Most U.S. investors see putting money into alternative-energy companies as both potentially lucrative and a way to support the environment. But while many might see opportunity, few are taking it.
A recent survey by Calvert Group of Bethesda that coincided with the establishment of an alternative-energy fund found that while about 85 percent of investors believe there is money to be made from investing in areas such as solar power and wind power, only about 20 percent of investors have broached the subject with a financial adviser.
Calvert, which manages a big chunk of its money under precepts often referred to as "socially responsible investing," is hoping investors will start acting on their beliefs and invest in the Calvert Global Alternative Energy Fund.
"It really shows we're at a tipping point for public concern about this," said Paul Hilton, director of social investment strategy at Calvert, referring to the poll of nearly 1,100 investors conducted by the firm Opinion Research.
"There have been a lot of people coming to us because of concerns about climate change. The number one reason why investors are with us is because they care about environmental issues."
He said that $5 billion of the company's $15 billion in assets under management are invested using socially responsible investing principles, which, for example, espouse notions of environmental stewardship and labor practices that don't exploit workers.
But while investors might feel good about such investing, there are potential pitfalls.
"It is a long-term play," Hilton said. "There is no question that within this area you're going to see some volatility in anything this specific.
Investors should be aware of that.
"What's exciting is you can look at other times in history when there has been a major evolution in how things are done," Hilton said. "We can see that these technologies are competitive in a way that they haven't been before."
Jeff Tjornehoj, an analyst at fund tracker Lipper, sees reason for investors to remain cautious.
"There's certainly some growing investor interest in it," he said. "I think they're grabbing a lot of the investors who are interested in alternative energy because energy prices are high right now."
Last week light, sweet crude topped $70 per barrel on the New York Mercantile Exchange for the first time since August amid tight U.S.
supplies.
Tjornehoj questions, however, whether interest will remain should prices recede. He also said investors should remain vigilant when considering any investment that appeals to them for reasons beyond the financial implications.
"If when you see this fund you have a strong emotional response, that should warn you off of this as an investment idea until you have a better sense of why you would want an alternative-energy portfolio."
Tjornehoj said that if prices for energy and commodities in general remain at higher levels, it could signal an important change for investment opportunities. "You might look back on this Calvert fund as the beginning of something very lucrative," he said.
John Quealy, an analyst who covers alternative energy for Canaccord Adams, contends opportunities for the sector are increasing.
"A lot of funds have done well investing in the theory 'Get clean and then the profits will come,' " Quealy said. He said investors should consider their tolerance for risk; much opportunity from alternative energy could come from finding ways to conserve energy not just finding new sources.
"We're seeing this tipping point of industry really grabbing hold from a philosophical-regulatory standpoint that says, 'I need to prepare my business today for a carbon-constrained environment in five years,' " he added.
Thursday, July 12, 2007
How's Conrad doing? He's glad you asked - SANDRA RUBIN
Before the jury even started deliberating in the Conrad Black trial there was already one clear winner: the law firm of Perkins Coie. In a masterful demonstration of the power of marketing smarts, the Seattle-based firm used the media baron's 15-week trial as a springboard to brand its young Chicago office.
It's a lesson that Canadian firms looking to build in a new market, or differentiate themselves in an old one, might want to heed.
With news organizations from around the world descending on Chicago, Hugh Totten, a litigator at Perkins Coie, sat down with Lori Anger from the marketing department to figure out how to capitalize on the situation.
Mr. Totten is the partner in charge of lateral recruitment at the five-year-old Chicago office, and he knew the office needed more profile to attract the kind of lawyers - and clients - it wants.
Perkins Coie is a blue-chip West Coast firm that acts for Boeing, Microsoft, Starbucks and Amazon. It opened in Chicago after Boeing relocated there. But Perkins Coie is not a brand name in the east, and cracking the tight Chicago legal market has proven a bit of a slog.
It's a dynamic all too familiar to Canadian firms such as Osler Hoskin & Harcourt in Calgary, Blake Cassels & Graydon in Montreal, and Macleod Dixon, Ogilvy Renault or Bennett Jones in Toronto.
So Mr. Totten and Ms. Anger developed a strategy to get the Perkins Coie name out there. Mr. Totten would go to the courthouse for a couple of hours every day to monitor the trial and offer himself up to reporters looking for comment on the latest developments.
"I do mostly commercial litigation and this trial struck me as pretty close to the kind of stuff that I do - lots of documents, and complex transactions that have to be explained to the jury," Mr. Totten says. "I work literally right next to the courthouse so I was able to go over on a daily basis and see what was going on. I never really anticipated the response that I got. It's been amazing."
To be fair, Mr. Totten had a couple of advantages. For starters, he is a former city editor of Purdue's The Exponent, his college newspaper, so he's comfortable winging it with reporters. And he realized most of Chicago's entrenched corporate law firms wouldn't be able to speak to the media about Lord Black's trial because they were acting for one of the parties.
So he took the plunge and set aside about 100 billable hours to monitor the trial and talk with reporters during breaks or at the end of the day. He says he doesn't know of any other large corporate law firm that has done anything similar. But he and Ms. Anger thought it was worth a try.
Good hunch. There were about 400 accredited reporters from around the world and a surprising number, hungry for interpretation of the day's events, regularly turned to Mr. Totten for his read. He figures he gave well over 100 interviews and was quoted by news outlets ranging from the Financial Times of London and The New York Times to the Chicago Tribune, The Scotsman, Reuters, Bloomberg, CBC, CTV and even the Australian Broadcasting Corporation.
And each time he was quoted, Perkins Coie's name - and the fact it has a Chicago office - were right up there with him.
While some senior partners might be loath to take themselves off the billing track for such a whack of time (100 hours could represent $80,000 of docketed time), Mr. Totten is convinced it more than paid off.
"I doubt that 100 billable hours comes anywhere close to the value of the publicity we have received," he says. "My own personal viewpoint is it's been very successful for us. We'll have to wait and see how my partners review me at the end of the year."
He shouldn't have any trouble producing testimonials for the compensation committee. He says there has been an enormous amount of feedback. "I've received many, many e-mails from people in Chicago saying, 'Wow, you're just getting great publicity here. Keep it up. Wish we could do it ourselves.' I know my partners here are very happy with what's going on."
They should be. Mr. Totten's marketing experiment was so successful, the National Law Journal wrote a story about it. It's one that should resonate in Canada.
Faced with a shrinking corporate client base, top-tier Canadian firms realize they have to steal business from competitors to grow market share. One way to do that is to differentiate themselves, positioning the firm as dominant in one or two key areas. The other is to break into new geographic markets and try to pick off existing business.
Marketing is key either way, says Lise Monette, the chief marketing officer at Ogilvy Renault.
"Your clients need to know you're there, so a visibility campaign is important - particularly for a firm like ours, which is somewhat of a new entrant on the [Toronto] market," she says. "You won't be considered on a [request for proposal] if they don't know you're there, so marketing plays a huge role. You're always looking for ways to be innovative, but it's a cluttered market and it's not always that easy to do."
Richard Stock, a Vancouver-based partner with legal consultants Catalyst Consulting, says Canadian firms are so busy right now that many senior partners don't see the need for marketing and branding. But he predicts they will, once the bull market comes to an end, and he applauds Mr. Totten's initiative.
"Any time you can raise the visibility in a crowded field it is a great idea - especially if you work in an office away from the mother ship," Mr. Stock says. "This kind of accelerator is terrific. Frankly, I don't see a lot of such initiatives."
It's a lesson that Canadian firms looking to build in a new market, or differentiate themselves in an old one, might want to heed.
With news organizations from around the world descending on Chicago, Hugh Totten, a litigator at Perkins Coie, sat down with Lori Anger from the marketing department to figure out how to capitalize on the situation.
Mr. Totten is the partner in charge of lateral recruitment at the five-year-old Chicago office, and he knew the office needed more profile to attract the kind of lawyers - and clients - it wants.
Perkins Coie is a blue-chip West Coast firm that acts for Boeing, Microsoft, Starbucks and Amazon. It opened in Chicago after Boeing relocated there. But Perkins Coie is not a brand name in the east, and cracking the tight Chicago legal market has proven a bit of a slog.
It's a dynamic all too familiar to Canadian firms such as Osler Hoskin & Harcourt in Calgary, Blake Cassels & Graydon in Montreal, and Macleod Dixon, Ogilvy Renault or Bennett Jones in Toronto.
So Mr. Totten and Ms. Anger developed a strategy to get the Perkins Coie name out there. Mr. Totten would go to the courthouse for a couple of hours every day to monitor the trial and offer himself up to reporters looking for comment on the latest developments.
"I do mostly commercial litigation and this trial struck me as pretty close to the kind of stuff that I do - lots of documents, and complex transactions that have to be explained to the jury," Mr. Totten says. "I work literally right next to the courthouse so I was able to go over on a daily basis and see what was going on. I never really anticipated the response that I got. It's been amazing."
To be fair, Mr. Totten had a couple of advantages. For starters, he is a former city editor of Purdue's The Exponent, his college newspaper, so he's comfortable winging it with reporters. And he realized most of Chicago's entrenched corporate law firms wouldn't be able to speak to the media about Lord Black's trial because they were acting for one of the parties.
So he took the plunge and set aside about 100 billable hours to monitor the trial and talk with reporters during breaks or at the end of the day. He says he doesn't know of any other large corporate law firm that has done anything similar. But he and Ms. Anger thought it was worth a try.
Good hunch. There were about 400 accredited reporters from around the world and a surprising number, hungry for interpretation of the day's events, regularly turned to Mr. Totten for his read. He figures he gave well over 100 interviews and was quoted by news outlets ranging from the Financial Times of London and The New York Times to the Chicago Tribune, The Scotsman, Reuters, Bloomberg, CBC, CTV and even the Australian Broadcasting Corporation.
And each time he was quoted, Perkins Coie's name - and the fact it has a Chicago office - were right up there with him.
While some senior partners might be loath to take themselves off the billing track for such a whack of time (100 hours could represent $80,000 of docketed time), Mr. Totten is convinced it more than paid off.
"I doubt that 100 billable hours comes anywhere close to the value of the publicity we have received," he says. "My own personal viewpoint is it's been very successful for us. We'll have to wait and see how my partners review me at the end of the year."
He shouldn't have any trouble producing testimonials for the compensation committee. He says there has been an enormous amount of feedback. "I've received many, many e-mails from people in Chicago saying, 'Wow, you're just getting great publicity here. Keep it up. Wish we could do it ourselves.' I know my partners here are very happy with what's going on."
They should be. Mr. Totten's marketing experiment was so successful, the National Law Journal wrote a story about it. It's one that should resonate in Canada.
Faced with a shrinking corporate client base, top-tier Canadian firms realize they have to steal business from competitors to grow market share. One way to do that is to differentiate themselves, positioning the firm as dominant in one or two key areas. The other is to break into new geographic markets and try to pick off existing business.
Marketing is key either way, says Lise Monette, the chief marketing officer at Ogilvy Renault.
"Your clients need to know you're there, so a visibility campaign is important - particularly for a firm like ours, which is somewhat of a new entrant on the [Toronto] market," she says. "You won't be considered on a [request for proposal] if they don't know you're there, so marketing plays a huge role. You're always looking for ways to be innovative, but it's a cluttered market and it's not always that easy to do."
Richard Stock, a Vancouver-based partner with legal consultants Catalyst Consulting, says Canadian firms are so busy right now that many senior partners don't see the need for marketing and branding. But he predicts they will, once the bull market comes to an end, and he applauds Mr. Totten's initiative.
"Any time you can raise the visibility in a crowded field it is a great idea - especially if you work in an office away from the mother ship," Mr. Stock says. "This kind of accelerator is terrific. Frankly, I don't see a lot of such initiatives."
Monday, July 9, 2007
Effigi aims high with expansion - MARINA STRAUSS
While most Canadian apparel companies are disappearing, a Montreal-based producer of mid-priced trendy fashions is mapping out an ambitious expansion with a fresh infusion of money from a group of private equity investors led by Genuity Capital Markets.
Effigi Inc., which sells brands such as Tag and Gagou Tagou to Costco, Wal-Mart and other chains, makes a wide array of clothing displayed in "shops within shops."
The company's founder and creative force, chief executive officer Sylvain Veronneau, wants to sell his concept to retailers in the U.S., Europe, Australia and the Middle East.
His aim is to transform Effigi's brands into labels as common as Nike or Tommy Hilfiger, outfitting shoppers from head to toe, literally.
"It's been a long journey for us to find the right partner and financing," Mr. Veronneau, 43, said in an interview.
"I spent 17 years of my life doing what's right for this company ... Genuity wants to help me do exactly what I'm doing now, which is expand the project and bring it to another level."
About two years ago Effigi launched bathing suits and outdoor wear with ultraviolet sun protection built into the fabric.
This fall it will roll out underwear with a moisturizing agent in the fabric that it says provides a cooling effect. It put oversized zippers and buckles on its children's snowsuits so that tiny fingers could more easily make adjustments.
In some ways Mr. Veronneau is following a similar path taken by Chip Wilson, founder of Vancouver-based Lululemon Athletica of yoga wear fame, industry observers said.
Both men created brands in Canada with a local following, and both are now trying to expand globally on the strength of their designs and reputation.
In late 2005, Lululemon got a $108-million investment from two private equity firms. Now it is preparing to raise about $200-million in an initial public offering.
Some industry experts are predicting that Effigi will also go public in an IPO.
"Effigi is very focused," said Elliot Lifson, vice-chairman of Peerless Clothing in Montreal and also president of the Canadian Apparel Federation.
"They have found their niche and they keep growing. They're aggressive ... It's very similar to what Chip Wilson did."
Mr. Veronneau, who is the largest shareholder, said he has no set plans to go public, although he didn't rule it out either.
He would not disclose the company's revenues nor the size of Genuity's investment, but said they were "substantial."
Officials at Genuity declined to comment.
Effigi has grown since it started in 1991 to 250 staff from 13.
It produces about 60 per cent of its products overseas, a far cry from everything being made in Quebec at its inception.
Genuity's investment - and vote of confidence - in Effigi underlines the importance for apparel makers and retailers to build their business around brand names, said Rob Moore, who is a consultant and former Hudson's Bay Co. vice-president.
"You can be a more valuable player if you have brands that have a relationship with the demographic or customer base you want to reach," Mr. Moore said.
He also drew a parallel between the founders of Effigi and Lululemon.
"They're driven by the vision of what the product is and what the brand stands for," he said.
"They have a clear vision of how they create their products for the customers they serve."
Effigi, which has branched out into home-decor items, has taken a page from more upscale fashion powerhouses such as Polo Ralph Lauren.
For years they have installed in-store boutiques in department stores. Now Mr. Veronneau wants to take the concept to the masses.
Already Effigi brands are sold at stores in 18 countries, including Australia.
Down Under, the company's bathing suits, with sun protection in the fabric, have taken off, benefiting from a heightened concern about the dangers of skin cancer, he said.
With the new cash infusion, Effigi will try to strengthen its logistics to shave costs and ensure that goods get to their global destinations on time, he said.
He recently hired a former HBC executive, Peter Kenyon, as chief operating officer to lead the transition.
Techno-wear
The Montreal-based fashion producer works with its suppliers to come up with new ideas to respond to shifting customer needs. It strives to make high volumes of the goods, taking advantage of economies of scale to keep prices low.
Bathing suits and outdoor wear have ultraviolet sun protection built into the fabrics.
Snowsuits have oversized zippers and buckles to help children adjust the clothes themselves.
This fall Effigi will launch underwear with a moisturizing agent in the fabric that it says provides a cooling effect. Already the company sees further applications for this new technology.
Effigi Inc., which sells brands such as Tag and Gagou Tagou to Costco, Wal-Mart and other chains, makes a wide array of clothing displayed in "shops within shops."
The company's founder and creative force, chief executive officer Sylvain Veronneau, wants to sell his concept to retailers in the U.S., Europe, Australia and the Middle East.
His aim is to transform Effigi's brands into labels as common as Nike or Tommy Hilfiger, outfitting shoppers from head to toe, literally.
"It's been a long journey for us to find the right partner and financing," Mr. Veronneau, 43, said in an interview.
"I spent 17 years of my life doing what's right for this company ... Genuity wants to help me do exactly what I'm doing now, which is expand the project and bring it to another level."
About two years ago Effigi launched bathing suits and outdoor wear with ultraviolet sun protection built into the fabric.
This fall it will roll out underwear with a moisturizing agent in the fabric that it says provides a cooling effect. It put oversized zippers and buckles on its children's snowsuits so that tiny fingers could more easily make adjustments.
In some ways Mr. Veronneau is following a similar path taken by Chip Wilson, founder of Vancouver-based Lululemon Athletica of yoga wear fame, industry observers said.
Both men created brands in Canada with a local following, and both are now trying to expand globally on the strength of their designs and reputation.
In late 2005, Lululemon got a $108-million investment from two private equity firms. Now it is preparing to raise about $200-million in an initial public offering.
Some industry experts are predicting that Effigi will also go public in an IPO.
"Effigi is very focused," said Elliot Lifson, vice-chairman of Peerless Clothing in Montreal and also president of the Canadian Apparel Federation.
"They have found their niche and they keep growing. They're aggressive ... It's very similar to what Chip Wilson did."
Mr. Veronneau, who is the largest shareholder, said he has no set plans to go public, although he didn't rule it out either.
He would not disclose the company's revenues nor the size of Genuity's investment, but said they were "substantial."
Officials at Genuity declined to comment.
Effigi has grown since it started in 1991 to 250 staff from 13.
It produces about 60 per cent of its products overseas, a far cry from everything being made in Quebec at its inception.
Genuity's investment - and vote of confidence - in Effigi underlines the importance for apparel makers and retailers to build their business around brand names, said Rob Moore, who is a consultant and former Hudson's Bay Co. vice-president.
"You can be a more valuable player if you have brands that have a relationship with the demographic or customer base you want to reach," Mr. Moore said.
He also drew a parallel between the founders of Effigi and Lululemon.
"They're driven by the vision of what the product is and what the brand stands for," he said.
"They have a clear vision of how they create their products for the customers they serve."
Effigi, which has branched out into home-decor items, has taken a page from more upscale fashion powerhouses such as Polo Ralph Lauren.
For years they have installed in-store boutiques in department stores. Now Mr. Veronneau wants to take the concept to the masses.
Already Effigi brands are sold at stores in 18 countries, including Australia.
Down Under, the company's bathing suits, with sun protection in the fabric, have taken off, benefiting from a heightened concern about the dangers of skin cancer, he said.
With the new cash infusion, Effigi will try to strengthen its logistics to shave costs and ensure that goods get to their global destinations on time, he said.
He recently hired a former HBC executive, Peter Kenyon, as chief operating officer to lead the transition.
Techno-wear
The Montreal-based fashion producer works with its suppliers to come up with new ideas to respond to shifting customer needs. It strives to make high volumes of the goods, taking advantage of economies of scale to keep prices low.
Bathing suits and outdoor wear have ultraviolet sun protection built into the fabrics.
Snowsuits have oversized zippers and buckles to help children adjust the clothes themselves.
This fall Effigi will launch underwear with a moisturizing agent in the fabric that it says provides a cooling effect. Already the company sees further applications for this new technology.
Dread those dreary meetings? - Harvy Schachter
Meetings go wrong in many ways. They can be too short to go deep or too long to sustain interest and energy. There can be too many - or too few. New Zealand executive coach Miranda Kennett, in Management Today, suggests carrying out a swift meeting audit, asking six questions
Why?
After listing all your meetings, ask why each is held. What is the real purpose - information sharing, decision making, conveying policy, morale boosting, promoting relationships, or something else? "Everything else should flow from the meeting's primary goal, but often this is unclear and so elements of style and content can be at odds with each other. You may even conclude that the meeting serves no useful purpose and so fulfill your wish to abolish it," she says.
Who?
You need to figure out who should be attending for the meeting purpose to be fulfilled. Too many onlookers can reduce the effectiveness of the meeting, as can the absence of the person with decision-making power.
What?
Next you must tackle content, developing a clear view of the desired outcome of the meeting and whether it realistically can be covered in one session.
How?
Meetings go wrong in many ways. They can be too short to go deep or too long to sustain interest and energy. There can be too many - or too few. New Zealand executive coach Miranda Kennett, in Management Today, suggests carrying out a swift meeting audit, asking six questions:
What is the best methodology for the meeting? How formal should it be? Should you be circulating an agenda and documents in advance? Is face-to-face contact essential or a conference call viable?
Where?
Too many meetings are in low energy places - stuffy, with no natural light, a dominating table that restricts eye contact, and uncomfortable chairs for extended sessions. A good venue can enhance focus.
When?
What's the optimal time of day, week, or month for the session - and how long should it be? "It's surprising how refreshing a time shift can be in moving out of a familiar rut," she advises. Also: While our diaries tend to mark times in hours and half hours, that shouldn't dictate the length of your meeting, since work will expand to fill the time allotted. One executive invented the three-minute meeting to cope with the recurring need of staff for quick decisions and approvals.
Why?
After listing all your meetings, ask why each is held. What is the real purpose - information sharing, decision making, conveying policy, morale boosting, promoting relationships, or something else? "Everything else should flow from the meeting's primary goal, but often this is unclear and so elements of style and content can be at odds with each other. You may even conclude that the meeting serves no useful purpose and so fulfill your wish to abolish it," she says.
Who?
You need to figure out who should be attending for the meeting purpose to be fulfilled. Too many onlookers can reduce the effectiveness of the meeting, as can the absence of the person with decision-making power.
What?
Next you must tackle content, developing a clear view of the desired outcome of the meeting and whether it realistically can be covered in one session.
How?
Meetings go wrong in many ways. They can be too short to go deep or too long to sustain interest and energy. There can be too many - or too few. New Zealand executive coach Miranda Kennett, in Management Today, suggests carrying out a swift meeting audit, asking six questions:
What is the best methodology for the meeting? How formal should it be? Should you be circulating an agenda and documents in advance? Is face-to-face contact essential or a conference call viable?
Where?
Too many meetings are in low energy places - stuffy, with no natural light, a dominating table that restricts eye contact, and uncomfortable chairs for extended sessions. A good venue can enhance focus.
When?
What's the optimal time of day, week, or month for the session - and how long should it be? "It's surprising how refreshing a time shift can be in moving out of a familiar rut," she advises. Also: While our diaries tend to mark times in hours and half hours, that shouldn't dictate the length of your meeting, since work will expand to fill the time allotted. One executive invented the three-minute meeting to cope with the recurring need of staff for quick decisions and approvals.
B.C. schools go abroad for MBA students - Joanne Lee-Young
For years, China's blistering economy encouraged its best and brightest students to go abroad, get MBAs and return to steer its regional and national companies on the rise.
Later, with demand still teeming, Western institutions teamed up with Chinese schools to provide Western MBAs on the ground in China.
Now, homegrown Chinese MBA schools are emerging with a local edge to rival the cachet of Western-laced ones.
It is a market fraught with competition. For the most part, B.C. schools are just wading into it all, with many of their China-based programs only now pushing out an inaugural wave of graduates, a scattered few hundred, though more are in the pipeline.
There is, however, one interesting B.C. pioneer. It has awarded a notable 2,000-plus MBA degrees to students in more than 20 major, but also frontier-land cities across "greater China" (including the Chinese mainland, Hong Kong and Taiwan).
The unlikely example starts at Royal Roads University in Victoria, a campus that sits on a stately Edwardian-era estate with magnificent old stone buildings and immaculate, flowering gardens.
MBA course material developed here has been translated into Mandarin and delivered thousands of kilometres away to students in crowded, noisy, gritty cities via China-based affiliates such as the Tak Ming Institute of Management in Shanghai.
From there, Mathew Cheung, who immigrated to Toronto from Hong Kong in the mid-1990s, but now lives in Shanghai, has fanned out the Royal Roads MBA to students in a long list of cities: Taipei, Kaohshiung, Taichung and Hsinchu in Taiwan; Chengdu, Xiamen, Fuzhou, Xian, Hefei, Hangzhou, Nanjing (the list goes on) in mainland China, plus Hong Kong.
There are four other affiliates that stretch coverage to even more cities, such as Beijing, Qingdao, and Zhuhai, but Cheung's Tak Ming is the oldest and largest of Royal Roads' partners.
In fact, this year Cheung was honoured at a convocation ceremony in Victoria, when he reeled in his one-thousandth Royal Roads MBA degree recipient who is based in greater China.
"I was very happy, but the pressure is on to keep doing more," said Cheung in a phone interview from Shanghai.
The top student in Royal Roads' greater China graduating class of 700 this year actually studied at Tak Ming's centre in Taipei.
Joseph Chi is a 48-year-old executive with Protops Technologies Limited, which distributes graphics products for the Silicon Valley semiconductor giant, AMD, out of Taiwan. He started as an engineer, but his career, at Protops for the last decade and before that at other companies such as Apple in Taiwan, slowly veered toward sales and marketing business positions.
Chi chose the Royal Roads program "because it was an overseas university that is officially recognized in Taiwan." It allowed him to stay on home turf with his family and continue working, as classes are taught on weekends.
The Royal Roads model is still somewhat unique, but it was really different when Royal Roads started it in 1999.
"Most schools use China as a recruiting ground to bring students [to North America]. Ours is a different strategy that was more opportunistic than anything else to start with," Steven Grundy, associate vice-president of international studies at Royal Roads, said in an interview. "It was clear that there is a hot market in China and that the Chinese government wouldn't mind if students were developed there."
Cheung charges students different fees, depending on the location. In Taipei, the full program costs students $13,500 US; in central China's Xian, a more developing location, it costs $6,000 US. Royal Roads gets a flat percentage, which Cheung declined to disclose.
Cheung recruits students and faculty. They are then hand-vetted by Royal Roads' administrators in Victoria and a new office based in Hong Kong as of last year.
The idea of taking business education right into China via affiliates like this has since gained tread at other B.C. schools. North Vancouver-based Capilano College is in the first cycle of running a four-year undergraduate business program for mainland Chinese students in Harbin, a northeastern city near the Russian border.
Thompson Rivers University in Kamloops just graduated its second class of undergrad business students in Tianjin, a northern port city. Its first class of 120 students in a similar program in Shanghai will graduate in two weeks.
"We are small players compared with competition from schools in the U.K., the U.S. and Australia," said Grundy. For example, he noted that in one province, Shandong, there are as many as 80 MBA programs offered by foreign schools, mostly from those three markets, plus European ones that have also been very aggressive.
Despite this push, one of the newest developments in China's MBA market is the coming of age of local institutions such as the Cheung Kong Graduate School of Management in Beijing.
The biggest pitfall of training managers in China with Western theories, practices and case studies is that they can't necessarily apply those lessons when working in the trenches of corporate and entrepreneurial China. It's not a bad bet that schools like Cheung Kong represent the future of MBA education in China.
But for now, there seems to be little worry. Said Cheung of Tak Ming: "Schools like Cheung Kong target the CEOS, the titans of industry in China, the high-fliers. The Royal Roads program is about training the middle and upper managers below these, and there are lots of them."
In illustrating this specific focus on the mass market of the Chinese management world, Cheung added that unlike other foreign purveyors of business programs in China, "we knew from the beginning that if we taught our Royal Roads MBA program in English, it would limit the number of students and make it difficult to expand the program."
Later, with demand still teeming, Western institutions teamed up with Chinese schools to provide Western MBAs on the ground in China.
Now, homegrown Chinese MBA schools are emerging with a local edge to rival the cachet of Western-laced ones.
It is a market fraught with competition. For the most part, B.C. schools are just wading into it all, with many of their China-based programs only now pushing out an inaugural wave of graduates, a scattered few hundred, though more are in the pipeline.
There is, however, one interesting B.C. pioneer. It has awarded a notable 2,000-plus MBA degrees to students in more than 20 major, but also frontier-land cities across "greater China" (including the Chinese mainland, Hong Kong and Taiwan).
The unlikely example starts at Royal Roads University in Victoria, a campus that sits on a stately Edwardian-era estate with magnificent old stone buildings and immaculate, flowering gardens.
MBA course material developed here has been translated into Mandarin and delivered thousands of kilometres away to students in crowded, noisy, gritty cities via China-based affiliates such as the Tak Ming Institute of Management in Shanghai.
From there, Mathew Cheung, who immigrated to Toronto from Hong Kong in the mid-1990s, but now lives in Shanghai, has fanned out the Royal Roads MBA to students in a long list of cities: Taipei, Kaohshiung, Taichung and Hsinchu in Taiwan; Chengdu, Xiamen, Fuzhou, Xian, Hefei, Hangzhou, Nanjing (the list goes on) in mainland China, plus Hong Kong.
There are four other affiliates that stretch coverage to even more cities, such as Beijing, Qingdao, and Zhuhai, but Cheung's Tak Ming is the oldest and largest of Royal Roads' partners.
In fact, this year Cheung was honoured at a convocation ceremony in Victoria, when he reeled in his one-thousandth Royal Roads MBA degree recipient who is based in greater China.
"I was very happy, but the pressure is on to keep doing more," said Cheung in a phone interview from Shanghai.
The top student in Royal Roads' greater China graduating class of 700 this year actually studied at Tak Ming's centre in Taipei.
Joseph Chi is a 48-year-old executive with Protops Technologies Limited, which distributes graphics products for the Silicon Valley semiconductor giant, AMD, out of Taiwan. He started as an engineer, but his career, at Protops for the last decade and before that at other companies such as Apple in Taiwan, slowly veered toward sales and marketing business positions.
Chi chose the Royal Roads program "because it was an overseas university that is officially recognized in Taiwan." It allowed him to stay on home turf with his family and continue working, as classes are taught on weekends.
The Royal Roads model is still somewhat unique, but it was really different when Royal Roads started it in 1999.
"Most schools use China as a recruiting ground to bring students [to North America]. Ours is a different strategy that was more opportunistic than anything else to start with," Steven Grundy, associate vice-president of international studies at Royal Roads, said in an interview. "It was clear that there is a hot market in China and that the Chinese government wouldn't mind if students were developed there."
Cheung charges students different fees, depending on the location. In Taipei, the full program costs students $13,500 US; in central China's Xian, a more developing location, it costs $6,000 US. Royal Roads gets a flat percentage, which Cheung declined to disclose.
Cheung recruits students and faculty. They are then hand-vetted by Royal Roads' administrators in Victoria and a new office based in Hong Kong as of last year.
The idea of taking business education right into China via affiliates like this has since gained tread at other B.C. schools. North Vancouver-based Capilano College is in the first cycle of running a four-year undergraduate business program for mainland Chinese students in Harbin, a northeastern city near the Russian border.
Thompson Rivers University in Kamloops just graduated its second class of undergrad business students in Tianjin, a northern port city. Its first class of 120 students in a similar program in Shanghai will graduate in two weeks.
"We are small players compared with competition from schools in the U.K., the U.S. and Australia," said Grundy. For example, he noted that in one province, Shandong, there are as many as 80 MBA programs offered by foreign schools, mostly from those three markets, plus European ones that have also been very aggressive.
Despite this push, one of the newest developments in China's MBA market is the coming of age of local institutions such as the Cheung Kong Graduate School of Management in Beijing.
The biggest pitfall of training managers in China with Western theories, practices and case studies is that they can't necessarily apply those lessons when working in the trenches of corporate and entrepreneurial China. It's not a bad bet that schools like Cheung Kong represent the future of MBA education in China.
But for now, there seems to be little worry. Said Cheung of Tak Ming: "Schools like Cheung Kong target the CEOS, the titans of industry in China, the high-fliers. The Royal Roads program is about training the middle and upper managers below these, and there are lots of them."
In illustrating this specific focus on the mass market of the Chinese management world, Cheung added that unlike other foreign purveyors of business programs in China, "we knew from the beginning that if we taught our Royal Roads MBA program in English, it would limit the number of students and make it difficult to expand the program."
Friday, July 6, 2007
Seven deadly leadership sins - JEFFREY GANDZ
So much is written about what constitutes a good leader.
But what about the bad?
Clearly, a good leader will want to avoid the kinds of behaviour that go with the flip side.
See if you recognize any elements of your leadership, or the leadership of your bosses, in these bad-leader archetypes:
Narcissists
Narcissists are those self-centered leaders who are intolerant of criticism and alienate followers - except for "toadies," who latch on to them and serve as a buffer against people who might challenge or criticize this leader.
Perversely, narcissistic leaders often charm and fascinate boards, shareholders, customers and even journalists.
They may achieve great business results, and not just for the short-term, since those results may secure them considerable support over an extended period of time.
Yet, once they finish their runs, they usually leave little behind in the way of enduring leadership bench strength. They perform for the present but don't build for the future.
And, despite their brilliance, narcissistic leaders often preside over toxic or corrosive cultures that neither sustain results over the long run nor lead to the development of their successors.
Ditherers
Ditherers suffer from acute analysis-paralysis and are unable to make decisions. They continue to commission studies, take matters under advisement, suggest to people that they are leaning one way ... then lean the other. They lack the "edge" associated with decisive leaders.
When they do act, it is frequently without committing the necessary resources or determination to stay the course. They announce "plans" to do things but the plans lack substance, detail or commitment.
These leaders frustrate their followers, who are unable to get straight answers, and they usually fail to perform for shareholders as they fail to grasp opportunities.
Because they rarely make decisions, their mistakes tend to be less dramatic than those of more decisive leaders - theirs are errors of omission rather than commission.
But their lack of decision-making creates and reinforces a culture of indecisiveness in their organizations that saps innovation and performance.
Avoiders
In many ways, avoiders are worse than ditherers because they don't make decisions at all.
They may not even recognize when a decision is needed and back away from the tough calls. They too often believe that no action is actually action taken.
Avoiders can be imbued with excessive optimism, which, in healthy doses, is a good trait for leaders, but dangerous when it overtakes reality.
In their desire to maintain existing organizational cultures, they avoid recognizing, let alone acting on, the fact that circumstances change, and they are unlikely to be able to replicate the strategies that brought them or their predecessors past success.
Many avoiders hide behind aphorisms such as: "If it ain't broke, don't fix it." When it does break, they find themselves with inadequate time or resources to do the needed repairs.
Such leaders preside over the demise or near-death experiences of organizations that fail to recognize changing environments or are too slow to adjust to new realities.
Panderers
Panderers have no problems making decisions but, with their desire to please everyone, they often make contradictory commitments that cannot be reconciled. and they end up breaking promises and undermining their own credibility.
They may do this in a conscious effort to build the support and alliances they need to consolidate their power base; they may do it because of a genuine desire to please everyone; or they may do it out of blithe ignorance about the difficulties or resources required to be able to satisfy the competing needs of others.
Whatever the motivation, panderers inevitably fail to deliver on their promises. When everyone to whom promises and commitments have been made seek to exercise their claims, they realize that the leader's commitments were shallow. Often, unable to deal with those who are disappointed, such leaders retreat into corporate "bunkers" and start to lead by e-mail or edicts - which may protect them from claimants but does little to give their organizations the real leadership they need.
Faddists
Faddists also have no problems making decisions. But they adopt every leadership or management fad and fashion with an alarming switch rate.
They latch one minute onto the buzzword presented in a prestigious business magazine and the next onto the packaged solutions of the latest best-selling business book.
As a result, faddists confuse everyone in their organizations. Their underlings greet every new initiative as a time-limited program and with a "this, too, shall pass" attitude.
The evidence of previous initiatives is often seen in the organizational paraphernalia - baseball caps and T-shirts adorned with clever and cute slogans that represent yesterday's great strategic thrusts and testify to many years of seemingly random and unconnected changes of course.
Each successive vision is received not with an air of excitement or challenge but with a roll of the eyes and murmurings of "here we go again" as the organization moves on yet another tangent.
When faddists occupy the most senior roles, they fail to inspire in others the disciplined focus essential to achieve sustainable success.
They exhaust their followers and squander resources on too many initiatives that fail to gain traction.
Tunnellers
Tunnellers are the polar opposites of faddists: They are so focused on a single goal or strategy that they either miss the big picture or fail to respond to changing circumstances. They may have a plan to execute, but, unfortunately, it was written 18 months earlier and has turned stale.
Tunnellers cover their lack of peripheral vision with exhortations "to focus," "to be disciplined," "to stick to the knitting."
While these are sometimes useful maxims, when carried to extreme, they can threaten the agility and nimbleness of an organization and its ability to adapt to rapidly changing environments.
In positions of power, tunnellers often discourage others from creative and divergent thinking, reassessing situations or changing objectives or strategies when change is indicated. All too often they end up doing the wrong things, even if they do them brilliantly.
Tunnellers lead organizations, sometimes at breakneck speed, down the wrong track.
Fantasizers
Optimism and confidence are great qualities in leaders, but only when accompanied with a sense of what is realistic.
Fantasizers lack this perspective. Their strategic dreams overreach reality and they fail to see the impossibility of executing a particular strategy.
They also lack the temperament required to drive initiatives through to completion because they are distracted by thoughts of the next great thing to do.
Fantasizers lead their people into strategies that disappoint, wasting resources on unachievable goals.
Over time, they lose their credibility because people start to think that everything they want to do will be unachievable. They become vacuous visionaries - all dreams, no deliverables.
Jeffrey Gandz is a professor at the University of Western Ontario's Richard Ivey School of Business and managing director of program design in Ivey's executive development division.
*****
Putting yourself on the straight and narrow
Most leaders have at times dithered, pandered, tunnelled or fantasized, not to mention avoided or followed fads and even engaged in narcissistic behaviour. Here are some tips on to avoid such bad leadership behaviour:
Look in the mirror
Heed the great poet Robbie Burns' invocation: "Would hae God the giftie gie us, to see ourselves as others see us." In other words: You need to know how you are perceived.
There are tools to help. For instance, 360-degree surveys, which ask those all around you - from subordinates to peers to bosses - to report on how they see your leadership can offer some insights for self-reflection.
Leaders who take those results to heart can go a step further, sitting down with those who have expressed their opinions to ask about the specifics. You can learn a lot if you can gain the trust of participants and assure them there will be no negative consequences from expressing themselves.
Be honest with yourself
Awareness and analysis of the bad can be used to become a better leader. But you must be willing to own up to yourself about your own blind spots, be motivated to change and put in the hard work necessary to do so.
Change when you need to
While constantly changing your mind seldom results in good leadership, consistency is not always a virtue. It is not a sin to change your mind if the alternative is stubborn adherence to the wrong course. But recognize that every change in leadership direction and priorities carries with it the danger of confusion and the mixing of messages. Change when you need to, not just when you just want to -- and certainly don't wait until you absolutely have to.
Walk the talk
The more that good leadership is described explicitly in an organization, the more those principles, behaviours and values will be audited by followers, and the more inconsistencies between words and actions will be noted and judged as "bad" leadership. Failure to walk the talk is probably the worst rap on leaders today. The solution is not to avoid making commitments to good leadership but, rather, to be aware of the say-do gaps and close them.
Pick your priorities
Even the best executives can pursue only three or four priorities at a time - a tiny fraction of the number that need pursuit and which they would like to pursue. This calls for enormous restraint. Saying "no" to things that you want to do is much more difficult than saying "yes." Yet it is essential if leadership is to be seen as focused, committed and disciplined.
Look outside yourself
Organization-wide surveys can help reveal whether and how poor leadership has seeped into your organization's DNA. When it has, you can try some remedies, such as:
Establish a clear leadership profile that describes both the behaviour and values to be expected from leaders.
Design and implement programs to ensure the profile is understood by those in leadership roles.
Make decisions on promotion that take this profile into account.
When leadership behaviour is inconsistent with what your organization needs, remove transgressors from leadership roles.
But what about the bad?
Clearly, a good leader will want to avoid the kinds of behaviour that go with the flip side.
See if you recognize any elements of your leadership, or the leadership of your bosses, in these bad-leader archetypes:
Narcissists
Narcissists are those self-centered leaders who are intolerant of criticism and alienate followers - except for "toadies," who latch on to them and serve as a buffer against people who might challenge or criticize this leader.
Perversely, narcissistic leaders often charm and fascinate boards, shareholders, customers and even journalists.
They may achieve great business results, and not just for the short-term, since those results may secure them considerable support over an extended period of time.
Yet, once they finish their runs, they usually leave little behind in the way of enduring leadership bench strength. They perform for the present but don't build for the future.
And, despite their brilliance, narcissistic leaders often preside over toxic or corrosive cultures that neither sustain results over the long run nor lead to the development of their successors.
Ditherers
Ditherers suffer from acute analysis-paralysis and are unable to make decisions. They continue to commission studies, take matters under advisement, suggest to people that they are leaning one way ... then lean the other. They lack the "edge" associated with decisive leaders.
When they do act, it is frequently without committing the necessary resources or determination to stay the course. They announce "plans" to do things but the plans lack substance, detail or commitment.
These leaders frustrate their followers, who are unable to get straight answers, and they usually fail to perform for shareholders as they fail to grasp opportunities.
Because they rarely make decisions, their mistakes tend to be less dramatic than those of more decisive leaders - theirs are errors of omission rather than commission.
But their lack of decision-making creates and reinforces a culture of indecisiveness in their organizations that saps innovation and performance.
Avoiders
In many ways, avoiders are worse than ditherers because they don't make decisions at all.
They may not even recognize when a decision is needed and back away from the tough calls. They too often believe that no action is actually action taken.
Avoiders can be imbued with excessive optimism, which, in healthy doses, is a good trait for leaders, but dangerous when it overtakes reality.
In their desire to maintain existing organizational cultures, they avoid recognizing, let alone acting on, the fact that circumstances change, and they are unlikely to be able to replicate the strategies that brought them or their predecessors past success.
Many avoiders hide behind aphorisms such as: "If it ain't broke, don't fix it." When it does break, they find themselves with inadequate time or resources to do the needed repairs.
Such leaders preside over the demise or near-death experiences of organizations that fail to recognize changing environments or are too slow to adjust to new realities.
Panderers
Panderers have no problems making decisions but, with their desire to please everyone, they often make contradictory commitments that cannot be reconciled. and they end up breaking promises and undermining their own credibility.
They may do this in a conscious effort to build the support and alliances they need to consolidate their power base; they may do it because of a genuine desire to please everyone; or they may do it out of blithe ignorance about the difficulties or resources required to be able to satisfy the competing needs of others.
Whatever the motivation, panderers inevitably fail to deliver on their promises. When everyone to whom promises and commitments have been made seek to exercise their claims, they realize that the leader's commitments were shallow. Often, unable to deal with those who are disappointed, such leaders retreat into corporate "bunkers" and start to lead by e-mail or edicts - which may protect them from claimants but does little to give their organizations the real leadership they need.
Faddists
Faddists also have no problems making decisions. But they adopt every leadership or management fad and fashion with an alarming switch rate.
They latch one minute onto the buzzword presented in a prestigious business magazine and the next onto the packaged solutions of the latest best-selling business book.
As a result, faddists confuse everyone in their organizations. Their underlings greet every new initiative as a time-limited program and with a "this, too, shall pass" attitude.
The evidence of previous initiatives is often seen in the organizational paraphernalia - baseball caps and T-shirts adorned with clever and cute slogans that represent yesterday's great strategic thrusts and testify to many years of seemingly random and unconnected changes of course.
Each successive vision is received not with an air of excitement or challenge but with a roll of the eyes and murmurings of "here we go again" as the organization moves on yet another tangent.
When faddists occupy the most senior roles, they fail to inspire in others the disciplined focus essential to achieve sustainable success.
They exhaust their followers and squander resources on too many initiatives that fail to gain traction.
Tunnellers
Tunnellers are the polar opposites of faddists: They are so focused on a single goal or strategy that they either miss the big picture or fail to respond to changing circumstances. They may have a plan to execute, but, unfortunately, it was written 18 months earlier and has turned stale.
Tunnellers cover their lack of peripheral vision with exhortations "to focus," "to be disciplined," "to stick to the knitting."
While these are sometimes useful maxims, when carried to extreme, they can threaten the agility and nimbleness of an organization and its ability to adapt to rapidly changing environments.
In positions of power, tunnellers often discourage others from creative and divergent thinking, reassessing situations or changing objectives or strategies when change is indicated. All too often they end up doing the wrong things, even if they do them brilliantly.
Tunnellers lead organizations, sometimes at breakneck speed, down the wrong track.
Fantasizers
Optimism and confidence are great qualities in leaders, but only when accompanied with a sense of what is realistic.
Fantasizers lack this perspective. Their strategic dreams overreach reality and they fail to see the impossibility of executing a particular strategy.
They also lack the temperament required to drive initiatives through to completion because they are distracted by thoughts of the next great thing to do.
Fantasizers lead their people into strategies that disappoint, wasting resources on unachievable goals.
Over time, they lose their credibility because people start to think that everything they want to do will be unachievable. They become vacuous visionaries - all dreams, no deliverables.
Jeffrey Gandz is a professor at the University of Western Ontario's Richard Ivey School of Business and managing director of program design in Ivey's executive development division.
*****
Putting yourself on the straight and narrow
Most leaders have at times dithered, pandered, tunnelled or fantasized, not to mention avoided or followed fads and even engaged in narcissistic behaviour. Here are some tips on to avoid such bad leadership behaviour:
Look in the mirror
Heed the great poet Robbie Burns' invocation: "Would hae God the giftie gie us, to see ourselves as others see us." In other words: You need to know how you are perceived.
There are tools to help. For instance, 360-degree surveys, which ask those all around you - from subordinates to peers to bosses - to report on how they see your leadership can offer some insights for self-reflection.
Leaders who take those results to heart can go a step further, sitting down with those who have expressed their opinions to ask about the specifics. You can learn a lot if you can gain the trust of participants and assure them there will be no negative consequences from expressing themselves.
Be honest with yourself
Awareness and analysis of the bad can be used to become a better leader. But you must be willing to own up to yourself about your own blind spots, be motivated to change and put in the hard work necessary to do so.
Change when you need to
While constantly changing your mind seldom results in good leadership, consistency is not always a virtue. It is not a sin to change your mind if the alternative is stubborn adherence to the wrong course. But recognize that every change in leadership direction and priorities carries with it the danger of confusion and the mixing of messages. Change when you need to, not just when you just want to -- and certainly don't wait until you absolutely have to.
Walk the talk
The more that good leadership is described explicitly in an organization, the more those principles, behaviours and values will be audited by followers, and the more inconsistencies between words and actions will be noted and judged as "bad" leadership. Failure to walk the talk is probably the worst rap on leaders today. The solution is not to avoid making commitments to good leadership but, rather, to be aware of the say-do gaps and close them.
Pick your priorities
Even the best executives can pursue only three or four priorities at a time - a tiny fraction of the number that need pursuit and which they would like to pursue. This calls for enormous restraint. Saying "no" to things that you want to do is much more difficult than saying "yes." Yet it is essential if leadership is to be seen as focused, committed and disciplined.
Look outside yourself
Organization-wide surveys can help reveal whether and how poor leadership has seeped into your organization's DNA. When it has, you can try some remedies, such as:
Establish a clear leadership profile that describes both the behaviour and values to be expected from leaders.
Design and implement programs to ensure the profile is understood by those in leadership roles.
Make decisions on promotion that take this profile into account.
When leadership behaviour is inconsistent with what your organization needs, remove transgressors from leadership roles.
Thursday, July 5, 2007
India makes some room for B&B culture - Sonya Fatah
A few years ago, Pervez Hameed was browsing the Internet when he came across the term "bed and breakfast." He knew nothing about the concept but was intrigued.
His wife, two sons and mother lived together in a six-bedroom house in an upscale residential area in south Delhi. The Hameeds loved company. Mr. Hameed's wife, Lubna, was a great cook, and they had extra space. A bed and breakfast sounded like it was right up their alley.
The couple converted three rooms, got the necessary government permissions, sent out marketing messages to overseas networks, and set up a website: http://www.delhibedandbreakfast.com. In May, 2005, they entertained their first guest and reorganized their lifestyle to accommodate, at first a trickle and then a steady stream of foreign travellers, medical tourists, and business people. By early this year, almost 700 visitors had passed through their home.
Mr. Hameed was one of the first in India's capital city to embrace B&B culture. A little over a year after he opened the doors to his home, the Ministry of Tourism launched a bed and breakfast program with tax incentives, calling on residents of Delhi's swanky southern suburbs to follow in Mr. Hameed's footsteps.
India is struggling to keep up with an influx of foreign tourists, businessmen and official visitors flocking here in increasing numbers every year. Its major cities boast dozens of five-star hotels and luxury properties but cannot cope with the demand for rooms.
In 2005, 93 approved hotels provided 10,159 rooms. In 2006, that number sprang to 120 hotels with 12,091 rooms, but the shortage is still a concern. Last year the tourism ministry recorded 3.92 million foreign visitors to India, and "we are expecting a growth rate of 13 to 15 per cent this year," says Raj Vir Mittal, an assistant director in the Ministry of Tourism. He points to new flights offered by Thai Airways, Continental Airlines and Finnair as a reason for the influx.
And with 90,000 additional visitors expected to arrive in Delhi for the 2010 Commonwealth Games, the government's B&B plan may be coming just in time.
Getting approved as a B&B takes about a month, and is not a terribly bureaucratic process. Police provide official verification stating the owner does not have a criminal record. The owner of the house presents ownership documents. Finally, a committee comprised of tourism officials and police inspects the facilities and approves or rejects the property.
To date, the Ministry of Tourism's "Paying Guest Residential Accommodation" website reflects 78 approved properties. "On the one hand there is huge demand and on the other you have a massive inventory of rooms lying vacant within private houses, which owners would be only too happy to let out to tourists," said Atul Chautvedi, director of the Ministry of Tourism, on the launch of the program.
The government hopes to provide 30,000 rooms in two years, but currently only 240 rooms have been added to Delhi's accommodation offerings. There is some confusion about the tax advantages, and some residents expressed discomfort about opening their homes.
For Mr. Hameed, the experience has been fulfilling. Their home has grown to offer amenities such as wireless Internet, tour packages and beauty treatments. But the government's program means that, despite a head start, the Hameeds can expect competition.
"There are any many more beautiful properties and good hosts that will enter the market but we have established our credibility," Mr. Hameed said.
His wife, two sons and mother lived together in a six-bedroom house in an upscale residential area in south Delhi. The Hameeds loved company. Mr. Hameed's wife, Lubna, was a great cook, and they had extra space. A bed and breakfast sounded like it was right up their alley.
The couple converted three rooms, got the necessary government permissions, sent out marketing messages to overseas networks, and set up a website: http://www.delhibedandbreakfast.com. In May, 2005, they entertained their first guest and reorganized their lifestyle to accommodate, at first a trickle and then a steady stream of foreign travellers, medical tourists, and business people. By early this year, almost 700 visitors had passed through their home.
Mr. Hameed was one of the first in India's capital city to embrace B&B culture. A little over a year after he opened the doors to his home, the Ministry of Tourism launched a bed and breakfast program with tax incentives, calling on residents of Delhi's swanky southern suburbs to follow in Mr. Hameed's footsteps.
India is struggling to keep up with an influx of foreign tourists, businessmen and official visitors flocking here in increasing numbers every year. Its major cities boast dozens of five-star hotels and luxury properties but cannot cope with the demand for rooms.
In 2005, 93 approved hotels provided 10,159 rooms. In 2006, that number sprang to 120 hotels with 12,091 rooms, but the shortage is still a concern. Last year the tourism ministry recorded 3.92 million foreign visitors to India, and "we are expecting a growth rate of 13 to 15 per cent this year," says Raj Vir Mittal, an assistant director in the Ministry of Tourism. He points to new flights offered by Thai Airways, Continental Airlines and Finnair as a reason for the influx.
And with 90,000 additional visitors expected to arrive in Delhi for the 2010 Commonwealth Games, the government's B&B plan may be coming just in time.
Getting approved as a B&B takes about a month, and is not a terribly bureaucratic process. Police provide official verification stating the owner does not have a criminal record. The owner of the house presents ownership documents. Finally, a committee comprised of tourism officials and police inspects the facilities and approves or rejects the property.
To date, the Ministry of Tourism's "Paying Guest Residential Accommodation" website reflects 78 approved properties. "On the one hand there is huge demand and on the other you have a massive inventory of rooms lying vacant within private houses, which owners would be only too happy to let out to tourists," said Atul Chautvedi, director of the Ministry of Tourism, on the launch of the program.
The government hopes to provide 30,000 rooms in two years, but currently only 240 rooms have been added to Delhi's accommodation offerings. There is some confusion about the tax advantages, and some residents expressed discomfort about opening their homes.
For Mr. Hameed, the experience has been fulfilling. Their home has grown to offer amenities such as wireless Internet, tour packages and beauty treatments. But the government's program means that, despite a head start, the Hameeds can expect competition.
"There are any many more beautiful properties and good hosts that will enter the market but we have established our credibility," Mr. Hameed said.
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