Time for change in Islamic finance

Reading the article Why are we seeing so many corporate scandals?  
By Prof. Dr. Amit S. Mukherjee  I liked the questions that Prof. Amit raises.
The queries resonated with the planner in me and I found them to be interesting. I say interesting because, whilst the erosion of trust has impacted quite heavily on the financial sector and probably enabled the growth of technology based financial solutions or FinTech, these questions are very valid across all industries including the Islamic finance industry.

Here are the questions Prof. Dr. Amit raises:

  1. Have we rethought how we work in a digital age when work increasingly requires large doses of unseen discretionary effort?
  2. Have we redesigned processes and structures to surface problems before these become crises?
  3. Have we allowed the free flow of key information to distributed decision makers?
  4. Have we created collaborative, learning-focused cultures?

Looking at the environment, in which the Islamic finance industry is operating, currently makes these questions quite critical, from an organizational perspective, with regards to sustainability of the various business models
in operation.

There are three key issues that get highlighted when one runs the above mentioned questions through business continuity thinking.

Starting with talent management & development and its allied areas of
learning & development, given the necessity of managing increasing numbers of Millennials, entering the workforce, along with providing gender diversity and equality coupled with ensuring professional development of the existing employees, the need to develop and incorporate digital and its various usages in work and its processes assume significant importance.

This leads into the second key issue of leadership competency.

On one hand erosion of trust, in financial institutions is at an all-time high, on the other technology in the form of social media has made the world a very small place where real-time personal engagement and word-of-mouth recommendation is given preference over any corporate statement or communication. This has created a need for a different type of leadership competency requirement. The control & command leadership style of yesteryear simply does not work in a world where knowledge and technology are driving the comparative advantage for an organization. There is a serious need for industry leadership to be empathetic and transparent in order to create engagement with society and employees simultaneously in order to develop social capital for the organization, from a business continuity perspective.

Thirdly is the issue of technology and its impact.

FinTech, in its various forms, has already impacted the conventional financial sector greatly by disrupting the historical business models. The driving force behind this technology usage and acceptance is the development of the smart phone technology and the need for the layman to have direct and quick access to finances. Add to this the developments taking place in the Islamic economy industry verticals, such as the increasing demand for innovative financing by the start-ups and entrepreneurial ventures, and you have a potential scenario of the Islamic finance industry losing out on big-time growth opportunities as these opportunities will get fulfilled by new financial start-ups who are agile and able to collaborate faster, as maybe required, with the changes in the regulatory landscape.

Whilst asset growth, increase in Islamic social responsible investment and convergence of ESG and Islamic finance are occurring  we, the individual organizations of the  industry, need to create strong sustainability and continuity plans to protect ourselves from further economic upheavals which are still bound to happen. 

Quoting Dave Ulrich‘Wars are won through organisation and you have victory by being in it together.’

This can only happen when we focus on people—employees, customers and partners—and look at the experience we deliver to them and the social issues we solve in order to create and retain engagement and build social capital in our mission for business sustainability.

 

 

 

Are organizations really focused on learning and developing the talent pool that they have?

For any organization the competitive edge, in today’s business environment, comes down to the culture and the strategy it has. Culture is developed through the employees or talents an organization has and not through its products or services.

In the educational sector one would assume that this aspect of organizational development would be a given based on the premise that the core business of any educational institution is to develop talent that makes a significant impact in business. Yet, is this really taking place?

In the usual for-profit organizations, where profitability is the end objective of all activities, learning is often lost in the daily rush of what needs to get done. Just to clarify learning and training are two different things.  As a result of not having learning in focus organizations end up losing sight of developing its critical asset—people.

Do Islamic finance educational institutions have the same issue?

Having now spent over five years in this sector my opinion is that the Islamic finance educational institutions have the same malaise as their regular educational counterparts as well as their commercial industry counterparts. The malaise is one of continuing to do what has been done and keep hoping the results are different.

The Islamic finance industry now has a fair number of tech based education service providers in addition to the usual brick & mortar institutions. All of which have come about in the last decade and a half due to the growth of this industry. Yet none of these organizations are, as yet, able to showcase the employee learning benefit that is directly co-related to the institutions business. Whilst both education and professional training requirements, in the industry, has grown there still lacks a concise talent development plan based on learning development that comes through the job role. The 2015 report—
The Human Capital Challenge: Shaping the Future—by Simply Sharia
Human Capital
is an eye-opening read on this context.

Is it difficult to have learning-at-work in the educational institutions?

The environment, for educational institutions, has undergone drastic changes in the past six to eight years. Tech adoption has impacted on the behaviour and on the expectations of value in the educational sector. This directly impacts the business models employed by educational institutions and its service offerings that it puts out. On the former probably the existing business models aren’t, anymore, able to deliver to the demands of the environment today. On the latter the Islamic finance industry, as a whole including its ancillary services, of which the education sector is one, has yet to take on board these dynamics.

The net result is that there has been a lack of innovation, in developing and delivering education services that aid the industry in going forward and creating significant developments that in turn become the content input for learning, both at an educational level and in professional development.  This is not to be mistaken with the plethora of technical training programmes available for industry professionals and their educational counterparts. The lack of innovation has created a void in the learning development of professionals in developing innovative idea, services and process that directly have significant societal benefits.

Historically all it has created is employee turnover with the same people moving around within the organizations in the industry in a region. As employees leave one organization and go into another, unfortunately, their skills sets and cultural behaviour remains as it were.  They leave simply due to lack of recognition, adequate reward and self-development. Or they remain and start becoming a drag on the organizations efforts in moving forward.

As employees leave they seek re-employment, within the sector with the same skills and process management and leadership techniques. The recruiting organizations end up filling in their manpower requirement based on archaic functional job requirements and not based on aptitude, attitude and leadership competency which are based on their business strategy. End result is that the employee obtains a slightly higher trades salary and the organization fills in its headcount with the hope that the outputs would be obtained.

Alas in today’s environment is this a sustainable long-term solution?

Have the courage to disrupt the norm

The fear of attempting the new has to be harnessed and the only way to do so is to acknowledge it and collaborate with a win-win end benefit in mind. The commercial organizations of the industry and educational institutions have to combine in order to create a learning environment at both places with the single-minded objective of developing their respective talent pool. Without this they would soon find they are unable to attract quality employee talent.

Perhaps I am being harsh in my assessment.

In my end of the world, as I scan the region for examples of innovative, home-grown, talent focused strategic initiatives that clearly demonstrate a focused business continuity plan in play; I find significant examples in the core STEM sectors. Examples that create strong learning environments for employees and through which innovative initiatives are generated as services for the organizations customers.

But in the Islamic finance education sector there seems to be a bit of vacuum
where such developments are concerned.

Organizations that operate in the higher education and professional development sectors have a significant responsibility in developing and providing a learning environment that clearly aids its employees and customers to provide innovative approaches to their respective businesses.

Without accepting, acknowledging and acting on this responsibility an organization cannot expect to be successful and sustainable in the long run.

 

 

Do learning and development strategies have a part in business strategy?

Visual Courtesy: http://pt.slideshare.net/
Visual Courtesy: http://pt.slideshare.net/

Whilst most organizations have learning and development units the question I’m raising is:
Are organizations really focused on learning and developing the talent pool that they have?

In today’s business environment the competitive edge, for an organization, comes from its culture and its talent. The latter is at the core of success
an organization can achieve.

In the usual commercial organizations, where profitability is the end objective of all activities, learning is often lost in the daily rush of what needs to get done. Resulting in the organization losing sight of developing its critical asset—people.

Without planned development of its people an organization cannot expect to be successful and sustainable in the long run.

What triggered this post is this article:

Continual Learners And Learning Organizations: A Two Way Street Or
A Dead End

It has four simple ideas which I find simple yet oft forgotten in the hustle and bustle of daily work.  

Being stimulated from this article, in this post, I’m taking a look at how the education and professional development sector approaches learning and development in their business strategy.

Is there a lack of focus on learning and development of talent in the higher education and professional development sector?

After all academic institutions, by their very nature, are meant to have an environment focused on learning and development.  If this is true it would mean that such institutions would put talent and their own knowledge thought leadership front and center of their business strategy.  

Or is it that the environment is only created for the students the institutions
cater for?

Looking around one sees the necessity of the academic institutions to operate more and more as commercial entities in order to ensure financial sustainability. That, however, does not absolve the institution from losing focus on its talent and in turn on learning and development. Such a loss of focus would be disastrous as its impacts on the reputation of the institution.

Reputation is a key driver of business continuity for any academic institution.

Such reputation is built through strategically identified initiatives all of which should tie back to a central learning and development focused strategy impacting on the people of the institution and their output. By having clearly identified quality benchmarks of the initiatives the institution can ensure business continuity and commercial sustainability.

A clear focus such as this will lead to the institution developing a competitive edge and become an institution of choice by potential students, the industry it serves as well as the academia.

By investing in its people and its knowledge base strategically, organizations involved in the education and professional development sectors,  can see the positive impact of specific activities in terms of reputation and bottom-line.

 

 

The relationships you build provide the organization with strength

courtesy: www.pinterest.com
courtesy: http://www.pinterest.com

Last week I was catching up with my eldest son and a couple of his friends all of whom are millennials. One of them asked me –
how can we contribute, to the organization, as employees outside our functional roles. This post is a result of that chat.

For an organization success is measured by differing metrics depending on the nature of business and industry. One common thread is the fact that employees make all the difference between success and failure due to the extent of their engagement and involvement with the organizational goals.

Whilst employee engagement is the responsibility of organizational leaders, employees, too, have an individual responsibility in developing healthy relationships with their co-workers.

Whilst an organization may have product or service advantages, innovative patents and technology in use, at the end of the day the strength of any organization is in the relationship its employees have within themselves.

It’s the people who make all the difference.

Developing strong and rewarding inter-personal relationships come about from the way we are socially conditioned to make friends, network and influence, communicate and give value to each other. This is where communities and groups emerge from.

So as an employee how do you go about creating beneficial relationships?

  1. Interact: Use the official events, such as team building sessions, training, sports, employee parties and community services, to reach out and connect with employees from other divisions. In large organisations one of the key issues is that people don’t know who does what in which divisions. So provide your fellow colleagues a-face- to- a- function so that they know they can reach you when they have the need.
  2. Volunteer: Step up and volunteer for projects that are not in your functional area. These project teams, usually, are set up to deliver key goals for the organization and is a great way to:
    — Get yourself to interact with the organizational leaders and show       additional initiative that goes into your annual performance.
    — Helps you identify possible mentors and work functions that you may want to move into in order to grow within the organization.
  3. Talk: In any group meetings there are always issues being discussed. Put aside your fears of looking stupid, in front of your bosses and peers, and speak up. Make sure you understand the context, of the issue at hand, and then put forth your suggestion.
    On a personal level, when you see a fellow colleague from a different unit at any time of the work day, stop for moment and ask how he or she is and how their families are.  Share a minute or two connecting on common personal areas.  Be careful when you do this. Do it meaningfully and not in passing.
  1. Help: If another colleague, either from your own unit or otherwise requests for information or assistance, help them. Not only would you be earning respect and gratitude of your colleague but you’ll be communicating to the leaders that the interest of the organization is what matters to you.

 

 

I’d be happy to know if this post is useful to you.  Do share your views on ways in which you have nurtured  internal relationships for the benefit of the readers.

Leadership Justice League style

DC Comics has just rolled out the Justice League Part One trailer at the Comic Con and you can view the trailer below and get the details of key characters here:

To me this superhero team movie has some very interesting leadership cues that’s quite relevant to the business environment today. Here are my top 4 cues:

  1. Leadership Vision: One man–Bruce Wayne– recognizes the threat and identifies the resources (meta-humans) that would be required.  Is it his 20 years + crime fighting experience or sheer intuition? Either way this is vision or the foresight to see what’s coming in the future. In the business world the CEOs are meant to show this skill.
  2. Communication: Note how Bruce W goes about searching and communicating the purpose (of negating the potential threat) in recruiting the team he feels can do the job. In the business world having such clarity of thought aids leadership in touching the hearts (along with the mind) of their potential  and existing employees.
  3. The Team— Batman, Wonder Woman, Superman, Cyborg, Aquaman, Flash (as starters)– each with a unique superhuman skill come together for a common cause.
    Sound familiar?
    In the business world every organizations has a purpose.  No it’s not making-profit! It’s a bit more than that. It’s got several terms–Social Responsibility; Community Outreach; Engagement etc. Whatever be the term, the purpose of any organization (should be) is to provide value in its offering to people in order to make their lives better.

Often such purpose and the dollar value target gets interchanged!

Thus the goal becomes a numerical item devoid of any emotions attached to it. And this impacts how the organization engages with their team. Instead of creating teams based on whose skills are best suited to the purpose, we often end up selecting teams based on who is best suited to bring in the numbers.

4. Purpose— In the movie each of the superheroes have a key purpose with regards to using their superpowers to aid the team in saving the world. In the business world this is often where the gap occurs!  Purpose and value is often not communicated with clarity.

We get so much entertainment from our superhero characters and whilst the kids look to emulate them, as matured and responsible adults, can we looks at taking the excellent leadership cues our heroes show to us into our daily lives?

 

 

Leadership provides stamina and energy to an organization to be sustainable

visual courtesy www.pinterest.com
visual courtesy http://www.pinterest.com

 

We all know the three key ingredients that go into making a healthy organization:

  1. Cash Flow—Liquidity is the life blood of any business. Having the necessary cash flow enables a business to invest and grow.
  2. Employee Engagement—Motivation leads to productivity & efficiency. Employees represent the  brand and their behaviour impacts on the output and on the business revenue and reputation. Employees are the heart of any business.
  3. Leadership— Leadership provides purpose and strategic clarity of vision of the business.

Whilst cash flow is the blood and employees are the heart, leadership acts as the vitamin for any business to give it the much-needed energy, immunity and growth.

As a business owner or a corporate executive we give  lot of attention to the first ingredient—Cash Flow. Yet we neglect the other two– employee engagement & leadership— and oft take these for granted. 

Without giving these two important areas the due attention they deserve how do we expect our businesses to be healthy?

  1. Make Leadership priority number 1.  The core of a healthy business starts with leadership. Providing the right leadership aids in getting the employees engaged and involved with the purpose of the organization.
  2. Employee engagement occurs when the employee sees a clearly defined benefit– Provide clarity of role and alignment of the functional role to the purpose of the organization. Thereby recognizing and appreciating the employee and aiding in developing effective engagement. 

Engaged employees are more productive and deliver a far better customer-experience. This results in a high cash flow for the business through sales, repeat sales and higher customer satisfaction.

So looking to grow your business?

The starting point is to study is not the new market opportunity or the pricing or the cost-benefit analysis. The first place is to look at the leadership of the organisation and evaluate if the leadership is:

  1. Being effective
  2. Having strategic clarity

These two factors are critical.

Leadership is the link to having engaged employees.

In any organisation you need to have engaged employees to generate growth and sustainability. Without the employees being engaged a business simply exists up until a point where the cash flow is severely affected resulting in the closure of the business.

The way to get employees engaged is to ensure that the leader is able to clearly articulate and align organisational goals with direct benefits that impact the employees. Answering the ‘what’s in it for me?’ question brings about an empathetic connect between the employee and the leader. That aids in motivating the employee to perform.

This is why leadership is vitamin for an organisation!

Leadership is the, all-pervasive and all-encompassing, element that provides a business with the required stamina and energy to be a sustainable brand.

Every moment of your business has a fresh beginning

Visual Courtesy: www.successimg.com
Visual Courtesy: http://www.successimg.com

Doing the same thing day in day out brings about routine. Whilst a routine is great in generating efficiency, the flip side is that it makes us lose lateral thinking or what I call joining the strategic dots.

From time to time it’s helpful to simply put a bit of emotional distance between the daily needs of the business and our functional role in order to get some
blue-sky thinking going.

What this does is that it helps generate the links in joining the dots between strategy and tactics to result.

As T.S; Elliot said,” Every moment is a fresh beginning”.

In our present day world of information overload, constant connectivity and erratic business and economic climate, the times can be quite overwhelming. More so the need to have some off or down-time to have clarity of thought and come back with a fresh beginning.

Whether we are running our own business or we are a corporate manager the commonality is ensuring success in our strategy and daily tactics in business.

In this process you need to continually review your operations strategically and refresh your business strategy.

Here’s 5 ways to give your business that fresh beginning.

  1. REVIEW: Undertake a simple review of how the business operations are performing against plans. Are the specific activities bringing the desired results or not?
  2. EXPLORE: The areas of operations that are not delivering results, look at process, strategy and tactics initiated. Is something missing? Would you do something differently? Explore other solutions that may not seem to be the norm, but probably could have significant impact in a longer term.
  3. NEGOTIATE: In any organization, often times, there is a conflict between the strategic direction and the necessary tactics required. Having reviewed and explored options that may be more effective, you would have to present a probable solution tactfully. You’d have to influence your senior team in order to ensure their compliance so as to be able to deliver on the solution.
  4. EXECUTE: A strategy is as good as its execution. Sometimes, the best plans fail due to bad execution.  So when executing a new solution, keep a close eye on the input and reactions and be adept and flexible enough to react and change as you and your team carry out the execution.
  5. WIN: Finally, get ready to win and enjoy the success that comes in. Throughout the process, it’s crucial that you keep a positive attitude that communicates confidence to your team and your clients/customers. Such positivity would rub off during negotiation and execution and bring you achievement of your targeted plans.

I’d be delighted to know how helpful you found this post for your work. Do share your comments and tips.