Office rented considerably less space from Jan to Mar; here’s what’s happening

Just 5 million sq ft of office space found takers in the three months to March, reflecting a vertiginous 58% sequential drop in the space.

Just 5 million sq ft of office space found takers in the three months to March, reflecting a vertiginous 58% sequential drop in the space. With the economy more listless than ever, fewer companies seem to have the courage to rent office space — even looked at in comparison with the corresponding quarter of 2015, the fall is a steep 26%, ruling out any seasonality.

In fact, the numbers reflect space rented by companies that may be relocating; the net area might turn out to be smaller than 5 million sq ft.

Navin Makhija, MD at Wadhwa Developers, pointed out that companies were more confident about their businesses in 2014 and were quicker to set up shop or expand operations. “The mood at the time was far better and transactions were closed out faster. These days it takes as long as six months sometimes to close out a deal,” Makhija said.

A contraction in demand for offices, as reported by property consultant CBRE, has been fairly widespread across micro markets such as the National Capital Region, Thane, Navi Mumbai, Goregaon and a few like Whitefield in Bengaluru.

Offices in demand include many of the newer buildings in the Bandra Kurla Complex Mumbai’s western suburb where primarily banks and financial companies are headquartered. Rents here have remained by and large stable and occupancies in the top-rung buildings are running at close to 100%.

The CBRE report noted businesses have been booking space in properties that are under construction because the prime locations are occupied.

However, these are typically small to mid-sized spaces. The loss of momentum in the absorption of office space this year has been attributed partly to the brisk pace seen in 2015 when some 38 million sq ft was snapped up, the highest in a year.

Meanwhile, private equity (PE) funds are looking to snap up more office space, with the segment having done well in 2015 and in the hope real estate investment trusts will soon take off. Marquee players like Blackstone have already accumulated a portfolio of close to 30 million sq ft of commercial space. Now others such as Kotak Realty, Piramal Asset Management, Brookfield Asset Management, Macquarie and Milestone are shopping for property. However, while money will move in, risk may not. Experts say purchases will be funded via structured debt rather than equity and while a few pedigree players may attract equity, fund managers will be largely cautious.

Sun Capital

Panama Papers Reveal The Secrets Of Dirty Money

Hidden in 11.5 million files and about 2.6 terabytes of data are some of the darkest “wealth” secrets of politicians, ministers, officials, celebrities, criminals and associates of mafia groups. A sensational release of leaked documents by the German newspaper Süddeutsche Zeitung on Sunday, in what it’s calling the "Panama Papers: The Secrets of Dirty Money", exposes the network of corruption and abuse of tax havens by the mega-rich and powerful to hide their wealth.

Background

The story goes back over a year, when Süddeutsche Zeitung (SZ) was contacted by an anonymous source who submitted 11.5 million encrypted confidential documents “safeguarded” by Mossack Fonseca. The Republic of Panama head-quartered Mossack Fonseca is a firm, “that sells anonymous offshore companies around the world. These shell firms enable their owners to cover up their business dealings, no matter how shady”, according to Süddeutsche Zeitung.

The source did not demand any financial compensation in return as revealed by SZ. But the number of secret documents kept pouring in, even a few months after the first submission was done. The total volume of leaks was nearly 2.76 terabytes, the biggest ever in history. According to SZ, “The Panama Papers include approximately 11.5 million documents – more than the combined total of the WikiLeaks Cablegate, Offshore Leaks, Lux Leaks, and Swiss Leaks. The data primarily comprises e-mails, pdf files, photo files, and excerpts of an internal Mossack Fonseca database. It covers a period spanning from the 1970s to the spring of 2016.” (See also: The Biggest Stock Scams Of All Time. )

Team Effort

The analysis of the encrypted files wasn’t done by Süddeutsche Zeitung alone. SZ decided to work in cooperation with the International Consortium of Investigative Journalists (ICIJ). The research done over 12 months, involved around 400 journalists representing about 100 media organizations from over 80 countries. The team included prominent names like the BBC, the Guardian, the Le Monde in France, the Austrian weekly Falter, the Swiss Sonntagszeitung, and La Nación in Argentina among others. (See also: Why is Panama considered a tax haven?)

Who’s On The List

“The data provides rare insights into a world that can only exist in the shadows. It proves how a global industry led by major banks, legal firms, and asset management companies secretly manages the estates of the world’s rich and famous: from politicians, FIFA officials, fraudsters and drug smugglers, to celebrities and professional athletes,” according to Süddeutsche Zeitung.

The cache of 11.5 million files includes names of very popular and prominent figures. Some of the names on the list are: Alaa Mubarak (Son of Former Egyptian President), Kojo Annan (Son of former United Nations Secretary General), Ayad Allawi (Ex-Prime minister of Iraq), King Salman bin Abdulaziz bin Abdulrahman Al Saud (King of Saudi Arabia), Li Xiaolin (daughter of former Chinese Premier Li Peng),

Arkady and Boris Rotenberg, childhood friends of Russian President Vladimir Putin, Sergey Roldugin, one of Putin current associates, also made the list. It isn't a surprise to many, after years of official corruption and cronyism in Russia, that Putin's friends have enriched themselves at the public expense, or that they have hidden much of that wealth in off-shore corporate shell organizations. But the depth and breadth of the current leak should give even the most cynical observers of international oligarchy pause.

A press release on April 3, 2016, by Global Witness, read, “The recent exposé by the International Consortium of Investigative Journalists and their media partners have once again shown the insidious role that tax havens, corporate secrecy and shell companies play in aiding widespread crime, corruption and violence. These threaten the safety, security and well-being of people around the world.”

The Bottom Line

The year-long investigation has lifted the layers of secrecy underneath which Mossack Fonseca has been “covertly” helping the rich and powerful to legalize dark and unaccounted money as well as evade taxes. The report, which unveils more than 140 politicians and public officials across 55 countries, shows that foul play, tax evasion, corruption and existence of huge unaccounted wealth isn’t one country or regional phenomenon but is happening for decades across the globe.

Majority of economic ownership should be in the hands of Indians: Nilesh Shah

While global financial markets have recovered from recent lows, some investors are still on a wait-and-watch mode about investing in emerging markets (EMs). Some find it difficult to invest in India given excessive controls. Nilesh Shah, managing director, Kotak Mahindra Asset Management, tells Puneet Wadhwa  he expects smart, risk-taking foreign investors to look at opportunities in EMs, considering future growth and cheap valuation, while risk-averse and uninformed ones would withdraw money, looking backwards at the past performance. “Fruits of our growth, entrepreneurial success, should be enjoyed by Indians rather than foreigners,” he adds. Edited excerpts:

Global financial markets, especially the European Union (EU), China and commodity-dependent countries, are not out of the woods yet. It is likely that at regular intervals, events in the EU will shake global financial markets. China has expanded its credit-to-GDP ratio multiple times in the past 10 years. It is transitioning from an investment-led economy to a consumption-led one. It will provide hiccups to global financial markets at periodic intervals as a side effect of this transition.

What are the chances for Indian markets to go below their recent lows?

India seems to be an oasis in the global desert, which is devoid of growth. Our macros are strong and improving. Our markets have corrected in terms of valuation, but they will undoubtedly see volatility, especially after a fabulous March but unless a drastic event happens, it is unlikely to go below the lows seen in February.

How are foreign investors looking at EMs as an investment option? Where does India stand in their order of preference?

The experience of foreign investors in EMs has been pretty disappointing in the past five years. The MSCI EM Index is down 30 per cent, whereas the developed market (DM) index is up 19 per cent in the past five years. While India has outperformed EMs, it has underperformed DMs. At this point of time, a risk-averse foreign investor can legitimately question the investment rationale for EMs, looking at the past performance.
Undoubtedly, EMs have become cheap from a valuation viewpoint. We expect smart, risk-taking foreign investors to look at opportunities in EMs considering future growth and cheap valuation, while risk-averse and uninformed foreign investors would withdraw money looking backwards at the past performance. We expect FII (foreign institutional investor) flows to be positive for CY2016, though not at the same pace as seen in March 2016.

How do you rate the ease of doing business and policies regarding investing in financial markets as regards India? Are there any specific bottlenecks or concerns to be addressed?

We are an evolving market. We have built robust physical infrastructure for financial markets in India. Our regulators are comparable with the best in the world. At times, our frustration doesn’t take into account the constraints within which our financial markets operate. What we need to address is to keep the majority of economic ownership of India in the hands of Indians. We need to answer if 51 per cent of listed India is owned majority by foreigners through FDI (foreign direct investment) and FII investment, will India remain economically independent? The pace of growth in royalty payments to foreign parent is faster than rate of growth in profit after tax in listed companies after liberalisation of guidelines on royalty payments. This is despite the fact that many such companies have poor margins compared to their local peers.
Our entrepreneurial success should be enjoyed by Indians rather than foreigners. We need to focus our policies on increasing the ownership of listed India Inc and financial savings among Indians to ensure domestic savings are available to fund growth and we don’t depend excessively on foreign capital. We are racing against time and tomorrow might be a little late. We need to create a level-playing field between domestic capital and foreign capital.

Do you think the government and the Reserve Bank of India (RBI) are cognizant of the domestic and global headwinds the economy is likely to face? How well are we prepared?

The government, RBI and other regulators are well equipped to handle headwinds of global crisis. Our issue is whether we, as citizens of India, will back our own country. Will we reduce consumption of Chinese goods? Will we reduce buying of gold and diamonds? Will we pay our taxes properly?

What is your advice to retail investors in this backdrop?

Making money is not easy. It requires patience and discipline. Asset allocation is key for wealth creation. Regular investment is key for success in a volatile market. To retail investors, I want to pass only one message – in the past 25 years, what India has created in terms of market capitalisation, GDP etc is going to be created in the next 10-15 years. Don’t let the opportunity go away. Invest wisely.

Sun Capital

Private equity players upbeat on commercial space

Private equity (PE) funds are looking to snap up more office space, with the segment having done well in 2015 and in the hope REITs (real estate investment trusts) will soon take off. Marquee players like Blackstone have already accumulated a portfolio of close to 30 million square ft of commercial space.

Private equity (PE) funds are looking to snap up more office space, with the segment having done well in 2015 and in the hope REITs (real estate investment trusts) will soon take off. Marquee players like Blackstone have already accumulated a portfolio of close to 30 million square ft of commercial space. Now others such as Kotak Realty, Piramal Asset Management, Brookfield Asset Management, Macquarie and Milestone are shopping for property.

If industry sources are to be believed, Kotak Realty might soon team up with a Bangalore based company scooping up ten million square ft in the process. Piramal has set aside `5,000 crore to invest in commercial properties in FY17 while Milestone is in the process of raising `500 crore to do the same.

However, while money will move in, risk may not. Experts say purchases will be funded via structured debt rather than equity and while a few pedigree players may attract equity, fund managers will be largely cautious. Khushru Jijina, MD, Piramal Fund Management confirms his firm will fund projects primarily through construction financing and senior secured debt. Players like Piramal can be more competitive than banks who charge builders interest rates in the early teens.

“We can offer customised repayment schedules, flexible interest servicing and work around other rules that banks are forced to to adhere to,” Jijina said.

Last year, 72% of total transactions were financed by structured debt with the residential piece accounting for the bulk of the money. This time around more mezannine financing is likely to be seen in the commercial real estate segment. That unfortunately is not good news for a whole host of companies which, according to Rajeev Bairathi, ED, capital markets, Knight Frank India, looking to deleverage and need equity.

Meanwhile, a clutch of smart developers — K Raheja Corporation, DLF, Divyashree Developers and Prestige Estates — is quickly consolidating positions in projects so as to extract a better prices from PE funds. There have been at least two instances, in the last few months, of promoters buying out partners and putting together a pool of income generating assets. Such portfolios, they feel, will be more eligible for both PE players and a REIT listing.

Meanwhile, given how investors such as Blackstone, CPPIB, GIC, QIA have been actively scouting for commercial developments, cap rates in the sector have come off, driving up valuations. Cap rates, industry experts say, have been falling over the past two years from approximately 11% to 9% for Grade A developments, making commercial real estate an expensive proposition. Vikas Chimakurthy, director at Kotak Realty points out, however, that while cap rates for built-up projects have fallen, there are opportunities in acquiring properties that half- built and in need of last mile funding. According to the management at Milestone, it will choose assets that can deliver a 12% IRR on investments and rental yields of 15% over the next three years making Bangalore and Mumbai the best hunting grounds.

CBRE recently reported that 38 million sq. ft of gross prime office space was absorbed in 2015, the highest in any year. Bangalore led the way followed by by NCR. Rental values in the CBDs (central business districts) were stable, with the exception of Pune and Bangalore, which saw an appreciation between 5% and 20% annually in some micro-markets. According to Cushman and Wakefield, in value terms, 30% of the total USD 3.96 bn that was invested into real estate by PE funds was made in the commercial sector.

Sun Capital

BRICS bank’s first loan goes to Karnataka

The fledgling New Development Bank (NDB), better known as BRICS bank, will sanction its first loan to a project in India later this month, diversifying India's options to raise long-term capital for infrastructure development.

The fledgling New Development Bank (NDB), better known as BRICS bank, will sanction its first loan to a project in India later this month, diversifying India’s options to raise long-term capital for infrastructure development.

At its scheduled board meeting on April 14, the Shanghai-based NDB is expected to sanction $250-300 million as loan to a government-run solar power project in Karnataka, a source told FE. The interest rate for the 20-year loan would be Libor (the London Interbank Offered Rate) plus a spread, comparable to rates charged by other multilateral agencies such as the World Bank. The loan would be denominated in US dollar, the source said.

To begin with, the NDB would lend to government projects under a co-financing model. State-run Canara Bank was the co-financier to the above-mentioned solar power project in Karnataka. The solar project was one of the three projects recommended by India for NDB’s consideration. The other two include an irrigation venture in Rajasthan and a road project in Madhya Pradesh.

The NDB board is also expected to sanction one loan each for the other founding members of the BRICS bank namely Brazil, Russia, China and South Africa. The board would also approve lending, borrowing and environmental policies for the bank before it commences operations.

The NDB has a subscribed capital of $50 billion while the authorised capital was $100 billion. Besides NDB, the developing countries led by China have set up a $100-billion an Asian Infrastructure Investment Bank (AIIB), which would be the second new source of funding for India’s massive infrastructure development plan. The AIIB is also expected to give its first loan to India in April-May.

Sun Capital 

Is Sebi nudging investors in mutual funds to go direct?

The websites of the fund houses will provide details of the money managers and chief executive officers earn

The Securities and Exchange Board of India’s (Sebi) circular dated 18 March 2016—that mandated additional disclosures about how much money your mutual fund distributor makes on your investment in absolute terms and how much salary your fund managers (and other top mutual fund officials) earn—kicked up quite a storm.

Fund houses will now need to disclose how much commission your distributor has earned on your investment—on a half-yearly basis—in your half-yearly common account statement (CAS), in absolute terms. The statement will also show the expense ratio of direct and regular plans of your MF scheme. The fund houses’ websites will provide details of how much their money managers and chief executive officers earn. Scheme Information Documents of every MF scheme will also mention how much—if at all—they have invested in that scheme. There are a few other requirements, but they are not as important, so we will leave them aside for now.

I want to turn the attention to two of Sebi’s most crucial requirements. The need to disclose distributor’s commission in absolute terms, and the mention of expense ratio of direct and regular plans in your CAS.

What the numbers show

Let’s begin with disclosing distributor’s commission. Why does Sebi want you—the investor—to know how much your agent is earning? Presumably, to ensure that you are sold the right product, that you get comfort from the fact that your distributor has not earned anything out of the ordinary, like an expensive foreign holiday, to sell you the MF scheme. That’s fine. Nothing wrong here.

But how will investors react if they see distributors’ earnings, in absolute terms? There could be three possibilities. First, no reaction. Second, some investors might be tempted to pull out if they feel distributors are earning way too much on their investments and go direct. Third, they may ask for a rebate. Let’s see how and why.

Click here for enlarge

Take a look at the table. We assumed a mid-cap fund and that you invest Rs.50,000 every month in it, through a systematic investment plan, between March 2006 and March 2016. Over the 10-year period, you would have invested a total of Rs.60 lakh. As on 1 March 2016, your portfolio value would be Rs.1.46 crore. As per rough calculations, your latest half-yearly CAS (as on March 2016) would have shown your distributor having earned aboutRs.77,800 as commission for the period between September 2015 and March 2016.

These are rough numbers as we have assumed a trail fee of 1% per annum and have also calculated the trail fee based on the 6-monthly average assets under management of the portfolio.

Actual numbers will vary depending on the formula each fund house uses. Also, how MFs account for gifts and money spent on distributors, apart from commissions, remains to be seen. This is a simple illustration of one way of how trail commissions could look in your CAS.

My point is: will it not bother you knowing that your distributor has earned Rs.77,000 as commission on your investment? That too, for just the previous six months? In this example you have been investing for the past 10 years.

Take a closer look. Between September 2010 and March 2011, due to market volatility, the scheme’s net asset value dropped and so did the value of your investments, from Rs.42 lakh to Rs.39 lakh. Now see your distributor’s commission. It went up marginally, from Rs.18,936 to Rs.21,888. This is due to short-term volatility and also because trail fees in this example are calculated using the past six-month average corpus. In a continuous market fall, the trail fee will go down. Still, it could bother many investors.

A susceptible investor is likely to be alarmed if she sees that her corpus has gone down, but the distributor is still earning a commission, and which has gone up. Step forward to 2016 and we now know that this investment grew to become Rs.1.54 crore (as on 23 March) but it’s a real possibility for the same investor to have been upset in 2010-11 when the economy was in a bad patch.

It’s also human psychology. While a percentage figure of 1% doesn’t bother you, an absolute number just seems larger and might make you reconsider your investments. The moment you put a figure, and if that figure runs into thousands—which it will if, ironically, you have a good distributor and one who convinces you to stay invested for the long run—it sets the cat among pigeons.

Finding worth

Some believe that distributors should not get trail fees in the long run because if advice is what is required to convince investors to stick around, then Sebi-registered investment advisers (RIA) should be the ones giving the advice, and not the distributors. We’ll come to that in a short while.

Meanwhile, upon looking at the absolute commission figures, some large and mass affluent investors might use this as an opportunity to demand a cut from their distributor’s commission. It is possible that distributors, especially those from Beyond Top 15 cities where financial literacy is poor, might feel obliged to give a cut from their commission to investors in volatile markets when customers see a drop in valuations. Corpus can fall not just due to bad advice, but also market volatility. Although commission passback is banned, it still happens privately. And it could potentially get worse.

After telling you how much money your distributor has been making on your investments, Sebi now wants you to turn your attention to another detail that your CAS will now disclose; your scheme’s expense ratio of the regular plan (the plan in which you have invested in) as well as the direct plan (the cheaper cost plan that is devoid of distributor fees). Suffice to say that if you have already been riled up at the fact that your distributor has been making money even as your fund may have shown a short-term loss, say, during volatile times, you may get tempted to go direct and save the commission. This may not be Sebi’s intention but investors switching to direct plan is a possibility we cannot ignore.

That’s the danger. Direct plans are not for everyone. They are only meant for those investors who have the knowledge and the skill to pick and choose MF schemes on their own. And for those who have the time to do the added work of tracking funds regularly. Unknowing investors who think they can manage portfolios on their own without a distributor’s help, face the danger of investing in a wrong scheme and suffering far greater damage than just the difference in the expense ratios of the two plans.

Why, then, not go to a financial planner or a Sebi-registered investment adviser, pay her fees for advice on investments and financial planning and then invest through the direct plan? Also, if distributors are merely vendors, then why should they advice and earn fees (trail fees)?

Sebi’s vision appears to be to have two classes of sellers; one is a distributor who is a vendor and should, therefore, disclose all commissions that she earns from the fund house. The other person is the adviser who charges fees to you—the investor—and then routes your investments through direct plans. In doing so, Sebi has nudged distributors to either become registered investment advisers (RIA) or remain as distributors but disclose fees.

RIAs are supposed to disclose fees too, but since Sebi has now allowed them the direct plan route (starting 2016), they are now in a better position to justify their fees.

There are two problems with this approach. RIAs—who can demonstrate value—will be able to pull in customers who are willing to pay. But this breed of customers is still small in India. The remaining investors—who don’t want to pay an adviser and therefore choose to stick to a distributor who doesn’t charge a fee—will now get to decide if their distributors are paid adequately or not.

Secondly, disclosures are good. But the scheme’s total expense ratio (TER) figure is what we should be looking at. If Sebi feels that the TER is high, it should simply reduce it. Or, if it feels that the trail fee—after a point in time—should be capped, then it should say so. Such measures are not only enforceable, they also send out a message that if Sebi feels that higher costs prevent MF penetration, then a reduction in costs will now lead to higher penetration.

Further, disclosing a tad too much also looks like a soft nudge by Sebi to distributors to become financial advisers. The regulator seems to be thrusting a change into a distributor’s business model, based on which some distributors will stop earning trail fees, overnight. A standalone distributor cannot become an RIA presently unless she decides to let go of her trail commission overnight. Unless she forms a company and keeps her distribution business (that earns trail commission on legacy clients) in a separately identifiable department. That bit is allowed by Sebi’s RIA guidelines.

That brings me to my earlier question: should distributors—or vendors, as some people call them—earn trail fees? If trail fees is earned for advice provided, then why should distributors earn trail fees? And if so, why fear the disclosure of trail fees in the CAS?

Since trail fees are paid to the distributor for as long as the investor stays invested, it doesn’t naturally mean that the distributor is giving investment advice here. It need not be a fee paid for advice. Even to convince the investor to stay invested for a long period of time itself is a task, which—in cases of those distributors with a high persistency ratio—is hard work.

And if the distributor has gone out and acquired a customer, there should be no harm in paying a trail fee, especially since it’s a fee that rewards the distributor for investor’s patience. Sure, there are investors who readily stick around and distributors earn trail fee without doing anything. But such investors are in a minority; else MF penetration numbers would have been much higher.

The last point

Disclosures are a must. But how much disclosure is good? Ultimately, what is the aim of a disclosure? To encourage MF investments? To reduce misselling? More importantly, are investors armed to make sense out of a particular disclosure or does it have a danger of being misinterpreted?

Also, if Sebi is keen to change its own rules (for example, distributors can earn trail commission till the investor stays invested), then it should allow time for existing distributors to shift to the new fee-based model. By influencing investors’ behaviour without first educating them to correctly interpret the added information they are about to get, Sebi has not sent out the right signal. The intent is good, but the method is not.

Sun Capital

The 6 Biggest Myths About Meetings Today

A new survey out from the software company, Clarizen, states that U.S. employees are spending more time than ever – almost nine hours of the work week -- preparing for and attending meetings. What’s worse is that more than a third of those polled felt that these meetings were unnecessary and a waste of time.

Seeing this, it’s easy to understand why most employees have given up on the possibility of better meetings. Change can seem hopeless, but it’s not. The key for organizations and employees alike lies in questioning the practices that we have not examined before -- the myths that we hold as true. 

Most people realize that meetings should have agendas, should stay on track, and should finish on time. In fact, if you were to ask your group these two questions, you’ll find that, for the most part, people know what needs to be done to have effective meetings.

·         What do you wish were true about meetings you lead that isn’t true now?  

·         What do you wish were true about the meetings you attend that isn’t true now?  

Try it, and you’ll find the lists to be almost identical. For example:

·         Have an agenda and stick to it.

·         Start and end on time.

·         Manage the people who tend to dominate the conversation.

·         Get more people involved in the conversation.

·         Make decisions and get things moving.

·         Don’t call a meeting if we don’t have anything to talk about.

·         Do something about distractions.

This article is about items that will not be on either list. Here are the six biggest myths about meetings today:

Managers should run their own meetings.

If there are only five people in your meeting, run it yourself. If there are 20, no way. Your attention and devoted listening are too important for you to be distracted by trying to manage the conversation. Instead focus on: What value are you getting from the conversation; when does the group need your perspective; what feedback might you have for individuals in your group as you watch them interact in a group setting?

Writing the meeting summary is secretarial work.

People are running from one meeting to the next. Often your meeting ends only because the next group wants the meeting room. Unless you write concise, clear meeting summaries, what you talked about and decided in this meeting will disappear—and quickly. The person who summarizes the meeting has tremendous influence and power over the future. Find someone who has a gift for writing and understands the importance of getting a one-page summary out within an hour—this might be your best engineer, IT analyst, or salesperson.

Information sharing is a good use of time.

Meetings are about moving the organization forward.  They are about making decisions, reaching alignment and orchestrating action. It’s rare that sharing information does any of these things. If information sharing dominates the agenda, you are not respecting the time and talent in the room. Target to spend only 10 to 15 percent of your time on sharing information.

You can count on people to do what they say they will do.

We all know that people do not keep their word. Good, hardworking, well-meaning people do not do what they say they will do because they are busy and working more hours than they want to work. Culturally, it’s okay…it’s just not a big deal anymore for people to be unreliable. If you want progress, you must ask people for specific commitments with dates, and you must follow up with them along the way.

PowerPoint always adds value to a meeting.

PowerPoint is wonderful for covering lots of information in a way people can follow. The question is: Do you want a presentation or a conversation? PowerPoint puts people into a default position of thinking about other things and not asking questions. They are basically waiting for the presentation to be over. Think about this in terms of project updates. Are you looking for a simple 10-minute update on how the project is going, or do you want a rich back-and-forth conversation about the project? Which approach allows your leadership team to truly support and impact the project?

Calling on people is harmful.

I get it. Do not call on people to embarrass, dominate, or control them. Do not put people on the spot or catch them off-guard. Still, if you want a balanced conversation that is rich with ideas and different points of view, you must call on people to get their insights if they’re not offering them on their own.

This is the perspective that almost everyone has when they walk into a meeting—I’ll speak if I feel like it. As a consequence, those who love to talk do, and those who don’t, don’t. How is that working for you so far?

Dispelling these myths and introducing change to your organization will be easier than you think. As we’ve seen from the Clarizen survey, you are not alone in the way that you feel – almost everyone wants meetings to be better. Take the first step now, and go out to find your allies. Change will come shortly after. 

Sun Capital