Announcing a pay what-you-value-and-can pricing strategy for leadership development

Our Work
Leadership development is often a phrase in corporate jargon typically signifying something that management wants you to do. At Vivekin Group, we have been changing this scene through the leadership intelligences framework that I developed while I was at various business schools (Wharton, Purdue, and University of Minnesota). We have honed the research over the years into something that can be practically applied in everyday life, both within and outside the corporate environment. People who attend our workshops learned to apply the framework in their everyday lives–taking it to their relationships with their families, their friends or their colleagues, or to solve everyday practical problems, or to resolve everyday issues that nag at our ethical selves. So from my perspective, life has been good. Very good.

Economically-deprived schools in India and budget-strapped entrepreneurs
However, two years ago, my wife, Leela, a professor at Duke University, and I started to work with a program called DukeEngage in which, during the summers, we take teams of undergraduates from Duke to teach in economically-deprived schools in India. In the course of working with these tremendously smart and motivated schoolchildren who were shackled by the economic realities of their lives, I began to see how much they could benefit if they were trained to develop and exercise their leadership intelligences. Well, of course, the payments I get from my corporate clients were beyond the imagination of these schoolkids. So, it had been at the back of my mind to explore how I could make leadership intelligences training available to “clients” like these schoolchildren. A more egalitarian pricing structure was needed.

I also spent most of the last two years in India exploring opportunities as Leela was there on her sabbatical research. I discovered a tremendous sense of excitement and optimism in the business climate in India, but again, the numerous entrepreneurs–the ones in most need of leadership training–could not fit the cost of the programs into their start-up budgets. So this became an other incentive for me to explore different pricing models.

A gang-rape in California
However, the tipping point came with the news in late October 2009 that a 14-year old schoolgirl was gang-raped in Richmond, CA. The worst aspect of this tragedy was that dozens of witnesses stood and watched, or just walked away. While psychologists may have explanations citing group-behavior or mob-mentality, to me, this was also a case of a tremendous lack of everyday leadership in our society and in our communities. Leadership needs to be an everyday habit. There was nobody there in that small California town that could stand out from the crowd and say, “This is wrong,” and call the police. Instead of jumping foolishly in front of the mob and putting oneself in great danger, an intelligent leader would have found ways to stop the crime.

Pay WYVACan
These thoughts and experiences have led to the development of our new pricing strategy called Pay WYVACan–Pay What You Value and Can. Clients of Vivekin Group–whether they are individuals, or they are start-ups or they are Fortune 100 corporate entities–they can now use our services–on our website, and in our workshops and strategy consulting assignments–on a “pay what you think our services are worth, and what you can afford.” To find out why we’re not afraid of free-riders, look at this video.

An Invitation to You
I invite you to join the Vivekin Leadership Exchange. It’s free. Through exercises to develop and hone leadership intelligences, through discussions, through research reports, we seek to collaboratively create a community of everyday leaders–a concept which understands that we are, each of us, leaders–leaders to our children, to our siblings, to our friends, to our clients, to our co-workers, to our fellow-commuters, in fact, in every interaction of our lives, we are leaders. How we use our leadership intelligences will determine whether we progress in our careers and our lives, and whether we will leave the world a better place than the one we came into. So please come over, register, contribute, collaborate, and above all, enjoy being an intelligent leader. Together, let us make leadership an everyday habit.
Also, please help make leadership an everyday habit for people all over the world, by forwarding this invitation on my behalf to your friends and family.

I wish you the very best in 2010–let this be a year in which happiness and good things come to you from all sides.

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A Pygmalion approach to pricing a service

Pricing is always a tricky problem where a service like training or teaching is concerned, because marginal price (i.e. the price to serve one additional customer) is almost zero (as with most informational goods). How much more does it cost you to teach 51 students when you’re already teaching 50? Economics teaches us that in the long run, the price of a product goes to its marginal price. But surely, a service with a marginal price near zero cannot be given away for free!?
George Bernard Shaw had an interesting take on pricing in his play, Pygmalion. See this video: (if you have difficulty understanding the accent, a (more elaborate) transcript of the relevant portion from the play is below the player).
Here’s a videoclip from the 1938 movie Pygmalion (whole movie available on YouTube)
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The section from the play is more clear:

HIGGINS. Come back to business. How much do you propose to pay me for the lessons?
LIZA. Oh, I know what’s right. A lady friend of mine gets French lessons for eighteen pence an hour from a real French gentleman. Well, you wouldn’t have the face to ask me the same for teaching me my own language as you would for French; so I won’t give more than a shilling. Take it or leave it.
HIGGINS [walking up and down the room, rattling his keys and his cash in his pockets]
You know, Pickering, if you consider a shilling, not as a simple shilling, but as a percentage of this girl’s income, it works out as fully equivalent to sixty or seventy guineas from a millionaire.
PICKERING. How so?
HIGGINS. Figure it out. A millionaire has about 150 pounds a day.
She earns about half-a-crown.
LIZA [haughtily] Who told you I only–
HIGGINS [continuing] She offers me two-fifths of her day’s income for a lesson. Two-fifths of a millionaire’s income for a day would be somewhere about 60 pounds. It’s handsome. By George, it’s enormous! it’s the biggest offer I ever had.

What would you call this pricing strategy? An equal-share-of-wallet strategy?

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What Matters Now: Leadership Intelligences

Seth Godin brought out a free e-book titled, What Matters Now (download it here). It’s a fascinating collection from many thought leaders. Each writer elaborates in one page on a theme s/he has chosen. It is a must read.

I am sure that Seth–in his usual generous style–intended this book to be a thought-provoker. In that spirit, I asked myself–what do I think would particularly matter now? Not just in a corporate environment or an organizational setting, but more so, in our everyday lives. I read Seth’s book, and found that a particularly human quality-that quality which marks us as quintessentially human–was not on any page. This quality–the hallmark of us homo sapiens, the “thinking” race– which I think matters very much now is “Intelligence“.

Intelligence, not as IQ, and not even as Emotional Intelligence. But intelligence as something that drives leadership–to be more precise intelligence, in its five-fold form, as the five leadership intelligences. Intelligence–or intelligences–however, does not figure as a topic in What Matters Now. In fact, it does not figure even as a word.
My work with underprivileged schoolchildren in India, the partisan debate in the US over the important issue of health care, but most immediately, the gang-rape of a schoolgirl in California–in which dozens of witnesses looked on, or simply walked away without doing anything–and the speedy response of a passenger yesterday who thwarted a terrorist’s attempt to blow up a Delta Airlines flight, have all convinced me that intelligences–leadership intelligences–matter tremendously now.

So, in the spirit of adding to the knowledge in the book, I made a page titled “Intelligences”. You can download it here and forward it to friends.

I’d love to hear your comments and additions.

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Understand your customer

On a Saturday some weeks ago, I was driving from Chapel Hill to Durham along a commuter-friendly back road. The car in front of me suddenly turned its hazard lights on and stopped. Luckily I was some distance and I too turned my hazard lights on and stopped. Cars that were behind me were quite far off and also came to a stop behind me. I was about to get out to see if I could help, when a man jumped out of the car in front and went to pick up something from the road. He emerged holding a turtle by its shell and started walking to the ditch with the obvious intention of helping to speed the turtle’s road crossing. As we were all admiring this act of grace and how it had saved the turtle’s life, the turtle seemed to be of a different opinion. It turned its head and tried to snap at the man’s wrist. Startled, the man quickly finished his task of escorting the turtle, and I laughed to see the relief on his face.
Your customers are like the turtle. You think they think like you. Unfortunately, they don’t. And this is the biggest marketing myth that is being propagated these days. How often have you heard: “Treat your customers like you would like to be treated.” No. The market is never homogeneous. The best customer service is when you treat your customers as they would like to be treated. I can’t emphasize that. Imagine a hotel manager who arranges feather pillows for you in your room before you check in. Great thought! But what if you are allergic to feathers, or if, like me, you simply hate the thought of some poor bird’s feathers under your head? Seth Godin has an interesting take on this.

I’m reminded of a story–perhaps fictitious–from history. When Alexander came to conquer India, he faced the mighty king Puru (“Porus” as the Greeks called him). Puru had a huge army with terrifying elephants. Alexander’s victory on the banks of the river, Jhelum–the Greeks called it Hydaspes–was hard and long-fought (some say the victory was so Pyrrhic that his army rebelled, and Alexander had to go back without conquering the rest of India). The legend goes that when Puru was brought before Alexander, Alexander asked him, “How would you like to be treated?” Puru replied, “Like a king.” Impressed, Alexander let him retain his kingship.

Firms had better start asking their customers, “How would you like to be treated?” instead of making stereotypical assumptions. This used to be difficult in the past but today’s technology allows us to do this. But more than the ability to do this perhaps, one needs the courage to do it.
Vivekin’s Pay WYVAYCan pricing policy (in a sense) asks–”What would you like to pay?” I hope other consulting firms follow this example.

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How Mahatma Gandhi taught ethical intelligence

Ethical intelligence reflects the leader’s ability to recognize and act upon the ethical dimensions of an issue. It is not about the ethical beliefs of a leader or how ethical you perceive the leader to be. It is also not about doing “good work” (as in “the ethical mind” that Howard Gardner of Harvard has proposed in Five Minds for the Future). Rather, this aspect of intelligence reflects how capable the leader is of recognizing and understanding the ethical implications of a new situation. Ethical leadership intelligence makes the difference between why somebody like Mahatma Gandhi or Abraham Lincoln is called a great leader and why somebody like Hitler is called a demagogue.
Great leaders display the ability to lift the question of ethics from that of the personal, and transform it into a question that reflects and impacts the ethics of all of humanity. For a demonstration of how to practice this intelligence, watch Richard Attenborough’s movie, Gandhi. Toward the close, there is a scene that depicts Calcutta (now Kolkata) in the immediate aftermath of Hindu-Muslim religious riots that followed the partition of India. Gandhi went on a fast-unto-death if the riots did not end. The scene that I mention shows that the riots have stopped, and rioters are going by the house in which Gandhi lies. They are throwing down the arms they used in the riots in front of Gandhi who lies on a cot. Suddenly a Hindu man rushes toward Gandhi’s bed, throws a piece of bread at Gandhi, and orders him to eat it; the man then breaks down and tells Gandhi of how he killed a small Muslim boy because the Muslims killed his young son. Gandhi’s answer: “Adopt a Muslim boy the same age as your son, and bring him up as a Muslim.”

Watch the clip:

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Warren Buffet, Goldman Sachs, & Leadership Intelligences

Today’s Wall Street Journal reports that as recently as in March, Warren Buffet wrote to his shareholders expressing disdain for Wall Street firms, “You only learn who has been swimming naked when the tide goes out–and what we are witnessing at some of our large financial institutions is an ugly sight.”
And yet, today’s WSJ reports that Buffet will invest $5 billion in Goldman Sachs, and also has an option to invest $5 billion more at a later time. What is Buffet’s rationale?
Actually, Buffet is just demonstrating his great leadership skills. In particular, in the context of leadership intelligences, Buffet’s decision reflects his “analytical intelligence”. Think about it. Why Goldman and not any other company? Why now and not anytime sooner or later?
Here are a few thoughts: About timing. Buffet knows that the financial markets need a shot in the arm, and as a thought leader, he is in the best position to provide that much-needed confidence by investing in a company. About Goldman. While not safe from the crisis in the financial markets, Goldman has avoided any mortgage-related crisis. And although profits have been declining, the firm has been steadily showing a quarterly profit. Now, with Buffet’s investment, Goldman can raise additional money from selling stock to the public. The boost Goldman is getting has already been demonstrated in the 6.5% uptick in its share price yesterday. The WSJ article notes that the deal “will give Mr. Buffet a healthy stream of cash and potentially ownership of 10% of Goldman.” Win-win. And of course, a desperately-needed vote of confidence in the financial institutions.
Isn’t that leadership?

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Wilbur Ross: NPR Interview

NPR interviewed investor Wilbur Ross this morning. During the interesting interview, Ross revealed that he had tried to be a creative writer in his student days. What had he found useful from his creative writing training, however short-lived that was, to his work today as he takes over and revived failed companies? His answer–not ideation or any such creative thing–but “analytical skills” (!) When you have 1000 words to write a piece in, he said, you have to “organize your thought processes, organize your questions, and think through what your observations were.” He went on to say how these abilities are useful in any kind of activity that calls for analytical abilities, and especially in his work in the private equity space.

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Innovation Value Chain

Along the lines of Michael Porter’s value chain in strategy analysis, it is possible to conceptualize an innovation value chain. Often companies get stuck in a rut by confusing innovation with ideation and not moving beyond idea generation.

Recently, researchers at INSEAD have pointed out that “The [innovation value] chain starts with idea generation, but then moves to prioritising and funding ideas, to converting those ideas to products and finally to diffusing those products and business practices across the company.”

It is interesting how this maps into the leadership intelligences framework.

Stage in Innovation Value Chain

Leadership Intelligence

Idea Generation

Inventive intelligence

Prioritizing and funding ideas

Analytical intelligence

Converting ideas to products

Operational intelligence

Diffusing products and business practices

Communicative intelligence

The problem with an innovation value chain is that it can mislead us into visualizing the innovation process as linear, proceeding in sequential stages, whereas in reality, the stages messily tumble into each other–back and forth. (The innovation value chain reminds me of the woefully inadequate “waterfall model” in software development.) Further, another danger is that such stepwise conceptions of innovation make it easy to compartmentalize the organization into hermetic silos by assigning ideation to one department, budgeting to another, and so on. In the leadership intelligences framework, a focus on the abilities needed for innovation rather than on processes and stages, allows us to break free of sequential mindsets and compartmentalized organizations. In this sense, the leadership intelligences framework helps to structure chaos, to provide the “disciplined disorganization” necessary for innovation.

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