy quarter of Vilnius.

Challenges

The challenges are many and I can divide them on a internal and external level.

1. Communications: First of all, I and one of my partners live here in Copenhagen. It makes communication internally very difficult. We try through Skype and mail – but hard it is.

2. Competences, ressources and capabilities: Our business strategy is highly based on minimizing risks. This means that we have not invested any money in the company. It also means that growth through economical ressources is going slow. We would do miracles with 10 million Euros.

It also comes to the personal competences. A small company is depending on that everyone has a drive and very broad competences. Designers should be business managers and business managers should be designers. And everyone should be skilled in project management.

So when it comes to big organizational capabilities, it is difficult. I see myself as a good strategist, but it is hard to think strategy in a small company where financing is low and most of the time goes with doing daily stuff.

3. External comes when we face costumers – or potential ones. It is hard work to do B2B – mass marketing does not work. And it makes it even harder when there is a high mistrust to your product from the decision makers.

Outsourcing can be dangerous and many concerns arrise with the client. We try to do what we can to reduce these uncertainties, but it is difficult. Therefor we are preparing to hire an external sales consultant to work for us. We realize that as entreprenours we are not professional sales persons. Our sales corner is not working as effective as it should.

So we hope from 2009 that we can have a highly effective outsources sales corner.

Additionally I have also a few other concepts “in the lake” – but let’s take them another day…