Logical String

Hands-off or Hands-on

2008-10-19T16:24:00.001+05:30

Being a hands-off manager in an organization with predominantly hands-on management culture can be a frustrating experience at times. Surprising as it may seem, even in this age of knowledge worker, rampant micro management and repulsion for anything hands-off or true empowerment is prevalent in many organizations. For old timers it may not mean much as they have been living under the shadow of micro management for most of their professional career, but for the younger generation this hands-on approach is a bit uncomfortable.

The biggest problem with hands-on approach is that it prevents development of people. Instead of mentoring and coaching, a better part of the manager's time is spent in criticizing and judging people. Empowerment takes a back seat and command and control becomes a norm.

People become mere implementer of ideas they don't own. This often results in poor quality of output. People engagement suffers. They don't feel like partners in creating something bigger and better. Instead, they feel like running errands for their managers. All these work like creativity killers in the organization and act as major hindrance in an organization's quest to reach its true potential.

Isn't it time for shunning hands-on management in favour of hands-off management? Ingraining hands-off management culture in an organization's DNA would go a long way in –

Developing people through mentorship and coaching.
Increasing creative problem solving throughout the organization.
Speedier and more effective planning and execution through empowerment.
Spreading new ideas.
Developing a learning organization.
Decline of organizational politics.
Attracting and retaining talent.

Tempted To Hire Additional Manpower?

2008-09-22T21:05:00.005+05:30

Hiring additional manpower is a necessity in any growing organization. But often additional manpower is brought for all the wrong reasons. Instead of helping manage growth they turn out to be veils for protecting mediocrity. This is something to be wary about while taking decision to hire additional manpower. Very often optimization of the existing manpower would ensure that no immediate need for additional manpower is felt.

Always remember that quick-fix never works! Following are some of the situations (quick-fix temptations) which are not reasons for hiring additional manpower:

Having talented manpower but inability to get optimal use of them.

Incompetent manpower requiring additional hands.

Wrong person at the wrong place bringing in overall ineffectiveness.

Trying to find solutions for a business problem through additional manpower when the root cause is something else.

When should you bring additional manpower? Following situations may be the apt reason for hiring additional manpower

To manage growth and expansion in a rapidly growing (>40% growth) business.

If the existing manpower is over-burdened with genuine workload. A quick check would be to understand whether the current demand on existing manpower requires 120% of their energy. It is said that 100% effectiveness comes when someone's work demands 120% of his time (attributed to Azim Premji in the book GO KISS THE WORLD by Subroto Bagchi)

Changing business environment requiring additional skill set/ experience.

The next time you are thinking about hiring some additional manpower or creating some new profiles, ponder over the situations and try to figure out why exactly you want additional manpower. A little honest thinking would go a long way in maintaining the health of the business along with optimal use of all the resources.

Free Telephony In India - An Idea

2008-09-11T23:53:00.002+05:30

"Why do we need to pay for making phone calls?" This was the question that came to my mind while I was glancing at my phone bill. Why the phone calls can't be completely free, I thought. Well, it is indeed possible, at least in India!

Telephone tariff has significantly come down. Rs. 1 per minute call charge is routine. The question is how to make it completely free – no call charges; no rentals.

The key to free telephony is advertisement revenue. This is one area which most of the telecom service providers have ignored till now. The blind focus on increasing ARPU (Average Revenue Per User) has hardly bore fruits. A paradigm shift and rechristening of ARPU as Advertising Revenue Per User may open a goldmine.

It will work on these lines. The more a telecom consumer talks, the more advertising she hears (fixed number of seconds per minute of talk time), and the more money an advertiser pays to the telecom service provider.

Here are some of the options to generate advertising revenue sufficient enough to make telephony free.

Caller tunes to turn into 10 second advertisement. When someone makes a call, instead to hearing some song, he gets to hear an AD till the time the recipient receives the call.

When the call gets started, first 10 seconds of every minute are advertising time. Balance 50 seconds are talk time. Advertising and talk time cycle continues till the time call ends.

Every SMS that is sent has a footer advertisement of 25 characters.

At the end of every call, the caller and the receiver receive an advertising SMS.

Balance inquiry SMS has a footer having a 25 character advertisement.

Will consumers mind being exposed to so much advertisement?
Every sane individual knows that there is no such thing as free lunch. When a consumer is not being charged a penny to talk endlessly, she has to give something back. In this case, this something is 10 seconds to hear annoying advertisements for every 50 seconds of her talk time. Any rational human being like me would accept this fact of life even if she gets annoyed by the frequent intrusion of advertisement. We all are habituated of hearing rubbish all the time – at home, office, street, TV and where not. Does it make a big difference if we are forced to hear 1 minute of advertisement for 5 minute of free talk on phone? In India, only a fool will let pass this opportunity for free unlimited telephony! In any case, those who don't want to listen to the advertisement can always opt for the paid telephony option.

Will telecom provider find enough advertisers for profitable operation?
Of course yes. There are two compelling reasons for advertisers to opt for this new advertising medium. First, there can't be more apt medium for highly targeted advertisement. Telecom providers maintain excellent database of their customers which includes personal details. In any case, when offering free telephony, telecom service providers can always ask for more personal information from their customers to help the companies find right target audience for advertisement exposure. Second, it's a medium where the consumer can't shift channels to ignore advertisement. They are forced to hear it all, actively or passively, as they are still on line with the other person. These two reasons will not only fetch advertisement revenue for telecom service providers but will also help them in asking for a premium over other advertising mediums.

What it means for advertising industry?
It's a sweet-n-sour deal for them. On one hand it will open a new source of revenue; on the other hand it will demand high level of creativity and out-of-the-box thinking to survive in this medium. In this new medium, only 10-second ads are possible to ensure that the operation runs with least glitches. So telling all stories for all brands in 10 seconds flat would be the norm making the whole process extremely demanding.

A caveat for telecom service providers
This free telephony would result in quantum jump in talk time volume leading to acute network congestion. So strengthening of telecom infrastructure to cope multiplication of call volume is a necessity. Without extraordinary infrastructure, the concept of free telephony cannot take-off.

Isn't the idea of free telephony in India an idea that can change the world of millions? I feel it is. Will someone say, "What an idea sir jee?"

One Story; Multiple Brands

2008-08-30T22:51:00.002+05:30

Everyday while driving to work, I get to see huge billboards advertising products and services on the road side. Today, a thought crossed my mind. Isn't the space too big for a brand? Annual lease for such billboards run in lakhs of rupees. Isn't it possible to have more than one brand in one hoarding in such a way that there is one story about two or three brands and not separate stories? It sounds absurd and blasphemous but may be there is some value in this madness.

Why the idea can work?
In a cluttered world, more than anything else brands get noticed by the simple yet engaging story they tell. It is all about the story your brand can tell, with or without the spoken words, in the few seconds of attention a consumer grants to open an opportunity window.

Unlike products stories are not physical. Stories are a communication medium; a kind of bridge between message sender and message receiver. They are all about integration of thoughts and ideas in a coherent way that conveys the intended message. Due to this nature of story, it is very much possible to weave one story on two or more brands without diluting the essence of any of the brands involved. It's all about right synchronization of the story and the participating brands.

The key to such experimentation is the degree of maturity level of respective marketing team and their advertising agency. The higher the level of maturity in understanding their own brand, better their expectation from one another in their marriage on billboards!

How it can work?
For this to become a reality, advertising agencies will have to show guts to experiment. It will not only take a high degree of creativity to execute a campaign but also persuasive powers to bring all the stakeholders together to solemnize the marriage of brands on the billboard. The problem is easier to solve if the advertising agency is common to all brands involved. If different agencies are involved it will become a tough nut to crack and will require a high level of collaboration and check on creative ego!

Absurd as it may sound, my gut feeling says that it can work, not only in outdoor media but, may be, in electronic and print media also if some out-of-the-box thinkers indulge in out-of-the-box creativity. Any takers?

Leadership Mantra

2008-07-29T20:10:00.006+05:30

"Leadership is action not position."

Noticed this beautiful quote on the wall of a multiplex in Mumbai. It succinctly sums up the essence of leadership.

Very often people complain that they were unable to bring about change because they didn't have the authority or the position to execute. Perhaps this is the biggest excuse for avoiding action. The truth is that anyone, irrespective of position and authority, can practice leadership. Leadership is all about action and action is neither big nor small. True leadership is about taking action for what one feels is right. It starts with self and gradually influences the surrounding. It's like an expanding circle, starting from the center (you) and gradually moving outward to increase the circle of influence to lead more and more people to desired action.

Mahatma Gandhi once said, "Be the change you want to see in the world." Great leadership always starts with personal leadership - action guided by a vision. Every action creates a ripple of change. More the action, the more ripples of change are formed to influence larger and larger mass of people. But everything starts with an action just like a long journey starts with a single step.

Even if you are a nobody, you must act. Embrace action to lead yourself to your vision. Sooner than later, the world will follow you. Lead the world by leading yourself through action.

Activity Based Performance Appraisal

2008-03-02T21:18:00.001+05:30

In a typical corporate environment, one has to get things done through interaction with a number of people from various internal departments. Though your work depends on contributions from multiple heads, only a few directly report to you and many don't even indirectly report to you. Sometimes situations become tricky when pleading, badgering, threatening, cajoling, praying, etc. don't seem to work. The only respite in such situations is escalating the matter higher up with possible onset of another set of problems like departmental blame game resulting in even more friction in intra-department working relationship. Is there a way out from this dilemma?

Take an example of a Brand Manager. He has to interact with various internal departments like sales, R&D, finance, packaging, and purchase over which he has hardly any direct or indirect control. Yet the poor guy is expected to get things done (after all he is the CEO of his brand) by playing hard-ball or soft-ball with all these agencies. Sometimes things move smoothly while many times too much heat gets generated from friction. Personal egos emerge and personal agendas come. Yet, like Titan, he is expected to slaughter all obstacles. This poor guy's life would be much easier if the people he regularly interacts with have some proportion of their performance appraisal based on how they help this brand manager achieve his goal. What I am talking about is - Activity Based Performance Appraisal (ABPA). Wow, it seems I have coined something fancy and hopefully useful!

So, what happens in Activity Based Performance Appraisal? Let's see using the same Brand Manager example. For the sake of illustration, let's assume that six people are in play – Brand Manager, Packaging Development guy, R&D guy, Finance guy, Purchase guy, and sales guy. Typically, a brand manager would be handling one brand while guys from packaging development, R&D, Finance, Purchase, and Sales would be working on many brands (say, 5 brands).

In this example of Activity Based Performance Appraisal (ABPA), 50% performance appraisal of the Brand Manager would be done by the guys from packaging development, R&D, finance, purchase, and sales while the balance 50% would be appraised by his immediate boss. Similarly, 50% of performance appraisal of guys from packaging development, R&D, finance, purchase, and sales would be decided by various Brand Managers for whose brands they work in the ratio of time spent on each brand while balance 50% of performance appraisal would be done by their immediate supervisors based on quality of their work related to their technical area.

Of course this is just an idea. For making it work, it would need company specific judgement and refinement. But once implemented, Activity Based Performance Appraisal (ABPA) would ensure that no one takes the other for granted. Things would move smoothly and lesser degree of follow-up would be required to get things done. Democracy will come to organizations!

Nuggets of Management Wisdom #20

2008-02-29T18:26:00.000+05:30

A battle is never won with good Generals and mediocre troops.

Some companies suffer from a deadly corporate mentality that espouses the belief that if you appoint a few good Generals, you can sail smoothly even if you don't give much care to your troops on ground zero. But the question is – is it possible to win a battle with well fed Generals sitting in teak paneled offices while under-fed and mediocre troops fight it out?

Generals can use their experience to give direction, but it is the entire troop that executes the strategy by using their brain and brawn. The quality of execution of a strategy not only depends on how good the strategy is but also on the quality of the troop that will execute it. A troop that is sharp, agile, motivated, well-fed, and empowered to think and act on its feet is bound to execute much better than a troop that is mediocre, under-fed, demotivated, and disempowered.

The truth is very simple. For superior performance, you have to keep the strength, motivation, and empowerment well distributed across your organization. Any intention to concentrate them at one point at the expense of other points is bound to spell disaster sooner than later. A healthy body is one which has all the parts of the body working together in a well synchronized manner. If any part of human body ails, performance of the whole suffers.

Nuggets of Management Wisdom #19

2008-01-12T21:22:00.000+05:30

Don't promote the culture of "confirmation bias" if you want your organization to achieve greatness.

Time and again I have noticed that a large number of people in organizations suffer from "confirmation bias", a deadly corporate disease that attracts you to people who think in the same patterns as you do, while repels you from people who don't think at the same wavelengths as you do.

This is a serious problem. Ideas always blossom amid diversity of thought and action. If the diversity is discouraged, staleness sets in any organization and one finds oneself gasping for fresh air in such an environment. In current times, when world is always in a flux and operating environments of organizations are extremely dynamic; innovation and execution come at a premium. Innovation is something that realizes its full potential only when divergent minds meet and collaborate to shape it up. So is the case with flawless execution; multiple hands of many a thought collaborate to execute an idea to action. When you exhibit "confirmation bias", you stifle the flowering of ideas and innovation in your organization as there is always an "inside-out view" in play without any "outside-in view" to spice up the things and let the creative juices flow in search of an out-of-the-box solution.

One major offshoot of the "confirmation bias" disease in any organization is that it repels talented people away from the organization. In a culture that promotes "confirmation bias", it is very difficult, perhaps impossible, to attract and retail talented people. Talented people tend to question the status quo and often look away from routine way of solving problems. They tend to ask difficult questions and challenge others, even their superiors. This threatens comfort zones of people who are deeply rooted in the culture of "confirmation bias" and prompts them to alienate, ignore, or even punish those who think differently. As a result, talented people tend to move away from an environment that punishes them to think differently.

In the end, it is the organization that suffers. In the absence of an internal environment to fuel fresh, innovative, and divergent thinking, it keeps doing same thing again and again till it is done to death by the ever changing external environment.

New Product Development

2008-01-11T22:52:00.000+05:30

New product development is always a tricky business. A certain degree of uncertainty is intrinsic to the process. Some new products click while many fail. Yet, despite the uncertainty and risk, chances of success can be improved to a large extent with some commonsense.

I am often surprised to see that again and again new products fail in market not because of lack of resources to market it or the product's attributes and features, but due to marketer's inability to understand the consumer and her need - obvious or hidden. The problem starts with marketer's myopic thinking. The culprit is 'company centric' view of a consumer. This 'company centric' view of consumer comes in various flavours, all equally lethal for company's health and well being. Below are some samples:

Marketers try to make a product that they feel is best for the consumer and then go and try to sell it to them. Most of the time this approach fails because how a marketer views the needs of a consumer is often vastly different from how a consumer views her needs!

Marketers get a brain wave for a new product idea. They develop the product after investing lots of money and resources. Once the product is ready, they start searching for consumers who could buy it. It's like shooting arrows in a blind allay in the wild hope of hitting the bull's eye. Seldom have they succeeded.

Marketer sees a product at some far away land and feels that the product seems so nice. He comes with a sample and hands it over to his R&D people to develop a similar product for his market in his country. Once the product is ready, he starts searching for consumers to sell it and then finds that the overall market for the product is so low that there is no business sense to launch the product.

Successful product development has few basic features apart from the luck factor. From what I have observed in my career so far, great and hugely successful products are built around following pillars;

They are backward engineered from consumer. Hence, when developed they have a ready or at least, a latent market to tap.

They are simple from consumer's point of view and satisfy her needs in a simple way sans complication and at a price and experience that gives her maximum utility value and satisfaction.

They have a 'consumer centric' DNA.

New product development requires simplicity. It needs to put the consumer at the center of the gravity and then develop itself around the consumer. This is perhaps the only way I know to develop great products that are loved by consumers and are commercial success.

In the world of marketing, only those products end up with consumers which start with consumers.

Fighting Attrition - An Idea

2007-12-09T19:39:00.000+05:30

Human nature is such that it gets stimulated most through steady flow of rewards even though they may be small. They key is frequency rather than magnitude of reward. I was just wondering whether this fundamental human nature can be exploited to tackle the menace of attrition in organizations.

We have appraisal system that may be quarterly, half-yearly, or annual affair. Bulk of the reward comes annually through promotion, raise, trips, bonus, etc. Even though many companies give rewards half-yearly, the proportion of these is extremely low in the total reward universe.

I have a simple question - can't we divide the annual reward package into many smaller parts to give at regular interval to employees and associates? This would not put significant additional burden on the organization but will definitely play a psychological trump card to engage employees. And even the additional burden would turn out to be much less than the cost of attrition.

The biggest advantage of this reward mechanism would be its role as a motivation accelerator. Frequent rewards in various monetary and non-monetary forms can help in effective engagement while keeping the morale of employees high. These small but frequent rewards would act as a validation of their capabilities and talent. These would force them to think that they are valuable for the organizations and their contributions matter in the well being of the organization.

I feel it's worth experimentation.

The New Marketing Agenda

2007-11-02T21:27:00.000+05:30

We have always been trained to hard-sell to customers through various marketing vehicles. This worked well in the old economy. But the big question is - will it work in web 2.0 world? I predict it will not. In the last 10 years, world has witnessed a shift from scattered islands of civilization to a highly sophisticated network of seamless human interaction. Suddenly, we are finding ourselves at the center of the universe with ability to tap into endless choices and resources. In this networked era, hard-sell sounds like a pre-historic concept. When the reach of customer was limited and choices few, hard-sell made sense. But with endless options to choose from and virtually entire universe to tap into, hard-sell makes no sense at all. Everyone is hard-selling and creating noise resulting in a cacophony which only irritates customers.

In this changed equation between customers and marketers, the rule of hard-sell is giving way to the rule of being found. The essence of this rule is to strive to generate that 'aha' moment we feel when we discover something amazing. The new marketing challenge is how to play the game of treasure hunt and help customers discover products and services and let them feel the 'aha' moment more often.

There are four factors driving this shift to the concept of findability.

Suspicious customers
Today's customer is suspicious. She thinks that all marketers are liars. From the time she wakes to the time she sleeps, she is bombarded with sales pitch to buy something. Naturally, not everything she is pitched with is good for her. Some may be good and some totally harmful. How can she trust? How can she decide? Suspicion, as a result, is at the highest level and every sales pitch is viewed with utter distrust. The problem is that the confidence level of customers in products or marketers is at its lowest ebb. The only way to engage such a customer, who is high on distrust and low on confidence, is to help her find what is best for her without active sales pitch or hard-sell.

Miracle of network
World has become a highly connected network, thanks to the internet. An average customer has access to information across culture and geography which her forefathers could not have even dreamt of. Network has jettisoned her to a world of plentitude where she may not like 99.9% of what she encounters. But 0.1% is something that can fill her with a sense of joy and satisfaction that only she can feel and understand. And, this joy of discovering that 0.1% is hardly related to satisfaction of her basic need. It is something higher. Her ecstasy is because of the satisfaction derived from her ability to serendipitously discover a fish, she could relate with, from a vast ocean. It’s a joy of discovery; no less than the joy of discovery Euclid felt in the bathtub which made him run on the street shouting "Eureka, eureka."

Virtual neighbour
Customers may love their neighbour or hate them but they indeed hear them. Since ages neighbours have played a role of adviser and influencer in purchase decision, apart from being the agents of "neighbour's envy, owner's pride" syndrome. Earlier, neighbour was a localized phenomenon confined to surrounding households. But now, thanks to the power of network, concept of neighbour has acquired a global status. Today, we have 'virtual neighbours'. These days customers find the neighbourly advice on internet all too often in the form of recommendations, user feedback, rants, blogs, discussion boards, groups, forums, et al. The challenge before marketers is to find ways to use the 'virtual neighbour' syndrome to their advantage.

I am what I am
Every customer is part of a larger group yet she is also an individual. The individual aspect is increasingly making its presence felt in decision making. It doesn't mean the end of mass production or mass marketing rather it means a new challenge for marketers to include individuality to mass marketing campaign. It's like designing a marketing program to appeal to the masses yet emanate some subtle individualistic theme with which the customer can connect. Here, the essence of the brand remains same though how an individual customer experiences it may be different. It's like conveying "there is something for everyone to relate to."

In light of the above, the new challenge before a marketer is to devise ways in which his brand can get discovered by the customers and in such circumstances that they feel an 'aha' moment and emotionally relate to it.

Building an "architecture of discovery" can be the solution to this challenge. But that is going to be the subject of another blogpost.

Nuggets of Management Wisdom #18

2007-10-08T23:38:00.000+05:30

Skepticism, if used diligently, can bridge the chasm between unrealistic expectations and realistic possibilities.

The world of business is not perfect. In fact, it is not supposed to be perfect. It is perhaps a collage of contradictions. Every situation is grasped differently by different individuals. Some see amazing potential in an idea, while others trash it. In such a scenario, the real challenge before a leader or a manager is to how to bridge the chasm between two extreme ends to marry optimism with reality.

Skepticism may be the answer to this challenge. Skepticism, as in philosophy, is based on the principle that "there is no such thing as certainty in human knowledge." The word is derived from Greek verb "skeptomai" which means "to look carefully, to reflect."

Generally, skepticism in business is taken with a negative connotation. But, I feel, this should change and skepticism should be used as tool for "reality check" of an idea or situation. Every idea or a situation, seemingly however breath-taking or absurd, should be subjected to a series of harsh questioning. Only upon passing this trial by fire questioning session, should an idea be approved or rejected. This is not to see any idea or a situation as suspicious; but to see it as a hypothesis and test its validity by trying to prove it wrong by all means of logic and questioning. A great idea in all likelihood would survive the grind while many a hollow idea, though brilliant sounding, will perish.

Of course, this is not a full-proof way of assessing the potential of an idea or a situation. Mistakes will still happen. Nevertheless, the success rate of striking gold and avoiding future disappointment would be higher with the help of diligent skepticism.

Cutting A Long Story Short...

2007-10-07T21:45:00.000+05:30

As a marketer, I want the biggest bang for my bucks. With tight budgets and astronomical expectations, every penny counts. In such a scenario, when advertising agencies come up with 80 seconds and 120 seconds creatives, it becomes tough not to lose cool.

Advertising is a business of story-telling in as few words (I must add seconds also) as possible. If it takes longer and longer (both words and time) for an agency to tell a story, they definitely are not masters of their art. In current scenario, I am slowly coming to a conclusion that if an agency can't tell a story in 20 seconds flat, they are either too lazy or too dumb!

Average attention span of a consumer is declining at the rate of speed of light. With a stressful life at every step, who has the time to concentrate for long on advertisement of a biscuit, or hair oil, or soap? If something doesn't grasp her attention in first 5 seconds she changes channel. Similarly, if something doesn't tell its story quickly (20 seconds) she changes channel. Patience to watch irritating and long commercials is not the cup of tea of current consumer. To grab her attention, you need to be a master in the art of quickie. Else she will become trigger happy and kill all your investments in production and airtime.

An off-shoot of this rapidly declining attention span is the growing importance of frequency. It is not that reach is not important; but with a disinterested consumer, the only way to get some attention from her is to bombard your advertisements on her as many times as you can without irritating her too much. In the current scenario, I feel that one can trade-off reach with frequency to some extent but trading off frequency with reach would be catastrophic. And the best bet to increase frequency is to have short and sweet creatives to get the most mileage from the spending on commercial time. By reducing length of advertisement from 80 seconds to 20 seconds, one can increase the frequency by 4 times (assuming everything else as constant)!

Isn't it time for our advertising gurus to don their thinking hats and set a 20 seconds limit on their creative works? If they could tell the brand story in 20 seconds, it would be true reflection of their creative brilliance. The end result would be a win-win situation for both the brand and the consumer!

Surviving in Times of Massive Change

2007-09-22T20:07:00.000+05:30

"In times of massive change, it is the learner who will inherit the earth, while the learned stay foolishly tied to a world that no longer exists." - Eric Hoffer

This is one thought on which every executive must ponder upon, particularly those who are on the wrong side of age. This is a very relevant thought for the present times when almost everything in business, technology, and society is undergoing massive change. Unfortunately, many of the experienced people fail to recognize these massive changes and how these changes, many a time, make their vast experience and learning meaningless.

By failing to adapt to the new realities, they keep themselves and their organization stuck in the past. When things demand radically different way of managing things, these learned people keep on applying the old tricks and tactics that may have worked in the past but have become pre-historic in context to present and future. More often than not things never seem to work. Instead of making any progress, things seem to move backward.

In these times, only those survive who see themselves as life-long learner and continue learning new things to tame present and future. Those who think they have had enough learning, fail all along.

The key to survival and growth is to cultivate LFA, the acronym coined by me which means "Learning Focused Attitude."

Nuggets of Management Wisdom #17

2007-09-21T23:04:00.000+05:30

Rate of growth up the corporate hierarchy is directly proportional to the rate of growth of one's skills at critical questioning.

Visualize this scenario: I go to my boss fully prepared. After hearing me he asks a few questions, some of which I never thought existed, and I and my plans are floored. I think my boss is very smart. After an hour, I accompany my boss to the cabin of his boss to discuss a proposal. My super boss asks a few questions to my boss, some of which he never thought existed, and he squirms in his chair. I guess he must be feeling the same way I felt when his questions floored me!

This was one of the corporate eureka moments that I sometimes hit upon. Someone is your boss because he can ask better questions than you. Corollary, if you want to step into your boss' shoes, consciously upgrade your skills at critical questioning.

Of course, critical questioning has a lot to do with experience. But at the same time, I have noticed that skills at critical questioning can be remarkably improved by consciously asking "why" again and again. "Why" is perhaps one of the most powerful words of management but often quite underestimated and underutilized.

If you want to rapidly move up the corporate ladder, you should sharpen your skills at asking incisive and unexpected questions. Your best friend in this endeavour would be the power of "why". Never accept anything as perfect. There is always some scope for improvement and value addition. Consciously ask "why" all the time and you would be surprised to see yourself on the fast track.

Growing Marketer Customer Disconnect

2007-09-08T23:16:00.000+05:30

Two weeks ago, I was at a dealer relationship meeting. After the usual stuff of entertainment, the dealers were updated on latest happenings in the company and how they were going to make the company achieve greater heights in coming years. Though I could feel that they were least interested in that and more inclined to know what gifts and prizes were there for them. Post that, latest TV advertisements were shown to the esteemed audience and to everyone's surprise, majority of dealers couldn't understand the latest TV ad that was getting critical review across creative circles!! To get the Ad entry into their brain, Head of Marketing had to explain the Ad which meant rendering a laymen's version of some universal concepts of science. Whew!

This led me to think -

Are we, marketers and our better halves (advertising agencies), getting away from realities of life?
Are we making advertisements to justify our own grand views of the world and customers instead of telling a story to build brand and increase sales?
In the name of creativity, are we forgetting our target audience?

A cursory look at the current breed of advertisements would tell the truth. The fact is that 80% of the advertisements doing the rounds on TV are useless as far as their primary role of story telling to sell a brand is concerned. Some are so bad that I wonder whether the brand manager and advertising agency worked on the advertisements in their sleep. And then they call them clutter breaking commercials!!

Seeing the current crop of advertisements on TV, I often wonder whether our advertising is progressing or regressing.

Whatever may be the case, one thing is certain that we are seeing a spurt in population of what I call "apartment managers", the special breed of managers who see world in terms of the apartment complex they live in! The result is increasing myopic vision about customers. The end result is often - an advertisement or a marketing campaign that validates perceptions of our own little world but is far away from the realities of larger world.

Isn't it time for the brand managers and advertising people to spend more time meeting customers, understand their way of thinking and doing things, and walk for a while in their shoes to get an inner glimpse of their lives? Doing this instead of plotting marketing and advertising strategy to fit their "apartment view of world" would bear more fruits and would bring the marketer much closer to his customers.

By the way, any guesses about what proportion of Indian population must be aware of gravitational force of earth?

On A Lighter Note...

2007-08-20T23:53:00.000+05:30

Recently, after repeated exposure to the romantic advertisement of Pond's Age Miracle, I was wondering why no men's organization is coming forward to take up the cause of men. Well, may be because there is not even one men's welfare organization. But this advertisement is a cause big enough to form some organizations meant for raising causes for men. Well, don't get confused. Here I come directly to the point.

Sometime back fairness cream advertisements created a lot of fury. Things were said like it promoted discrimination. Some pointed to the projection of dark skinned ladies in bad light. And to add fuel to fire a lot many women's welfare organizations (ya there are indeed lot many such organizations in every nook and corner of India) took to streets burning what not. The universal judgment was - thrash the company making such advertisements and tag them anti-women and insensitive folks.

On the same note, does it not appear that the Pond's Age Miracle advertisement is insensitive to men? It portrays men as cruel creatures who don't take good care of their wife when their wife starts ageing and wrinkles start appearing on face. They regain their caring and loving nature only after their wives start using anti-wrinkle cream to bring back their youth. How crass, isn't it? I almost shouted, "Sue HLL…oops HUL. These folks are playing with the sentiments of caring married males." Alas! Not a single men's welfare organization is there to take up this noble cause of exposing the insensitive folks at HLL…sorry, HUL.

Now I can understand why men are in such a sorry state universally.

Process: Enslaver or Liberator?

2007-07-29T22:33:00.000+05:30

Well-designed processes are an integral part of an efficient and effective organization. But just having processes is not enough. Many a time, the processes are there but are flawed thereby crippling the organization. The key lies in having well-designed processes that enhance the quality of output in the organization.

The problem arises when processes become the end rather than means to an end. For ensuring the smooth running of organization with absolute effectiveness, it is vital that processes play an enabling role and act like a catalyst. Simplicity is another key aspect of good processes. But more often than not, we encounter processes that are complex and disabling in nature. Instead of simplifying things and increasing efficiency and effectiveness, they complicate things to the extent of achieving the exact opposite of their objective.

One of the reasons that I have noticed for processes turning into disabling agents is the desire of managers to over-simplify things to control everything. But inadvertently, the over-simplification leads to over-complication. Breaking matter into atomic units is not simple yet it is a simplification procedure. Similarly, in an organization over simplification leads to complexity. In reality, it is foolhardy to try to simplify everything to its basic unit. Not only it is impractical, but it is a sure shot sign of disaster. Running an organization is not based on a mathematical formula where two plus two is always 4! And one should not try to develop a mathematical formula to run an organization because running an organization is a combination of reason, emotion, and judgment. Due to the inherent nature of organization, there will always be certain degree of uncertainty and complexity. Beyond a point, all efforts towards simplification will lead to more complexity. So, it is important to know when to stop.

I feel the key to designing enabling and simple processes is to understand that processes are not meant to control things; rather they are tools to help organizations achieve their objectives effectively. Once there is this understanding, the desire to over-simplify things would give way to designing processes to align them with business objectives and people element. And that would liberate organizations to spread their wings and fly!

How To Kill A Great Organizational Initiative?

2007-07-17T17:15:00.000+05:30

Very simple!

Make a two-page long office circular glorifying the idea…

Then send it to everyone either through email or hard copy…

Sit back and relax expecting people to follow each and every word of the circular as heavenly wisdom.

Well, it may sound funny (or may be not) but I know this is one reason why many great organizational ideas fail as soon as they start their execution phase. The missing link is COMMUNICATION TO KEEP AN IDEA FRESH IN THE MIND OF PEOPLE so that they keep thinking about it.

A worthy example worth sharing. Once upon a time (not in ancient time but just a year back) CEO of a company had a brilliant flash of idea one day to bring in more energy into his people and increase the productivity of the organization. So he invented a grand concept based on the concept of hemoglobin, transporter of oxygen to our body cells. He called his concept "xyz-globin" where xyz were the initials of the company name. He even detailed what it signified and how to bring it into action. He urged everyone to increase their "xyz-globin" so that it reflects in the work. And he dashed the 2-page circular to only his top team asking them to follow it and spread it down the order. The Holy Grail coming from a CEO doesn't go unread. So it was read in all due respect. A few smiles also followed. And in a matter of few hours it got buried in the piles of paper. One year has passed and the concept, which I must admit was nothing less than brilliant, has long been buried far away from public psyche. As a memento it finds an honourable mention in some manuals that are seldom read or used. Peace!

Why this brilliant idea capable of challenging people to push their limits and deliver their best failed in its mission? Because it was not communicated effectively by the leader to the extent that it set the fire in his peoples' belly.

Had I been in this CEO's shoes, I would have used a completely different technique to drive home the point. Instead of sending them circular, I would have gathered them informally in some corner and explained the concept of "xyz-globin" through a story that was fun and engaging. And then I would have followed it up by everyday randomly asking various people about their "xyz-globin" level. I would have gone to the extent of looking into the eyes of an upbeat and cheerful looking manager and enthusiastically saying, "Man, seems like you are high on 'xyz-globin' today." Or, going to a manager who looked downcast or sleepy and tell him, "Buddy, guess your 'xyz-globin' level is drastically down today. Perk yourself up man." And if the CEO does all these, can his men be far behind. Within a few months this would have caught a wild fire where people would have been asking one another about level of "xyz-globin" resulting in fun-filled energized and engaged workplace that delivered best quality of work.

Well, that can wait till I become the CEO. Amen!

Now coming to the role of communication in execution of an idea or plan, there is only one rule I know that works. EFFECTIVE COMMUNICATION IS THE BRIDGE THAT LINKS GREAT IDEAS TO GREAT EXECUTION. It is naïve to think that if you give a road map to people they will just follow it as it is. They will not unless you ensure that it climbs to the same level of priority as it is on your priority ranking. People have hundred things on their mind; the thing that attracts them the most will occupy their attention and energy. Here, communication plays the vital part in ensuring that people get attracted to what you expect them to do and they remain attracted to it till the job is done. A seasoned manager once summed it nicely, "Logon ko hilana dulana padta hai" (people need to be shaken and stirred to action)

Future of Brand and Branding

2007-06-23T23:02:00.000+05:30

It's fashionable these days to tell the whole world that brand and branding are going to be dead soon! From academicians to retail managers to activists, all are busy writing epitaph for brand and branding. Well, I don't think that a day will ever come in future when brand and branding become irrelevant. Brand and branding are, perhaps, universal things that have been there since time immemorial (think about Picasso signing his painting, shepherds marking their livestock, and in ancient time potters putting special mark to identify the creator). It is equally certain that brand and branding will remain relevant as long as civilization exists on this planet. The reason is simple: Brand is something intrinsically connected with identity, and identity is something that will always remain relevant as long as there are human beings!

The question whether brand will be relevant or not is not important for the simple reason that probability of brand becoming extinct is too remote. The intelligent question to ask is how brand and branding will evolve in future and what challenges marketers will face.

Suppose you are one eligible guy looking for your life partner. There are 10 gorgeous girls willing to marry you. All are equally qualified as per your expectations. All are breathtakingly beautiful. All can talk well. All can say hello to you with a perfect smile. All are charming. Now young man, whom will you marry under the constraints of Indian Law which allows you to have only one wife. In all likelihood you will scratch your head and curse Indian Law regarding marriage! But since your mom is watching you with stern eyes, you know you have to decide fast.

So you start talking to them individually and carefully observe subtle details that convey a lot of things about personality. The way she smiles, the way she laughs at your silly jokes, the way her eyes twinkle when you say something, the way she blushes, the way she responds to your questions, the way she interrupts you, the way she giggles, the way she shows care and affection for you, the way she tests you, and the list can go on. There can be 'n' different clues to read based on which you can take a decision and decide the girl with whom you want to grow old.

Branding in future will be no different. A large number of products will have equal physical characteristics. They will have equal quality. They will have equal properties. They will all satisfy basic needs equally well. They will all have equally appealing external communication. In short, extreme commoditization will become a norm. Yet, a few of them will stand out and entice customers to start a relationship with them; not because of their physical or intellectual beauty but because of their subtle interaction with the customers that give enough cues to them to think that it is one brand they want to grow old with.

The key to branding in future will be multi-dimensional interaction with the customers at every possible touch points in customer's life. Branding will have to evolve into a combination of logical, emotional, and experiential curry that not only tastes exotic and out-of-this-world but is realistic and healthy too. Branding in future will be all about simultaneously activating the head, heart, and all the senses of the customers. And that's the challenge marketers will face in future.

Bureaucracy - An Unnecessary Evil

2007-06-20T00:41:00.000+05:30

Bureaucracy is one of the greatest evils in organizations. Often the roots of bureaucracy are in the process of continuous addition of layers in the organization which inadvertently leads to duplication of work. Layering is a natural process in a growing organization. But at the same time it is the breeding ground for bureaucracy that may ultimately become a growth choking agent. Hence, it becomes a paramount responsibility of senior managers to consciously and frequently delayer the organization by purposefully identifying and culling layers where duplication of work happens without any significant value addition.

An example – I have often seen request for routine approvals landing on a senior manager's table with signature of atleast five different managers who had already reviewed it. I don't understand what kind of value addition the sixth manager is going to do! I firmly believe that if anything meant for approval is moving beyond two levels from the level of origin it's a sure sign of bureaucratic mismanagement. Even two levels is extreme in my scheme of things and comes with a caveat that not less than 90% of approvals must get closed at the level of immediate boss and only 10% should move to the super boss level for closure. But if it takes more than two levels to close an approval request, either you don't have right people to make right decision at various levels or you have simply created multiple layers to duplicate work without any real value addition.

The biggest problem with this addition of layers is that it slows things down to an absolutely uncomfortable level. An offshoot of this phenomenon is hanging decisions for further analysis and discussion. And the loop seldom gets closed in a reasonable time. It's true that taking decisions quickly means a slightly higher probability of committing mistakes. But I feel this slightly higher probability of making a wrong decision is preferable to frequently slowing down the organization by indecision. The speed and action orientation of faster decisions more than compensates for occasional wrong decisions. Also, those who are successful never feared making mistakes!

So what you, as a manager, must do. First, keep questioning every layer of your organization by constantly asking ‘do we really need this layer?’ Second, don’t shy away from de-layering if any layer is not adding any real value or if a layer becomes redundant by streamlining the process at some other layer(s). Third, prevent duplication of work by insisting on doing it right at the first point itself through delegation of proper authority and accountability. Fourth, focus on enhancing the quality of people and processes, the two most powerful weapons to fight bureaucracy.

To sum up, if you want to keep your organization agile and free from bureaucracy, do everything you can to make it lean, mean, and empowered.

Leader

2007-06-10T22:46:00.000+05:30

"A leader is best when people barely know that he exists; not so good when people obey and acclaim him; worst when they despise him"

- Lao-tzu, ancient Chinese philosopher

Nuggets of Management Wisdom #16

2007-05-26T10:15:00.000+05:30

Buying time is an old tactic. Never let your people delay things by buying time every now and then on one pretext or the other.

Working with senior management is pure delight at times as you get to learn wisdom gathered over years of experience in classic one-liners. A few days back, a President, with over 30 years of management experience, reprimanded a senior manager, who was asking for more time than necessary to implement a new initiative, by saying "buying time is an old tactic."

Later, when I pondered over this, I realized that we often avoid doing certain things that are beyond our comfort levels. And we do it in the politically correct way of "buying time". Procrastination is a bad habit and "buying time syndrome" only legitimates it. But this does no good to anyone. It only results in inordinate delay in getting things done and situations spiraling out of control.

So the lesson to be learnt is simple: First, don't buy time yourself. Second, don't allow others to buy time. Corollary of the lesson is – Just Do It!

Nuggets of Management Wisdom #15

2007-05-17T23:20:00.000+05:30

Leadership is all about inspiration, persuasion, trust, fairness, and transformation of ordinary to extra-ordinary.

Leadership can at times seem very simple yet at other times abstract. I often ask myself – what makes great leaders? Having observed some remarkable leaders in my life and also having read about many great leaders, I feel that despite the difference in leadership style there is a common thread running in between the methods and madness of all great leaders.

All great leaders inspire people to action, they have amazing powers to persuade people, they have immense trust in their people, they are fair when dealing with their people, and they are driven by a desire to transform anything ordinary to extraordinary.

I feel anyone can become a great leader if one practices to live these five virtues of great leadership everyday of one’s life.

Armchair Strategists

2007-05-13T12:03:00.000+05:30

There is a unique species in corporate world. Its name is “Armchair Strategists”. These are frequently found at higher levels of corporate hierarchy. Their specialty is that they tend to think that they know everything that’s happening around even without venturing out of their cozy and spacious offices! So confident they are of their ability to read things without venturing out that they keep imposing upon others decisions that reinforce their grand views about everything. It’s another matter that what they think is often wrong and way apart from reality. The reason is simple – unless you roll up your sleeves and go out and poke your ears and eyes around, reality is not bound to enter your head, however experienced you may be!

There is a Chinese proverb that goes like “Hearing a hundred times is not as good as seeing once.” This is attributed to a veteran Chinese general, Zhou Chongguo, who, when asked by Emperor Xuandi about the number of troops he would require to defeat the invasion from the North, replied –

“Hearing a hundred times is not as good as seeing once. Warfare is not a matter of guesswork. I will have to go to the front to see for myself how the land lies before I can formulate my strategy.”

Perhaps, our “armchair strategists” from the corporate world need a lesson from General Zhou Chongguo on the importance of moving out of their cozy offices to visit their markets and talk to their customers more often so that they can see what is happening around and not rely solely on their experience or what their people tell them about what is happening around.

Frog Mentality and Competition

2007-05-07T22:17:00.000+05:30

There is an old frog parable. It says that if you put frog in boiling water it will immediately jump out with all its energy to save his life. But if you put a frog in cold water and then slowly heat the water, the frog will eventually die as the water becomes hot.

This is the frog mentality, a mentality that blinds us to the changes happening around us. In corporate world, this frog mentality is widespread, particularly in handling competition. If the competition hits hard with all its might in one go, people react like a frog thrown in boiling water and do all they can to save themselves. But if the competition attacks slowly and gradually, they fail to notice the changing environment and end up dying a slow death. Since smaller but serious competitors often attack slowly and gradually instead of hitting their bigger counterparts with a big bang, the second scenario of a slow death due to inability to read the environment is all too common in corporate world.

The problem is acute in companies having big brands with big market share. They have a tendency to wallow in their arrogance and laugh at the covert and overt moves made by competitors. MNC giants like Unilever learnt it the hard way when Nirma gradually ate away their market share in detergents with some smart maneuvers. By the time Unilever realized that its tail was on fire, it was too late to use fire extinguisher! In Indian context, similar were the stories of CavinKare's attack in the shampoo and the fairness cream segments where Unilever again found itself at the receiving end; and the attack by Priya Biscuits on Britannia's stranglehold of cookies segment. In international context, slow and gradual onslaught of Japanese car makers led by Toyota is a historic example. Other examples could be gradual dominance of Korean and Japanese appliances manufactures to the detriment of giant American appliances manufactures. If looked beyond surface, it would emerge that the common thread running between all these examples is the frog mentality on part of the incumbent and a nimble-footed, flexible, and consistent strategy of the challengers.

This frog mentality is bound to make many giants tumble if they don’t learn to recognize the changes in competitive environment. At least in India, I can see that days of many a big brand might be numbered due to complacency on their part to recognize the existence of competition. Non-acknowledgement of a reality is the easiest way to move towards a disaster.

I have seen very senior managers trying to hide the fact that competition exists; at least they underplay the impact of competition. Instead of accepting the presence of an aggressive competition and chalking out a strategy to minimize their impact, senior managers discard it as not worth attention. If anyone brings to their attention the growing menace of competition, they dismiss it as mere panicky behaviour. They consider themselves too big to get hit by competition. In the process, they forget that some time back they too were small and only gradually became big! Their competitor too can become big.

It’s high time for business leaders to shun frog mentality and wake up to the realities of their environment before it is too late.

The Myth of Best Practices

2007-05-06T22:00:00.000+05:30

Adoption of best practices, borrowed from national or international organizations, is a much abused concept in business organizations. There is a widespread feeling that once you have adopted a best practice, things would change for the better. Nothing could be more wrong. Behind every best practice, there are many underlying variables which made the best practice a success in the first place.

The problem with adoption of best practices is that people adopt best practices without giving much thought to the variables that influence the success or failure of a best practice in context to a particular organization. Best practices don’t work on their own. They have to be driven through multiple other initiatives all going on simultaneously. This is one area where organizational mandarins err. They focus on the best practice but forget or don’t give much thought to the drivers of best practice.

Take technology for instance. Yes, it’s true that technology works wonders and it has almost become a necessity for every business. But very often, companies make a mess of adopting technological best practices and end up with confusion all around, not because of technology but because of variables that drive effectiveness of technology. Say, a company decides to become information driven throughout its hierarchy. It gets some good technological platforms installed in its quest to become information driven. It gets centrally connected as far as various information regarding operations is concerned. Next, it decides to automate various operational and non-operational activities, say, online approval of various exceptions related to sales, meetings and minutes management, tasks and actions, online secondary sales tracking, online competition tracking, online scheme management and gift disbursal system, online sales portal, online claim settlement, and the list goes on. It sounds very impressive, isn’t it? Well, the reality generally is quite different. Let me elaborate why it is so –

In this particular example, what are the drivers of this proposed transformation of the company into information driven organization. Following are some of the drivers that come to my mind;

- Software vendors who develop the technology
- People who run the technology
- People who champion the adoption of technology
- People who ultimately use the technology

Now assuming that the technology best practice you are going to adopt is very relevant and appears great for your company, how will the actual implementation turn up if you hire software vendors who lack experience and expertise but come cheap; or the people who will run that technology are not competent enough to handle it; or the champions of technology fail to drive down the objectives and benefits of the technology to the people across organization; or the people who are supposed to use it are not capable of using it. It results into a concoction that tastes bitter and is also bad for organization’s health! So you end up with too many initiatives; none of them works as desired, and they consume enormous amount of managerial time without any productivity enhancement. Definitely all the drivers of best practice must be aligned properly to reap benefits. If they are not, disasters are bound to happen.

This was an example of technology. Other best practices work similarly. To make a best practice work, the drivers need to be identified, bolstered, and aligned properly with one another. Why a best practice worked in some organization is not always obvious from surface unless you scratch and look deeper.

It all boils down to the fact that best practices are not like panacea. Blindly following best practices is a recipe for disaster. To make a best practice work, you have to understand how it is going to fit into your organization. What worked somewhere will most likely not work somewhere else unless it is adapted to align it with realities of the organizations as well as with the drivers that are going to make a success out of it. Any best practice is as good as the people and processes that are going to adopt and implement it.

What's Your Bench Strength?

2007-05-05T15:38:00.000+05:30

Bench-strength is the availability of people in your organization who can easily move to fill the shoes of people who decide to part ways with the organization. Strong bench-strength is a sign of healthy organization as well as effective people management practices. Low bench-strength on the other hand is a clear sign of troubles ahead. Yet a large number of companies fail to address the issue of bench-strength. Often, these companies rely on outside consultants to hire for a position that fell vacant. Frequently, this takes months to complete. I know of a company which remained without a category manager for almost a year before the replacement came. And the category was worth in excess of Rs 300 crores at that time! I also know of a company which remained without a brand manager of a Rs 250 crore brand for more than 6 months! This is not fictional; this is real.

Not only a poor bench-strength indicative of future trouble, it also gives an impression to the mind of star performers that they are irreplaceable. And this is nothing less than onset of cancerous lump in the organization. Once the star performers get a feeling that they are irreplaceable, they start throwing their tantrums that not only demotivates scores of people but also dents the values of the organization in long run. Hence, it’s in the interest of everyone if organization, as a strategy, decides to develop a strong bench-strength in its rank and file.

Following are some of the factors that can adversely affect the bench-strength of any organization –

Management’s obsession with short term – Managers and leaders who are able to balance the long-term as well as short-term generally do very well. Problem starts when they become too obsessed with quarterly numbers to the extent that every other important thing they are supposed to do, including development of people, is relegated down the priority list. Once the organization’s mandarins get myopic vision of their roles and responsibilities, they start focusing on what someone can do at present rather than what the potential of a person is. They start living too much in ‘present’ without an iota of thought about future. This hampers the allocation of time and effort to develop people for future roles. It’s like driving a car and looking at hood rather than the long road in front! No surprises that they often meet with accidents unaware of what hit them so hard.

Insecurity among leaders and managers – Most effective leaders and managers are people who love to surround themselves with people who are smarter than they are. Yet, they are a scarce commodity in the corporate ecosystem. Very often a sense of insecurity feeling is there among managers and leaders that alienates them with people who they think can outsmart them. Due to this, they tend to gravitate towards mediocre people who they think are their alter ego but at the same time who can’t outsmart them. In the process, people with potential get lost in the organizational jungle or move on to other company.

Hero worship – When you have too few heroes in your organization and they are worshipped like God, they get an ego bigger than the organization. Once heroes develop a big ego, they start feeling that they are the start and end of everything while others only an army of clerks to support them. This is when development of people takes a back seat.

Poor performance appraisal processes and systems – When you have vague and hazy appraisals, true potential and developmental areas of people never emerge. Well, talking of appraisals, I have seen a few appraisal forms that have the total score pre-filled by the boss while the details remained to be filled! And these were for people who were given promotion. So if you have an appraisal system that is a perfunctory exercise to display subjective judgment of the boss, your bench-strength would always be poor.

An administrative HR rather than a strategic HR – HR has a habit of getting stuck in the administration rather than development of people. They get so preoccupied with administrative aspects of people management that they forget that their primary job is to help people reach their true potential. So instead of spending time with people, they end up spending time amid excel sheet analyzing weekly attrition rate! Due to this they are unable to drive the importance of having a strong bench-strength to the people throughout the organization. Instead of exhorting people to be ready with their successors and discussing training and developmental needs of people, they end up interacting with outside consultants in their search for replacements.

Centralized organization structure – More control means less trust in people. More control also means less authority for people. In a highly centralized organizations majority of people start feeling like pawns that are expected to follow orders from top rather than think on their feet to decide the best course of action. In such scenarios, who does what is also dictated by the people who control most of the things in an organization. As such, hardly any development of people takes place in a centralized environment where everything is dependent on the whims and fancies of people who control things.

Low priority issue on top leadership’s agenda list – Ensuring a strong bench-strength is a major initiative that needs to be driven down the organization from the top till it gets into the head and heart of people throughout the organization. Sadly, many CEOs don’t even think about it, let alone drive it!

It is important to build a people centric organization which is bigger than any individual and is independent of the coming and going of any individual. You can do this only if you have enough arms and ammunition in form of competent people, ever ready to don new responsibilities. So, perk up your bench-strength.

If I Were The CEO...

2007-05-01T14:31:00.000+05:30

CEOs are considered powerful people in any organization. They are the head honchos whom everyone fears. The general perception among people is that whatever the CEOs says is the final word on wisdom and it must not be questioned, not atleast in CEO's presence! They are considered the Godfather!

But I have a contrary view. I believe that a CEO must be a follower first if he wants to truely lead his organization and people. He must be a follower of his people, who is always on the look out for what his people are thinking and feeling. He must be a follower of the pulse of his organization and his people. I am not yet a CEO but someday soon I will become a CEO. Following are a few things I would love to do as a CEO;

Eat lunch in the common cafeteria. For me a common lunch with common people is more fruitful and satisfying than a power lunch.

Spend at least 2 hours every week meeting my people from every level - from vice president to the sweeper.

Keep an open door policy with a big board engraved with “You are welcome, always!”

Weekly tea meeting in an informal setup with a group of 10 people randomly picked to discuss anything they wish to discuss.

Everyday give bear-hug to at least five of my people randomly intercepted.

Send a small 'good morning email' with a 'thought of the day' to all employees.

Go around the cubicles saying ‘hi’ to some of the people everyday when in office.

Paint the office with “If you are working late in evening, you are definitely not working hard enough during day.”

Tea bonding – everyday have one cup of tea with an employee at his/her desk.

Personally drive communication of major initiative or strategy though the rank and file of the organization.

Write a lot of small hand written notes to people appreciating their work and how that is helping the organization evolve and grow.

Spend a lot of time talking to young people in the organization and begging for ideas and suggestions from them.

Explain organizational goals and objective through stories.

Appreciate publicly, reprimand privately.

Put suggestion box all around the place and reward the employee with the highest number of suggestions every month.

Celebrate small victories of people.

Throw surprise office parties.

Spend 30% of my time meeting customers and trade partners.

Talk more about the picture rather than the road map.

Keep the performance metrics to a maximum of 5 across all levels because I believe that the more clutter you have, the less focused your people are, and more is the scope for fudging performance.

Practice “leadership by walking around.”

How Do You Treat Your Average And Low-skilled Personnel?

2007-04-23T00:23:00.000+05:30

In a typical business organization, there are few star players and many average and low-skilled players, mostly in support functions. While star players are celebrated; the average and low-skilled ones seldom get noticed or appreciated. But the fact is that organizations don’t run because of their star players. Behind the success and charisma of star players, there lies an unending stream of efforts by the average and low-skilled ones. A collective effort of average and low-skilled personnel helps stars succeed.

The point is not that star players should not be celebrated. The point I am trying to make is that average players should not be ignored. From my experience in dealing with average and low skilled personnel, I have come to understand that what they crave most is appreciation, and acknowledgement that their efforts count in organization’s growth. They don’t expect celebrations in their name. They are aware of their limitations. What they want is a little bit of appreciation of their work from time to time.

But unfortunately, managers and leaders often overlook them thinking that they don’t matter much. They have a feeling that these employees are easily replaceable so there is no need to give extra attention to them. It is true that they are easily replaceable because of their low level of skills; but at the same time the organization doesn’t do itself a favour by keeping majority of its employees demoralized. It definitely affects overall productivity of the organization.

It has been my experience that if you treat these average and low-skilled personnel with love, respect, and appreciative words, they are willing to go extra miles when you ask them to. Whether it is staying at office till late to complete an urgent assignment or to take work home so that you don’t lose your face next day, they can make your life easy if you care for them. The rule is simple: you get what you give.

All you need to keep them happy and enthusiastic is to talk to them with smile, show them that their work counts, publicly appreciate their efforts when they do some task well, give small treat (chocolate, pizza, etc.) when they have really slogged hard for you. These small gestures don’t cost a fortune, but they go a long way in keeping your work environment in a vibrant mood that churns out the highest quality of productivity from all personnel.

Character of a man is judged by how he treats people who are below him in social, economic, or professional order. It is high time for leaders and managers to take some serious initiatives to bring character in their organizations!

Mad and Maverick

2007-04-22T22:10:00.000+05:30

I am reading "It Happened In India" by Kishore Biyani. Just read something interesting in the book that I must post on this blog. It's simply amazing and I relate well to it. It's about the difference between 'Mad' and 'Maverick'.

Kishore Biyani writes,

When one is young and tries to rewrite rules, he is called 'mad'. But when he is finally successful, because he dared to risk it, he is called a 'maverick'.

Being a confirmed mad myself, who is in the process of turning into a maverick, I can't agree more.

Nuggets of Management Wisdom #14

2007-04-15T22:50:00.000+05:30

It is important to start walking; refinement can happen during the walk.

People often get into a state of inertia trying to plan every little detail of their journey, be it the journey of life, journey of career, or journey of a business initiative, before they make a start. This delays the very start of the journey in the name of perfecting the plan of journey. But perfect plans have an uncanny tendency to go wrong. It is because there are no perfect plans. Plans are about future and future is unpredictable. Future is all about surprises on the way. Success or failure of a plan depends more on how these surprises are tackled on the way rather than how perfect and strong the initial plan was.

Nothing is perfect in this world. Perfection is chimera and an excuse for delaying things. It is more important to start the journey with a reasonable degree of planning rather than perfect planning. Improvements, refinement, and adjustments can happen on the way depending on what surprises are encountered and what kind of learning happens. Every success story is a process of incremental improvements based on continuous learning. It is important to be flexible rather than rigid. It is more important to have a willingness to learn and adapt.

It pays to keep the plans in a liquid state rather than a solid state. Liquid plans are capable of moving smoothly through any path or obstructions in the path by adapting their flow and merging with the path. On the other hand, solid plans have a tough time if the path visualized during their conception changes or throws up some nasty surprises!

Indian Retail: A Nation of Shopkeepers By Design

2007-04-09T23:32:00.000+05:30

We have the highest number of shops in world – 11 shops for every 1000 persons. I am slowly coming to a realization that this phenomenon is not by chance but has a well defined logic. This logic can also be responsible for the strong wicket on which kirana stores are playing. Indian kirana may not be the same as the mom-n-pop stores of the west and it may not meet the fate of its counterparts in other countries where organized retail flourished. The key lies in understanding the role of population density! A cursory look at countries (with significant population as well as area) where organized retail has garnered significant market share of total retail market will show that in a country with considerable area (say more than 500,000 Sq KM) organized retail flourishes when population density is low. USA has a population density of 31 person per Sq KM. Brazil has a density of 21 person per Sq KM. European Union has a population density of 112 people per Sq Km. Even China with a population much more than India has a density of 135 people per Sq Km. In India it is 332 persons per Sq KM!

What does low population density signify? It means three things:

People are scattered.

Mom-n-pop stores may not have enough business in the nearby areas to sustain resulting in low shop density.

All needs of customers may not get fulfilled by the small base of mom-n-pop stores thereby creating a need to buy all items of need under one roof.

How is India different? The population density is very high. That means that people are concentrated almost everywhere thereby creating huge opportunities for goods and services of various kinds. This led to mushrooming of kirana and other small stores focused on local tastes and preferences. Since concentration of population meant more consumption opportunities, a cluster of small general stores developed to cater to the entire basket of consumer needs. The end result is – within an area of one square kilometer, there are approximately 40 small shops collectively capable of catering to 90% of consumer needs. This means another thing also. In a low income country like India, unlike countries with low population density, the concentration of population means enough business for these small shops to earn their livelihood. The omnipresence of small shops in the neighbourhood catering to virtually all needs makes the concept of buying everything under one roof redundant, unless there is an extraordinary cost benefit along with hassle free shopping as per the whims and fancies of the consumer.

This spread of kirana stores and other small shops and their stranglehold on the Indian retail market is like big banyan tree; it has entrenched its roots deep down the psyche of Indian consumer and it would be extremely difficult if not impossible to uproot this century old tree with thick trunk and deep roots.

Poverty Alleviation: The Starfish Way

2007-04-06T22:38:00.000+05:30

Over 300 million Indians live in acute poverty. Can’t there be a way out of this circle of poverty? I just finished reading a remarkable book, “The Starfish and The Spider”, and a brain wave has hit me. Perhaps, the problem of poverty in India can be solved by initiating a social movement, having DNA of a starfish, that is based on principles of decentralization, community, collaboration, networks, a shared ideology, and the innate human desire to contribute and make a difference. This movement would be like Alcoholic Anonymous, Animal Liberation Front, and the likes. The ideology would be “NO POVERTY, SPREAD PROSPERITY”.

The problem of poverty doesn’t get solved in India because of three reasons:

All poverty alleviation programs are highly centralized with inherent inefficiencies and inflexibilities of the system.

All these programs focus on “giving a fish rather than teaching how to fish”. Hence, they are resource dependent rather than enterprise dependent. They create a mentality of dependence rather than a mentality of empowerment. They fail to create a virtuous cycle of enterprise, production, consumption, and wealth creation.

The delivery system designed to implement poverty alleviation programs consumes 80-85% of allocated resources thereby leaving just 15-20% for actual utilization for poverty alleviation. If we factor in rampant corruption, the actual amount left for fighting poverty would be less than 10% of allocated fund.

People living in acute poverty don’t need huge resources to take control of their life. This has been proved by magnificent success of micro-finance in some pockets of the country. What is basically needed is a little monetary input (sometimes as low as Rs 100) to start a micro enterprise, a little guidance, and lots of love and understanding. These 300 million people have huge potential to consume but are unable to because of lack of money. Once a little money starts circulating in this system, it can create a self sustaining economy of production and consumption.

But considering the size of our country and the complexities involved due to multiple languages and culture, centralized and top-down approaches are bound to meet disaster. In India, localization is the key to effectively solving social problems. That calls for a starfish-like approach with a networked and distributed nervous system having an inbuilt ability to rapidly multiply and proliferate with little or no external support.

We need a community of passionate individuals who share the ideology of “NO POVERTY, ONLY PROSPERITY”. We need thousands of self-managed, hierarchy-free, and independent chapters, each with a few people who spread the ideology and participate in the movement at ground zero in whatever way they can.

The key features of this movement would be:

Self-managed, hierarchy-less, and independent chapters.

No central leadership team, control, resource support, or guidance. Each individual chapter would be independent and free to manage itself as per the wishes of its members. The only thing common among various chapters would be the ideology.

No defined process, rules, and structure. Each chapter would be free to do whatever it may deem fit to spread the ideology and help in reduction of poverty.

Members become a part of the movement to contribute to the cause without any desire to derive personal gain.

Time has come for a social equivalent of Web 2.0 to tackle the menace of poverty!

Nuggets of Management Wisdom #13

2007-03-25T16:10:00.000+05:30

Satisfaction is the end of growth

Feeling satisfied is like moving into a secured comfort zone. I believe growth is the antithesis of satisfaction. Growth comes from stretching oneself and pushing beyond the imagined limits. Satisfaction has the habit of telling the mind that one is doing well enough and there is no need to push the limits. And this aspect of satisfaction builds an inertia that curbs the very basis of any growth i.e. pushing the known limits.

Growth cannot come without the presence of constructive dissatisfaction. By constructive dissatisfaction, I mean certain degree of restlessness that spurs one for continuous improvement. Unless there is an inner feeling to keep on improving in life, one cannot venture towards the realms of possibilities, higher growth, and extraordinary achievements.

It is said that success is a journey not a destination. One has to always keep walking to set one milestone after another. The moment one stops, it would mean reaching one’s destination and feeling satisfied. And that would be the end of the growth process. But if one keeps walking and strives for continuous exploration, the journey would open up new avenues of growth. For someone who views success as a journey, a little constructive dissatisfaction is a continuous part of life. This constructive dissatisfaction always acts as a torchbearer and gives rays of hope for continuously improving oneself to find new opportunities for growth.

Constructive dissatisfaction is like salt. In right amount it spices up the life and makes it more interesting and rewarding. Lack of it or excess of it ruins the quality of life.

Nuggets of Management Wisdom #12

2007-03-14T22:48:00.000+05:30

If you empower dummies you get bad decisions faster!
– Rich Teerlink, former CEO of Harley-Davidson

Having been a witness to some havoc created by empowerment of dummies, I hit an instant emotional chord when I read these truly remarkable words of wisdom. You just can’t ignore the people aspect of your organization. How your organization or company fares depends on what kind of people you have. If you have monkeys you will get only peanuts. And if you have empowered monkeys, you will not even get your peanuts as they will devour it too!

So simple a fact it is, yet it eludes the thinking horizons of our leaders. And till the time this is the case, people would continue to be promoted to their level of incompetence.

People and Process: 2Ps That Matter The Most

2007-03-13T23:14:00.000+05:30

I have often reiterated that two things – People and Process – matter the most in any company or organization. Everything else comes to a naught if these 2Ps have severe defects. Some incidents over the last few days have further reinforced my belief in the importance of these 2Ps. I have come to a conclusion that organizations can never ever grow up if they don’t first fix their 2Ps right.

Here are two incidents worth mentioning. An official circular floats in an organization whereby it is notified that with immediate effect a very routine work done at the bottom of organizational hierarchy will have to be approved by the divisional head, who is someone just one rug below the CEO! I tried hard but could not find a single reason to justify this decision, which, I must dare say, is nothing less that moronic. It is centralization at its zenith. Finding it hard to justify this decision, I, instead, tried to find out what prompted such an unwise decision. The answer was not hard to find – both critical Ps had defects. People who were supposed to be doing this routine work were not good enough to be trusted for this work even by the person who appointed them! Process of doing this routine work had many bottle-necks which not only unnecessarily delayed the work but also created hurdles in the path of finishing that work in the most optimal way.

Instead of trying to find the root cause of the problem and streamline the people and the process issues once and for all, the wise men treated themselves with a short-sighted solution. Will this solve the problem? I can bet it will not. It will make it worse. Because even the divisional head will have to rely on the judgment and opinion of the same people who were doing this work before. You can’t expect a divisional head to go to 30 places all over India every month and see with his own eyes before approving something. So, same thing would be done, but in more time due to unnecessary extension of the loop. Don’t you think it would have been better to put a competent person at the level where this work is done, give him proper authority to take decisions, make him accountable for his decisions, and do away with multiple approval channels? Why the hell something as simple as classifying stock as saleable and non-saleable has to go all the way up to the divisional head’s desk? It tells a lot about your people, processes, and the level of inefficiency at which you operate!

Second incident is equally bizarre. A company spends a lot of money on making promotional and POP display kind of stuff. A good part of it gathers dust in the warehouse without seeing sunshine for months, even years! Even the event for which something was specially made passes, but the packets remain unopened! You must be scratching your head in disbelief. Even I was until I saw it all with my very own eyes! With a little probing, this esoteric phenomenon unfolded itself to reveal that again one of the 2Ps needed serious overhauling. This time it was process. The entire process of giving orders to suppliers, receiving ordered goods at central warehouse, entering dispatch orders for dispatch of goods from central warehouse to various locations across India, and intimation of the arrival of goods to the concerned official at various locations was designed to create serious bottle-necks resulting in process inefficiencies, at times even complete break down, at various stages resulting in utter chaos, confusion, and wastage of resources.

As a result of serendipitous exposures to such incidents, I am slowly acquiring the habit of making these 2Ps – People and Processes – the starting point of analysis for most of the organizational and business problems. And trust me, 90% of the times, the root of the problem lies in fault-lines present in these 2Ps, and the solution lies in making these 2Ps defect-free.

Gandhigiri Meets Pester Power

2007-03-07T21:52:00.000+05:30

Kid: Mom, I want that toy air-plane
Mom: No, you have so many toys. No more.
Kid: (Plants a kiss on her mom’s cheek and smiles) Mom, just one more please.
Mom: (Frowns) No, my dear son. Let’s go.
Kid: (Plants one more kiss on her other cheek and smiles) My sweet mom, please get me this one. I will grow up to be an ace pilot.
Mom: (Some sense of pride on face) But you have so many toys
Kid: (Plants a kiss on her forehead and smiles) But to become a pilot I need an air-plane, mom. Of course, I will also need to study hard. (Smiles again and hugs his mom)
Mom: (Sparkle and emotion on her face) You, my naughty son (plants a kiss on his cheek and hugs him) so my little boy is going to be a pilot. So sweet. I will buy you this air-plane but you will have to promise me that you would study well.
Kid: (Plants a kiss on cheek and smiles) Of course mom.

Moral of the story: If you want your mom to buy you something, smile kar ke binamrata se bahut saare kisses dene ka hai, bahut saare hugs dene ka hai, aur tab tak dete rahne ka hai jab tak mom maan na jaye...lage raho baba log!

Creative sparks come at the most unexpected of times. Today, while coming back from work, I suddenly started wondering about what would happen if Gandhigiri met pester power of kids. Kids are an important as well as lucrative market for marketers. But as with any other consumer market, kids market has also become cluttered. To rise above this clutter, something very innovative is required. Considering the attention span of an average kid and her instantaneous judgment about what she likes or dislikes, the task of a marketer becomes tougher. And here, I have a gut feeling that if marketers incorporate Gandhigiri based pester power in their brand communication, something miraculous could happen – something where the kid gets what she wants, the parent is happy with her Gandhian well-behaved kid, and the marketer is happy with a fat bank balance!

Pester power is often based on the brashness of kids, their persistent and public display of unruly behaviour, often to the embarrassment of parents, to get what they want. This is irritating for parents most of the times. What marketers could aim for is to transform pester power from something unruly to something polite yet influential, with lots of fun moments, both for kids and the parents. Brand communication could aim at transformation of kids’ behaviour from undisciplined pester power to a seemingly responsible pester power. And this could be done with a dash of Gandhigiri elements- politeness, love, persistence.

In this strategy of “Gandhigiri meets pester power”, marketers need to focus on following aspects to influence the behaviour of kids towards polite pestering, which is more influencing and less offending to parents.

Show the kid as a polite stubborn and not as a brat
Focus on the innocence of politeness of the kids
Show how the polite persistence ultimately melts the parent’s heart.
Show the kid as a responsible and knowledgeable kid.
Bring in the fun element.
Show how Gandhian pestering brings about a happy ending with a smile of the face of both the kid and the parent.
Give the message to kids that Gandhian pestering is much more influential and effective than rona-dhona (whining) kind of pestering.

In the process, apart from boosting sales, the marketers may end up doing some social good as well in the form of teaching politeness and Gandhigiri to an entire generation. No one knows when and how something reaches tipping point and gains entry into mass consciousness. Revival of Gandhigiri through kids, thanks to the shrewd marketers, may become the next big revolution!!

Nuggets of Management Wisdom #11

2007-02-27T23:14:00.000+05:30

Avoid being a perfectionist; it is the biggest hurdle to growth and success.

I have started getting a feeling that being a perfectionist is like having a serious illness. Having observed some successful as well as not so successful people in my immediate environment – work place, family, friends – I have come to a conclusion that an obsessive tendency towards perfection never allows you to reach the heights of success and greatness. The reason is simple – a perfectionist hates making mistakes, and without mistakes you cannot taste greatness or extraordinary success. Success always comes from experimentation, mistakes, and learning acquired in this process. As Dr. David M. Burns said –

Aim for success, not perfection. Never give up your right to be wrong, because then you will lose the ability to learn new things and move forward with your life. Remember that fear always lurks behind perfectionism. Confronting your fears and allowing yourself the right to be human can, paradoxically, make yourself a happier and more productive person.
Another problem with being a perfectionist is the tendency to hang on things till they meet the perfection benchmarks. This often results in unnecessary delay in making decisions and executing something. A perfectionist frequently forgets about timing and relevance of an issue to the solution he is providing. Instead of balancing multiple dimensions of an issue to come up with a balanced and relevant solution, the perfectionist loses focus and gets hung up on one dimension that may not be a significant dimension. When the enemy is in front ready to assault, prudence lies in firing at him with reasonable accuracy rather than set up the gun and the angle for a perfect shot at the heart! It is important to understand when something is good enough and any additional effort would only result in diminishing marginal utility.

It is important to understand that life is not meant to be perfect lest the entire fun element would be gone. Life is a challenge meant to be undertaken with some element of uncertainty and surprise. A perfectionist tries to make life linear and predictable, which is against the laws of Nature. It is important not to be afraid of experimenting and committing mistakes. Experimentation is accompanied by mistakes but history is a witness that nothing great on this earth has ever been achieved without the miraculous powers of experimentation and risk taking. Experimentation and resulting mistakes often open up vistas of opportunities that perfection can never dream of!

As a parting shot, it would be worthwhile to ponder on the words of Anne Lamott in “Bird by Bird” –

I think perfectionism is based on the obsessive belief that if you run carefully enough, hitting each stepping-stone just right, you won't have to die. The truth is that you will die anyway and that a lot of people who aren't even looking at their feet are going to do a whole lot better than you, and have a lot more fun while they're doing it.
Ladies and gentlemen, stop being perfectionists and get a real life full of happiness and achievement.

Corporate Tax: How Little Our Companies Pay?

2007-02-19T17:31:00.000+05:30

A few days back, I read a report in Business World about how little tax some companies in India pay, thanks to myriad exemptions and loopholes in the system to manipulate tax outgo.

I really fell from my chair on knowing that Reliance Industries pays much less tax (as a percentage of income) than what I pay. Yes, Reliance Industries paid just 8.41% of PBT as tax in 2005-06. To know how much tax some of the well known companies in India pay, see the graphics below (click and open in a new window for enlarged image).

Isn’t this shortchanging the Indian government? Not only is this resulting in a significant loss of revenues for the Indian exchequer but it is also giving unfair advantage to some companies who can manipulate the laws. But who is to blame? No doubt the culprit is the Indian government.

We Indians have a habit of holding on to things even after they have outlived their utility. Same is the case with tax exemptions in India, particularly in corporate tax segment. We introduce exemptions to encourage and develop a particular industry. When the objective has been met, we must remove the exemptions. But in our case we continue with the exemptions even when the objectives have been met and the particular industry has transformed itself into a behemoth. A case in point is IT industry which has outlived the utility of the exemptions provided to it. This is a fact that even Mr. Narayana Murthy of Infosys, the face of IT industry in India, admits to.

Another area of concern is the loopholes in tax laws and tax administration that can be manipulated with some creative structuring of the business and its investment. A complete set of finance professionals are out there with their services to ensure that all loopholes of the Indian tax system are fully milked to reduce the tax burden.

The problem is the complexity of law and administration. Complexity breeds inefficiency. The need of the hour is to simplify the tax laws and procedures in such a way that a common man can understand them. At the same time, transparency must be there. One way to start the simplification process is the do away with various exemptions. Exemptions are like plague.

Hope this issue is on the radar of our Finance Minister while preparing budget for 2007-08.

Nuggets of Management Wisdom #10

2007-02-18T22:46:00.000+05:30

Never manage through reports; instead manage through your people.

It may sound moronic to even think that someone can try to manage through reports. But in a flash of corporate eureka moment, I realized that this is what many managers in many organizations do. They try to manage through reports instead of trusting the abilities of the people they manage. As a result, utter chaos prevails and things never get done. And to top up all these, everyone in the company transforms into a report jock churning out reports 80% of one’s time. Discussion and reports take center-stage while action and execution take a backseat.

Reports have a simple purpose – to give you a good enough view of the situation with reasonable accuracy so that you can plan and execute your actions wisely. Expecting anything more than this from reports is a sure shot way to bring gigantic inefficiencies in the system. Once the report has done its primary duty of giving a view, the ball should move to people’s court for action.

Why some managers manage through reports?
First, they are control freaks who want to control everything from top to bottom irrespective of whether it is worth their attention or not.

Second, they don’t hire right. Hiring becomes a playground for favouritism, promoting people to their level of incompetence, and wrong assessment of competencies. You can manage through people only if you have right people at right place. They just try to hire people who are their alter ego, and definitely not smarter than they are.

Third, they don’t trust the people they hire and are basically a great fan of command and control philosophy of management.

Fourth, they have poor delegation skills.

Fifth, they lack basic leadership skills like inspiring and motivating people to action. They just don’t know how to put the fire in their people’s belly so that people embrace their leader’s dreams as their own.

Sixth, reports are the ideal place to hide a manager’s own shortcomings under a pile of carefully designed sentences and tables of data that are creatively interpreted.

So what to do…
First, throw away all unnecessary reports from your system. Simplify the rest. If your people are spending more than 10% of their working time on making reports and MIS, then something is wrong with the system (at least in sales & marketing domain of consumer goods companies).

Second, hire bright people whom you can trust. Don’t shy away from hiring people who are smarter than you. People aspect is the most important aspect of effective management. Next on importance ladder is process.

Third, delegate effectively. Neither everything is worth your attention, nor are you competent enough to tackle everything.

Fourth, talk in numbers as they don’t lie. In my experience, reports are the most effective tool for rationalization with all those creative structuring of sentences and interpretation of data. Don’t fall into that trap as it is a vicious cycle with the potential to choke the system. Also, talk about solutions not problems. Reports have a tendency to focus too much on problem and too little on solution. Problems have no end, so better talk about solutions, one at a time. And to become solution oriented you need to become action oriented rather than reports oriented or discussion oriented.

Taming The Future: 7 Essential Traits For Companies

2007-02-16T23:24:00.000+05:30

The rapidity of change today is mind boggling. This is also significantly affecting the rules of the business. While technology is becoming obsolete faster than ever, the new technologies are also opening vistas of new social and business opportunities and trends. The entire system is going through an evolution process that is increasingly being governed by the laws of evolution rather than the laws of management. And in this new ecosystem, who will survive and who will die in coming years? Well, it is difficult to predict. But here are seven traits that, I feel, may dictate the longevity of companies in coming years.

Socially Oriented Capitalism
Businesses will increasingly get entwined with society in coming years if they have to survive the next 25 years. With globalization in its adolescence, the world is witnessing an increasing divide between haves and have-nots. Unless businesses come forward to understand the societal implications of their operations, and make appropriate strategy for constructive collaboration with society at large, things may become ugly in future to the extent that social unrest becomes hazardous for businesses.

The one and only solution for businesses to survive in the long run would be to enter into a partnership of progress with the society at large. It is only through ‘socially oriented capitalism’ that companies would be able to create a bond of trust and bonhomie with the masses that not only results in a symbiotic relationship but also results in the overall progress of mankind and a more equitable distribution of natural as well as economic resources and rewards. The concept of exploitation has to give way to the concept of co-creation.

Environmental Integration
How companies take a stand on environment is going to be a critical factor that will decide longevity of organizations in coming years. Days are not far away when companies who practice triple bottom-line accountability – profit, society, environment – would be toasted the world over. With the pace of development and the constraint of natural resources, time has come for companies to show concern and respect for natural resources. Very soon companies will realize that if they ignored environment, their very survival would be in doubt.

Managing Fluid Dynamics
If anything can be certainly said about business and technology, it is the fact that everything is in constant flux. Not only things are in flux, but the magnitude of change is unpredictable. So tricky the situations are that with one path-breaking innovation, an entire industry can prop up and another can go down instantly. How companies manage this fluid dynamics of the business and technological environment will decide how many of them survive over a considerable period of time. To manage this, great visionaries are needed at the helm. Exceptional leaders, who could see various possibilities, would be required to steer the company in a sea that in all likelihood would turn violent frequently.

Global interdependence
Never had interdependence been as visible as it is today. If Dow Jones sneezes, BSE catches cold. With globalization in full force, no country or individual or institution is self-sufficient. If economy of US slows down, impact is not only felt in US but also in the lives of Chinese workers who are engaged in manufacturing. A thorough understanding of the intricacies of this interdependence and managing them would be a key success factor in coming years. Leaders of tomorrow will have to do a lot of balancing act to ensure that uncertainties due to global interdependence are mitigated to a large extent. Companies that develop such leaders in its rank and file would find it much easier to survive and grow.

Collaboration
The era of individual genius is soon to get over. The era of “collective genius” is going to arrive soon. With each passing day, everything is getting more and more complex. Be it life, or business, or relationships, or communication, the complexity quotient is on the rise. And this phenomenon is being accompanied by the shift of focus from individuals to groups. The world is slowing waking up to the idea of “many minds are always better than one mind”. Moreover, the flattening of the world perpetuated by seamless communication, mobility, and blurring of time-zones is providing an opportunity for the confluence of multiple minds across multiple locations to solve the most complex problems in the most cost-efficient and effective way. The way open source software is bringing about a revolution in the software industry is one small indication of the power of collaboration in coming years. Companies that want to increase their longevity will have to ingrain the power of collaboration in their corporate DNA. And, perhaps, the right time to do this is now so that the foundation for a collaborative organization is in place at the earliest to reap the emerging benefits.

Networks
Just like “individual genius” will give way to “collective genius”, “individual power centers” will give way to “power networks”. The elevated role of networks would essentially be an off-shoot of the emergence of the era of collaboration. In future, the concept of leadership will emerge from the human networks in an organization. Concept of “first among equals” will take precedence over “paternalistic leadership”. In such event, power will neither flow from the barrel of gun nor from the authority of the top gun. Power, at least inside an organization, will flow from the dynamics of human networks.

With the flattening of the world, flattening of the organization would follow. Hierarchy based command and control model may start appearing like something from Stone Age. In a hierarchy-less organization, the way individuals interact and transact may start following the concepts of biology like osmosis, cross-pollination, cell multiplication, grafting, eco-system, evolution, synthesis, nutrient management, etc. All these will ultimately result in shift of power base from individuals within an organization to networks of individuals within an organization.

Entrepreneurial Culture
The future is going to be tough and unpredictable, yet it is bound to be promising with emergence of new ideas to make life better. In future, everyday will see the birth of new ideas and new opportunities. At the same time, rapid churn in technology will result in death of many an idea. Managing this cycle of opportunity and obsolescence will require the best of entrepreneurial spirits within an organization. An organization that develops the culture of entrepreneurship and promotes the entrepreneurial traits of identifying opportunities, risk taking, adaptability, and flexibility would find it much easier to survive and flourish in future. In coming years, the product life cycle will get extremely shortened due to rapid technological developments as well as equally rapid technological obsolescence. One of the keys to growth in such circumstances would be the ability of an organization to come up with new products and services at regular intervals that meet customer’s needs in better ways. This will entail managing current and future technologies, ever changing business environment, and increasingly demanding expectations of stakeholders – shareholders, customers, society. And there is absolutely no better way to do this than to create a battery of entrepreneurs within an organization to imagine, plan, direct, and lead change to create a virtuous cycle of sustainable growth in an era of continuous flux.

N R Narayana Murthy: The Conscience Keeper of Business

2007-02-15T22:22:00.000+05:30

Very few business leaders are brutally honest and candid about issues that directly affect their own companies. Mr. N R Narayana Murthy of Infosys is one such leader. In a breakfast encounter organized by Economic Times between Mr. Murthy and Mr. Azim Premji of Wipro, he virtually dropped a bomb when he said, "I find it funny that companies like Infosys, with profits exceeding Rs 3500 crores, do not pay tax in India." Assertions like this put him on a higher pedestal, way ahead of the current breed of business leaders. He further said, "We use government infastructure in terms of education, roads, housing, and all that. I don't think Infosys is paying taxes commensurate with the benefits we derive from the local environment." So candid! Hats off to this man.

Leaders like Murthy have a special role to play in the present and the future. There is a myth surrounding business, though not fully unjustified, that business exploits society and environment and doesn't give back what it takes from its surroundings. There is a palpable growing divide between business and society and the buzz about corporate social responsibility and such stuff sounds hollow to the common man. It is in these times that people like Narayana Murthy have to play a constructive role to bridge the divide and mistrust between business and society for a healthy cohabitation.

This would be particularly significant in coming years when, due to acute pressure on available natural resources, the growth of companies would get depended on how well they engage society and the environment in a win-win relationship. Global business environment is, perhaps, entering a new phase where business leaders will not only have to create a symbiotic relationship with society and environment but will also have to work on marketing the concept of ‘socially oriented capitalism’ to the masses to make sure that it gets ingrained in the mass consciousness that welfare of business, society, and environment is mutually interdependent.

We need thousands of Narayana Murthy to lead this imminent paradigm shift.

FDI in Retail in India: What's The Problem?

2007-02-10T23:43:00.000+05:30

These days the hot news from retail in India is the alleged letter written by the President of the Congress Party, Ms. Sonia Gandhi, to the Indian Prime Minister asking him to go slow on FDI in retail on the grounds of protecting the interests of mom-and-pop retailers. And all the media bytes going into analysis of this news is amusing me.

First of all, I don't believe that mom-and-pop stores would be adversely affected by the organized retail onslaught. Considering that 95% of roughly 12 million unorganized retailers have a shop area of less than 500 Sq Feet, having a unique set of niche customers, taking their slice of pie would be an uphill task. Impact would be the most on the 5% of unorganized retailers who have bigger shop area. But for the sake of argument on FDI in retail, let me assume that smaller retailers would get affected by organized retail in a big way. And in such an event, how would delay in allowing FDI in retail help protect smaller retailers in unorganized retail sector?

The argument that delaying FDI in retail would help the interests of smaller Indian retailers is nothing less that utterly-butterly hilarious proposition. Today, India boosts of companies like Reliance, Bharti, Aditya Birla Group, and Tatas who have immense financial muscle, global reach, and scale, and who are aspiring to be big players in Indian retail sector. They have even openly declared their war chest that runs into billions of dollars. These domestic biggies are out there to thrash the mom-and-pop stores. In such a scenario, how come delaying FDI in retail would protect smaller stores. The reasoning is sans logic. FDI or no FDI, the retail landscape is not going to change much for mom-and-pop stores, but for big domestic players a delayed FDI would seem like a boon straight from the Heaven (or 10 Janpath!). Now, this is something that is more than what meets the eyes. Was there serious lobbying taking place to get the FDI in retail delayed?

If the government really thinks about helping mom-and-pop stores, it should expedite the FDI in retail. FDI in retail would mean competition to big domestic players from big global players. This would keep the organized retail players, both domestic and global, on their toes and in all likelihood would result in a war of sorts that may ultimately lead to bleeding balance sheets for organized retail. And the customer wins too. In any case, competition is always good for the customer.

Or is it a case of protecting the likes of Reliance and Bharti that the government has been asked to delay FDI in retail? Does a behemoth like Reliance and Bharti need protection? They have financial muscle, global expertise, reach and scale. Then why we need to protect them? If these companies are aspiring for $25 billion revenue from retail, let them slog it out themselves. It's better to throw an equal global lion in the cage to keep these Indian lions on their toes, lest they turn monopolists using their immense power. If a small mom-and-pop store that does a monthly business of Rs.25000 a month can fight it out with biggies like Reliance and Bharti, who are talking about revenues of billions of dollars, then surely Reliance and Bharti can play it out with the likes of Wal-Mart, Carrefour, Tesco and their ilk. The rule should ultimately be same for all.

The Great Indian Retail Dream - Part 2

2007-01-21T23:27:00.000+05:30

My last post on retail – The Great Indian Retail Dream: Euphoria or Reality? – generated some discussions. That led me to drill the retail story a bit deeper and to study evolution of retail in comparable economies like Brazil and China. The more I drilled deeper, the more convinced I became that the great Indian retail party may not happen anytime soon. Organized retail’s grand plans may hit a road block in India due to many economic, social, developmental, infrastructural, and consumption-centric reasons. But one thing that may be the biggest party spoiler is the fact that India is a country with a mind, body, and soul distinctly apart from any of the economies of the world. India’s distinctiveness will ensure that what worked elsewhere may not work here at all. The standard paradigm of organized retail may not fit in India’s case. And that may be the first of the major life threatening jolts for the grand plans of the organized retail in India. Let’s see how some of the typical Indian phenomena can emerge as villains in the great Indian retail opera.

Urbanization
Growth of organized retail is predominantly an urban phenomenon. The prospects of organized retail are determined by the level of urban population. Studies in developing economies have suggested that urban families spend 2.5 times more than rural families. In India, urban population is growing at a CAGR of 2.4% annually and expected to grow with this rate till 2015. Going by the forecast of 2009, India will have an urbanization of 30%. This will increase to 32% by 2015. Compare this with Brazil, one of the BRIC economies, where the urbanization level is 85%. It is not a surprise that in Brazil, the organized retail has a 36% market share of total retail. Even in China, where organized retail has a 20% market share of total retail, the urbanization level is 42%. China saw its urban population rise from 17.9% in 1979 to 41.8% in 2004. During this period the urban population grew from 170 million to 540 million at a CAGR of 4.5% and resulting urbanization grew at CAGR of 3.3%. This growth of urbanization in China is said to be amazingly fast and unprecedented. So can India’s urbanization also move on a fast track? No, it cannot. China had and still has a booming manufacturing sector which helped it in rapid urbanization. Manufacturing sector is better placed than service sector to accelerate the process of urbanization. Manufacturing sector helps in creation of urban centers whereas service sector comes later to service the urban centers. India is too service heavy and manufacturing malnourished to create the phenomenon of fast paced urbanization.

Nations within a nation
India is a peculiar country. It is like having 50 nations within a nation, each having its own tastes and preferences. It’s not about tastes and preferences; it is more about cultural pockets within India that dictate the consumption behaviour of the people. Add to this the sharp regional disparities and you have a nation of contradictions. Across India, what works in Tamil Nadu may not work in Punjab. It is equally likely that within a region, say Maharashtra, what works in Mumbai may not work in Nagpur. And then it is also likely that within Mumbai, what works in Malabar Hills may not work in Borivilli or Dahisar. But that’s the crux of Indian consumer! How is it related to growth of organized retail? Organized retail is a big game of standardization. It is a volume game where you standardize everything, come up with big volume requirement, use the volume factor to squeeze the supplier and get a favourable price. But India is a nation of customization. Here standard things don’t work. Ask a typical housewife in India about customization and she will rattle off the list of customization required in break-fast for every member of her family – the son wants toast, butter, and double-egg omelet; daughter wants corn flakes with honey; hubby wants aalu paratha with decent helpings of butter and dahi, and she herself prefers a glass of juice along with a slice of fresh bread and jam. Whew! Mr. Organized Retailer, Indian consumer is no different. We are a nation of “mera wala pink” type citizens. We want everything our way. How the organized retailers are going to program their retail models to bring this level of customization and without losing the price and other advantages is to be seen. Here, a friendly kirana stores has a clear advantage.

Sachet economy
India is a sachet economy. Until sachet happened, as common a thing as shampoo was considered a luxury by majority of Indians. A typical Indian doesn’t have money to indulge in bulk purchases. India buys little, consumes it, and then again buys a little. We are people who don’t have the luxury of fat working capital and cash flow to run our life. Majority of us can’t keep our precious money blocked in 60 days, or even 30 days of household inventory. Situation in life of majority of Indians is such that they need to turn the inventory of running their life on a weekly or fortnightly basis! Now, all those die-hard fans of Walmart very well know that organized retail often encourages bulk purchases by giving great offers and cajoling consumers to purchase in advance the consumption requirements of the near future. One year back, I met an American and his wife on way to Agra. During random talks, he said that they used to buy 6 months of toilet paper in US whenever Walmart comes up with a great offer and that they had a separate storage room in their house where they kept such discounted and advanced purchases! How many Indians can afford that? Growth of organized retail is dependent on volumes – both from retailer’s side as well as consumer’s side. Organized retail may not fit the bill of sachet economy. Kirana shops are better placed to cater to the demand of a sachet economy. Yet another reason to justify that Kirana stores will rule India for a long time.

Where is the demand?
An analysis by Technopak indicates that out of the $ 300 Billion Indian retail market, around 45% is in urban India and the balance 55% in rural India. Given the fact that India has 720 million people living in over 627000 villages, it’s a tough task for organized retail to tap the rural retail demand. Even the data from NCAER which says that 17% of 627000 villages account for 50% of rural population and 60% of rural wealth doesn’t ease much pain regarding inability to tap rural demand. This will mean reaching out to 100000 villages to tap 50% of rural demand. Given the scattered nature and spread of the villages, it is virtually an impossible task for organized retailers to effectively capture this market.

Coming to the urban retail consumption, an analysis by R K Swamy BBDO points to the fact that top 784 cities/towns in India have 78% of the urban population, having 78% of the urban retail market, which is 35% or $ 104 Billion of the total retail pie. Going by the growth rate of total retail and rate of urbanization, we can assume that this urban market in top 1000 cities/towns will double in size to $200 Billion by 2015.

So, organized retailer will have to capture 32% of this market to meet the projected $64 Billion of organized retail revenue by 2015. A tough task considering the stranglehold of kirana in 95% of these top towns, coupled with poor infrastructure, supply chain, and the present reach of organized retail in just top 10-15 cities. Add to these the sharp decline in income level of masses as you move down the hierarchy of the cities, and it may be almost impossible to scale to the grand level of $64 Billion in just 8 years.

Where is the supplier base?
Success of organized retail is also dependent to a large extent on availability of strong supplier base that has the capacity to meet large volumes at competitive prices and standardized product quality. Success of organized retail in China may be attributed to the strong presence of manufacturing units with scales to supply big volumes at competitive prices. But do we have a strong manufacturing presence? The answer is no. Industry contributes around 27% to India’s GDP. This contribution is same as it was in 1985. Compare this to China where industry contributes more than 46% to GDP thereby providing a strong base of suppliers. Moreover, in India’s case the manufacturing scene is fragmented. There are thousands of small manufacturers for consumer goods but very few with the scale needed to service the requirements of a chain of hypermarts with consistent quality.

Even in agricultural produce, the agricultural land holdings are highly fragmented with average holding size of less than a hectare. Going by the requirements of organized retail, it would take thousands of these fragmented agricultural holdings to service a big retailer. Also, euphoric announcements by a number of players willing to play in the great Indian retail rush is going to lead to a situation of too many retailers chasing a few quality agricultural suppliers resulting in jack up of procurement price and diseconomies of scale in the short run. Apart from these, procurement from fragmented land holdings will in all likelihood result in inconsistency of quality and specifications signaling more trouble. Contract farming may be a solution here but the concept is yet to get inside the heart of Indian agriculture. Moreover, getting involved in contract farming is requires good investments and commitment. Again this is a long term call that is not going to give great return in short run.

Backend operations
Organized retail’s success, to a large extent, is determined by the efficiency of its backend operation and the capacity to squeeze cost out of the system. Unfortunately, till now the focus of the organized retail players has been on front-end like buying real estate at obscene prices, attracting customers to the glitzy malls, and giving them a shopping experience. Only recently, there have been talks about investment in backend operations by a few players. But such backward linking cannot happen overnight with the kind of storage and cold chain facilities, and road and air connectivity we have, particularly in villages and smaller towns. Moreover, to build such massive backend infrastructure we need an investment that is not pocket change. An estimate by FICCI/ YES Bank Knowledge Initiative 2006 puts the investment at $4.1 Billion or Rs 15,700 crores just for providing proper cold chain facilities. A report by Rabo Bank in 2005 on status of food processing industry in India puts the figures of investments at Rs 99,700 crores till 2015 to achieve market potential and capacity creation. There is more to organized retail than floor space! Front-end can be taken care in short term but backward linking is something that will take a lot of time, energy, planning, investment, flawless execution, and effective handling of externalities resulting from social and governmental interventions.

Finally…
We are trying to do in 10 years what took other nations 25-30 years to achieve. There is nothing wrong in being on fast track, but only if the environment is conducive and supporting infrastructure is well developed. Unfortunately, in India’s case it is not conducive yet and it may take 10 years to make the environment conducive and infrastructure robust to fuel the growth of organized retail. Ultimately we too may need around 25 years to reach the stage we are aspiring to reach in 10 years.

So why there is hullabaloo in Indian retail orchard?
Imagine this scenario. You come up with a new kid’s junction where you give kids some great toys to play with in an ambience that interests kids immensely. You introduce it to a child. He loves it. The child’s parents can afford the price tag and also has a car to drive his child to junction. Encouraged by this success, you introduce the kid’s junction to some other kids whose parents could afford it and feel the enjoyment of their child. So you are excited as more and more kids get interested in your kid’s junction. Soon all the kids in the town whose parents could afford sending their kids to the junction have already become patrons and you are finding difficult to find new kids with well-to-do parents. Also, the initial excitement of this new kid’s junction has melted down now and it doesn’t excite kids as before.

That’s what is happening with soaring growth of organized retail and resulting euphoria. The organized retail is the talk of the town (and media) these days because it is servicing to the latent demand of fun-filled shopping experience in the big cities. Once this latent demand of the big cities is taken care of, the growth will slow down a bit. What is driving this euphoria can be summed up in this simple statistics: 6% of India’s population lives in top 6 cities contributing 14% of India’s GDP and accounting for 68% of organized retail.

Well, going beyond this to the heart of real India which is fragmented, scattered, and poor may not be so easy. So, tread carefully!

Employees As Brand Ambassadors

2007-01-14T19:14:00.000+05:30

In the normal course of life, I, like everyone else, encounter a plethora of brands. Similarly, I encounter employees of organizations that own or market these brands. Often, the disconnect between what the brand projects itself through advertisement, promotions, and quality; and what the employees' behaviour tells about the brand and the organization is palpable. In the end, I am left wondering - is the brand true to what it is projecting or are there things deeper than what meets the eye?

Probing a little deeper and combining the insight with my own experience in corporate world, it seems clear that organizations are not using their employees in enriching the brand experience of the customer. As it stands in majority of organizations, brand and branding is a domain that is considered the exclusivity of brand managers and marketing managers. For an average employee, brand management doesn't seem relevant and he/she is hardly aware of the nitty-gritty of the brands and brand management philosophies of his/her organization.

Why integration of employees with brand management process is important?
Brand is like an iceberg – 10% of it is visible externally and 90% hidden. And these 90% determine how the 10% is perceived. The 90% is all about people, processes, policies, organization, etc.

During the course of interaction with a brand, a consumer has several moments of truth – those vital moments that give insights about the hidden 90% of the brand iceberg. More often than not, the moments of truth are encountered by interacting with employees of the organization for one thing or the other. And this is one reason why employees are key players who can significantly shape up the perception of a brand.

A brand experience has to be complete to be effective i.e. it delivers the promise at every point of interaction the customer has with the company. The product or service may fully satisfy your need or want as promised, but if the customer encounters a bad receptionist during one of your interactions with the brand, a question mark may pop up in the mind of the customer. The challenge is to give a standardized brand experience at every point of interaction with the brand. And it can only be done if the all employees have brand orientation – what the brand stands for and what it promises to deliver.

Every employee has a personal and a professional life. In his personal life he will have many interactions with people. Many times the talk may veer towards the organization where a person works and the products and services of the organization. What an employee will speak during these personal interactions may have an impact about the perception of a brand in the mind of the other person. And through this channel of personal interactions, a number of things may be said about the brand to a number of people thereby affecting the perception of the brand in question. Do organizations give thought to this phenomenon of personal interactions of the employees about the brand and how it may impact them? Very few companies do. But this channel of interaction about the brand, the employees have in their personal life can be a powerful tool to enhance the image of the brand. If your employees are part of the brand management philosophy, and they are aware of its importance, then they will make sure they don’t blurt out something in their personal life that may negatively impact the brand. In essence, employees who are intrinsically engaged with the brand management philosophy will turn out to be “walking talking brand ambassadors” wherever they go, in personal or professional life.

Creating Brand Ambassadors out of employees
Once the importance of employees in delivering brand experience to the customer is recognized, the next step is to create “walking talking brand ambassadors” out of them. The process of transformation of an employee to a powerful brand ambassador is not as simple as it may sound. It’s a process driven activity that is done over a period of time to create a brand oriented culture in the organization – where the employees eat, drink, and sleep brand!

Some of the ingredients of this transformation process are:

Brand Ecology: First step of the transformation is mapping the brand ecology – how various interactions with the brand happen, both internally and externally. More importantly, how the employees interact with the brand and what kind of relationship they share. Once this is done, one can analyze if the interactions and relationship is in line with the defined philosophy of the brand and its essence. Identification of the gaps is essential so that proper actionable agenda can be chalked out to fill those gaps.

Brand Story: Based on the understanding of Brand Ecology, a brand story needs to be developed that can, in simple terms, explain what the brand is, its philosophy, and how employees are expected to drive it. People learn and adopt change readily if done with excellent story-telling. Driving a culture of brand among all employees is no different. If a simple story can tell how the image and the perception of a brand can get affected by behaviour of employees then employees would be more receptive to the brand orientation. At the same time, one needs to drive home the benefits and hardships to the employees accruing from their efforts or lack of it in driving the brand towards desired image and perception. In simpler terms, every employee must understand how his behaviour affects the brand and why it is important for them to drive the brand initiative.

Brand Communication: The next step is the role of communication. Here the focus is on the channels of communication to bring out the relationship that employees are expected to have with the brand. It may be through use of stationery, frequent informal talk by the leader, stickers, dress code, official parties and get-togethers, etc. The important thing here is reinforcement of the desired brand behaviour from employees. Communication about the brand and how employees are expected to drive it should be frequently communicated to have an impact on their subconscious. Communication should be such that desired brand behaviour becomes an intrinsic part of employees’ life. Consistency is another key word here. Consistency of communication will ensure that misunderstanding is avoided and a standardized brand interaction happens internally as well as externally.

Brand Alignment: Brand conscious employees are expected to perform three functions: to perform their work, to align brand values and philosophy to their work, and be the brand ambassadors. An organization which endeavours to create a battery of brand ambassadors out of its employees must develop processes that measure an employee’s effectiveness on all these three parameters of his work. This is very important to drive home the point that aligning brand values to work and being an effective brand ambassador is very much part of their core activities and something that should not be relegated down the order of priorities.

Finally, the world is all about brands and branding. The better brand you have, the better you are. If your people can become effective brand ambassadors, then there is only one way to go i.e. forward.

Circa 2015

2006-12-30T17:48:00.000+05:30

My mobile phone rings to the ringtone of 'life is beautiful'. It's a video call from my 6 years old daughter. With a smile I take the call to see my smiling daughter put on her sweetest voice to tell me what she wants.

"Hi papa, I need the latest Barbie doll in her astronaut avatar. And some chocolate also. I've finished the last story book you bought and I'm getting bored so you better bring me some story books too. And papa, please buy me the CD of the new 'princess in distress' game. Please, please, please. That's all, my sweet papa", she finishes in one breath.

"Sure my lovely daughter", I say before my daughter disconnects.

The screen of my mobile phone starts showing the screen saver with images of my family in various moods. I open the browser of my mobile phone and log in to the “one stop e-tailer”. With Delhi becoming a wi-fi city and my mobile phone working as a mini-laptop, I can take care of all my online activities from my mobile anytime, anywhere. So I punch in the long list given to me by my daughter in the online shopping cart, pay the bill of Rs 1395 with my mobile (yes, mobile phones now act as credit card as well), and ask for delivery to my office. It's 3 pm and I'll leave office at 6 pm so I opt for normal delivery of 2.5 hours instead of express delivery in 1 hour. Having taken care of my daughter's list in 5 min, I get back to work on my presentation for the client meeting.

30 min of work and my presentation is almost ready. As I think of moving to the coffee vending machine, my mobile phone rings again, this time to the ringtone of 'O mere sona re sona'. I immediately know that my wife is video calling. As I press the yes button, I can see my dew-fresh wife on my mobile screen ready to sweetly bark some homely orders.

"Hi honey, how are you doing", she asks me in her honey dipped voice and I immediately know that I’m supposed to do some household chore.

"Hi sweetie, have a presentation in 30 min. Just finished with preparation", I say like the most humble husband. Times change but some things never change like the sheepish demeanour of Indian husband in front of his wife.

"Okay. Acha listen, I've ordered grocery, fruits, vegetables, and some other items from ‘one stop e-tailer’. Since I'm going to see the ailing son of Ms Kapur and will be back only by 7 pm, I've asked for delivery at your office. It's an express delivery and will reach you by 5 pm. So please bring it home. Chalo bye. I’m getting late", she quickly instructs, gives her killer smile, and disconnects.

I head to the coffee vending machine for hot black coffee. Back to my cubicle with steaming coffee, I decide to check my credit card statement. So I send a SMS and immediately receive a mini statement. Huh, my online shopping bill is increasing by the day. 5 days still left in month and already transaction worth Rs 20729 billed and this includes grocery, vegetables, books, DVD, restaurant bill, fuel, and other sundry items. I make a mental note to reduce expenses.

The presentation went well and client was happy. As I come back to my cabin, I notice that both orders have been delivered and the grocery packet is too big. My secretary has received them on my behalf. So I call her to convey my thanks. It's already 5.50 pm and I’m feeling mentally exhausted. So I decide to pack up and head home.

Traffic is not so bad. I put on some old Hindi songs and start navigating my car. As I wait for green light at one of the traffic signals, I see the deserted Rel-fresh store. The traffic signal turns green and as I press the accelerator, I notice the big bill-board in front that says 'Now get your Rel-Fresh vegetables online. Guaranteed delivery in 2 hours!’ As I shift gear and move ahead, I say to myself, "Organized retail is dead, long live organized e-tail"

Great Indian Retail Dream: Euphoria Or Reality?

2006-12-28T22:09:00.000+05:30

Retail is in vogue these days. Not a day passes without noticing a feature or article on retail in pink dailies. Everyone is talking retail as if it's the new age California gold rush. But in this hullabaloo, two thing are intriguing me –

Nobody is talking about how e-tailing would evolve in India and how it may impact ‘bricks and mortar’ organized retail,
Nobody is giving serious air time to so called ‘mom and pop stores’ and how they may influence organized retail's growth plans.

And this makes me wonder - is all the retail buzz, billion dollars investment, and projected revenue a mere euphoria born out of flavour of the month syndrome or is it real?

E-tailing: What is the future?
This is perhaps the least discussed and most under-estimated phenomenon in the current obsession with retail that entire corporate India is displaying. Where is e-tailing headed, how it could evolve, and what impact it can have on development of organized retail is a question worth exploring. When billions of dollars are coming into play, it’s not prudent enough to leave any aspect, however insignificant it might appear, unexplored. One never knows when the underdog would tumble the whole game upside down!

A few facts first: 40 millions internet users. 2 millions broadband connections. 140 millions mobile telephone subscribers. 45 millions credit/debit cards.

How will these same facts be in 2015, the milestone frequently being discussed in the Great Indian Retail discussion? To be true, no body is sure, at least after seeing the growth trajectory of technology and internet over last 10 years. So let us try to explore a little with some commonsense. But before that, a tidbit: In 2002, the market capitalization of Chinese internet companies was Rs 2000 crores; today it is Rs 100000 crore!!

In 2007, e-tailing is expected to hit Rs. 5000 crores in B2C segment. Currently, bulk of these is revenues generated from railway tickets and air tickets bought online. An estimate puts the retail e-tailing at around Rs. 400 crores i.e. around 2% of the $4 billion organized retail. According to IAMAI-IMRB study, Internet users are expected to grow to 54 millions by March 2008 with 80% or 43 million active users (usage of at least once in a month). Moreover, currently only 2 million broadband connections are there in India which is roughly 5% penetration among total internet users. This is expected to grow steeply in coming years. Also, according to IOAI, the current average transaction per user for online shopping is estimated to be around Rs. 1100 and the number of transactions per month is estimated to be 795000 per month.

So how will the numbers look in 2015. A conservative guess from my side: 130 millions internet users; 100 million active users. 50 millions broadband connections. 300 millions mobile telephone subscribers. 150 millions credit/debit cards.

Next thing worth mentioning is the growing usage of mobile phones and emergence of the mobile device as a convergence tool (phone + entertainment + camera + video camera + internet + PDA + GPS+ gaming). With the introduction of 3G services, access to internet will become fast and affordable alongwith always-on connectivity.

As a buyer I have some needs like –

Convenience
Choice
Value for money
Speed of delivery
Location neutrality
Time neutrality
Convergence

The question that arises is how the combined effect of rapid growth in internet users, broadband penetration, emergence of mobile phone as a convergence device, and the technological advancement will impact the e-shopping scene? My answer is – it will revolutionize the e-shopping in India.

The pieces of the puzzle will, in all likelihood, fall into place in the following manner:

Rapid increase in internet penetration: With the penetration of broadband services expected to increase manifolds, faster speed and availability of more and more services on internet are going to drive the internet penetration at an amazing rate. In addition to this, availability of internet through mobile phones is going to increase the numbers of internet users significantly. Increase in availability of content in regional languages is another aspect that will drive the penetration level. To expect a 130-150 million internet users with around 100 million active users by 2015 would be a conservative estimate.

Easy payment: One of the major roadblocks to growth of e-shopping is the payment mechanism. First, the credit card penetration is low. Second, apprehensions about security are high. Both of these can be adequately solved in coming years with emergence of mobile phone as a credit card. ICICI Bank has already testing a similar concept. The day may not be far when to pay through a mobile phone, you will just have to punch a few numbers and send a SMS. Better still, soon you may find mobile phones capable of scanning the bar code of your bill and transmitting the data to your bank for clearing payment.

Always-on mobile connectivity: Majority of internet connections as of now are not wireless resulting in making them immobile. With increased use of wireless connectivity in coming years through presence of wi-fi in offices, airports, cafés, even entire city turning wi-fi, and access to anywhere-anytime internet through mobile phones, internet is bound to become quite mobile. So for accessing internet you may not have to visit your office or home. You might need just your mobile phone or just your laptop connected to the wi-fi surrounding you. This, in all probability, will make time and location irrelevant.

World class back end operations: Current macro level supply chain in India is full of process inefficiencies resulting in massive economic waste. Organized retail is primarily driven by highly efficient backend operations and logistics. Heavy investments by players in organized retail in streamlining backend operations and bringing in process efficiencies will nevertheless enhance macro level supply chain and backend operations. But the real beneficiary of all these may not be organized retail but e-tail. It may be similar to the case of the internet bubble burst of 2001 – companies that invested heavily in under-sea cables going bankrupt and new companies buying these under-sea cable infrastructures at a cheap rate to make world flat in next 4 years! This irony may get repeated in e-tailing as well – backend infrastructure built by brick and mortar retail chains and benefits of these accruing to e-tailing companies. It is a possibility!

Speed of delivery: Way back in 1998, when e-commerce just started in India, the delivery time was routinely around 25-30 days depending on the item bought. In 2006, this delivery time has shrunk to around 2-3 days. And my guess is that by 2015, the delivery time may further shrink to 2-3 hours with increased focus on streamlining backend operations, better technology, enhancement of process efficiencies, and better partnership with suppliers and logistics agencies. The day this 2-3 hours delivery target is achieved, that day would be the day of reckoning for e-shopping in India.

One stop e-shop: One of shopper’s delights is the availability of various products and services under one umbrella. Retail chains have in past flourished by offering a number of products and services under one roof. The success of Walmart may not only be in the “everyday low prices”, equally likely is the “everything is here” factor. But still, the retail chains due to their physical nature have some constraints on making everything available under one roof. The virtual world is different. Here you don’t need to own everything at a place physically. Here you have to claim virtually that you deal in everything but you need not have possession of everything. It’s all about backend operations – hubs, suppliers, logistics. So with the paucity of time griping the consumers more acutely in near future and forcing her to find avenues to buy maximum of her needs at one place at her own convenience, e-tailing may be the ultimate winner.

Let’s play a little with numbers…
Let’s say we have 100 million active internet users in 2015. Assume that 40% of these active users do an average of Rs 3000 worth of e-shopping every month. The annual e-tailing revenues would come to Rs 144000 crores or $31 billion or 48% of projected organized retail in India by 2015.

Take it another way – According to IOAI estimates, number of e-shopping transactions per month in 2005-06 was 795000. Average value of each transaction was Rs 1100. Assuming the growth of number of transactions at 50% every year till 2015, the number of transactions per month in 2015 would be around 30 million. Assuming the growth of average value of each transaction at a modest 12% every year, average value of each transaction would reach Rs 3050 by 2015. And this would turn into annual e-tailing revenue of Rs 110000 crores or $24 billions or 38% of projected organized retail in India by 2015.

Now you take your own call on e-tailing, its future, and how it may impact the growth of much hyped organized retail.

Kirana Stores: Darwinian evolution or something else?
It might eventually turn out to be a David vs. Goliath story! Experts are quick to pass verdict that Kirana or so called ‘mom and pop’ stores will suffer in the organized retail game. But that may not be so easy. India is a nation of shopkeepers with around 12 million retail shops, majority of them occupying areas under 500 Sq feet. The shop density is highest in the world with 11 shops for every 1000 persons. These shops operate in localized environments, with localized terms and conditions including credit facility, and are on beck and call of customers, always ready to service them in the most convenient way or as desired by the customers. Why should I go to a mall 5 KM away from my house to buy my bread and butter when I can get it home delivered by the friendly shopkeeper across my house with just a phone call?

Another thing that experts are forgetting is the car penetration and refrigerator penetration in India. Both are abysmally low for a nation of India’s size. But commonsense would tell that both are in someway connected to the growth of organized retail in western countries. Car penetration is 7 per 1000 people. Refrigerator penetration is 161 per 1000 households. As per NCAER, refrigerator penetration is expected to be 225 per 1000 households by 2010. To get the benefits of lower prices and convenience of malls you need a vehicle to travel 5-15 KM to the nearest mall and carry your booty back to home. Once at home, you need to keep foods and grocery part of your booty in proper refrigeration to last you a week or two. Given the low penetration of refrigerator and the tropical climate of India, that is a big challenge. Hopping mall to buy less than a week of supply is purely not worth all the discounts bundled together.

Another fact of life in India is that, according to NCAER, out of 205 million households, around 90% of them have annual income less than Rs 2 lacs. Even within this segment, 71% have annual income of less than Rs 90000. This proportion of households – with less than Rs 2 lacs annual income – is not drastically changing in the next 5 years. And this is the segment that perhaps spends the highest on items like food and grocery – the same items that constitute about 75% of the great organized retail dream! This segment of the population makes small purchases weekly or every few days and depends to a large extent on monthly credit provided by kirana stores based on localized trust. Can the organized retail cater to this segment that lies at the heart of Indian retail?

Organized Retail: Real or Mirage?
No doubt that organized retail is going to be a growth sector with some opportunities to tap. But considering the income profile and habits of Indians, I guess that the organized retail at best can touch 50 million households or 200 million people by 2015. These will be mainly people in the Rs 2 lacs and above income bracket. Even within this segment, organized retail will have a tough fight from e-tailing and the evergreen Indian kirana. So where will this hullabaloo and big ticket investments lead? One thing is sure that huge investment will do a lot of good in improving the supply chain, particularly agri supply chain – and logistics operations in India.

Organized retail players would do well to take into consideration the following:

Have an e-tailing strategy side-by-side to effortlessly shift into e-tail mode if there is seismic shift in retail landscape. Futurebazaar, the online version of the Kishor Biyani promoted Future Group is perhaps a step in this direction.

Avoid owning costly real estate to develop glitzy malls and hyper-malls. Emergence of e-tailing as a significant channel of retail can make all investments in posh real estate redundant. Instead, it would be better to focus on backend operations and development of hubs as these will come handy in case there is a need to shift to e-tailing mode.

Explore partnership with kirana stores. They have unique advantage considering the demographic and income profile of consumers. All the hype about “everyday low price” may not undermine their localized advantage. If you want to serve 90% of Indian market, you will need a tie-up with them. Explore becoming a partner. Think about the franchisee route or become a distributor. Reliance Retail is perhaps exploring this!

And finally, I would just say – It’s India, it’s different! So play safe.

Leadership Wisdom From Sunil Mittal

2006-12-25T23:51:00.000+05:30

Today, there is an insightful article – The Risk Coefficient – in The Economic Times by Mr. Sunil Bharti Mittal.

Mr. Mittal talks about the challenges before the new age CEO and the critical success factors in an economic environment that is ever evolving and is in a constant flux.

Key learning:

Ability to take decisions amidst uncertainties is at the root of new leadership paradigm.
Managing the current as well as future breed of volatile customers, reading their mind and predicting the future consumption trend.
In this era of me-too products that flood the market place, the key to survival and success of an innovation is speed to market.
Retaining talent and building a team around then is as critical as recruiting talent.
The key to talent retention is building structures and processes that keep the organizational objectives and employees’ aspirations in alignment.
Build adaptability in the system to quickly respond to changes in macro environment.
Build a learning organization that promotes individual and collective learning as well as systematic unlearning of past knowledge that becomes irrelevant.
Out-of-the-box thinking is one of the essentials of new leadership.
The ideal CEO is one who has the spirit of an entrepreneurship, who sees opportunities ahead of competition, and who is not afraid to challenge conventional wisdom.

Profit Is Not A Bad Word

2006-12-23T23:10:00.000+05:30

“Profit” is a tricky word that generates dread among the masses. The myth of profit is so strong that majority of people associate profit with greed, exploitation, and corruption. Even the “intellectual elite” often fail to see profit as a facilitator of holistic development of society and nation. They see business and profit together but fail to bring sustainable socio-economic development in this fold. The result of this ignorance: Flow of billions of dollars of money in poverty alleviation programs around the world with hardly any significant impact.

The problem is that we are yet to shun the “give him fish and you feed him for a day” mentality. The issue is all about incorporation of sustainability factor to embrace the philosophy of “teach him fishing to feed him for life”. The problem with poverty stricken people is not that they are not enterprising or that they don’t have capacity to consume. Their problem is getting off the ground. They don’t have even $100 – more often than not sufficient to fund their enterprise – to start a revenue generating activity. What they need is a little finance (typically in the range of $100 - $500), some guidance, counseling, and creation of a market where they can have active economic participation to create their own self-sustaining micro-enterprise.

Sustainability factor can come with the introduction of the element of enterprise. With enterprise, profit will come in picture creating a sustainable loop of “wealth creates wealth” cycle to aid development in the true socio-economic sense. But very few people think on this line, and those who do are making significant impact in the lives of a few million people. Be it the microfinance ventures or companies servicing the bottom-of-the-pyramid (BOP) market or initiatives like ITC’s e-choupal, they are making an impact, though in pockets of civilization, through means of social and economic partnership, enterprise, technology, and profit.

The most contentious issue is the involvement of individuals and enterprises that go to serve the poverty stricken mass with an intention to generate profit and wealth through servicing of this bottom-of-the-pyramid market. The question that is raised frequently is: how can an individual or organization that is interested in profit can help in removal of poverty and acceleration of socio-economic development of suffering masses? The underlying assumption is again the myth that profit is associated with exploitation and that capitalism is good only for a select few. But reality is vastly different. When for-profit ventures operate to serve this BOP market, then the flow of profit and wealth is two-way. The profit accrues to both the for-profit enterprises that serve as well as the BOP customers who get served. It’s a win-win situation with mutual benefits and trade-offs.

Recent success stories like microfinance, HLL’s Project Shakti, ITC’s e-choupal, etc. have demonstrated that for-profit social collaboration is the key to faster socio-economic development of poverty stricken people. These success stories have proved that ensuring active participation of the deprived in economic activities is the most sustainable way of uplifting the masses from the morass of poverty. And the master key is ‘profit’ – the fuel that fires the socio-economic enrichment of the deprived.

If we are really serious about removal of poverty and narrowing the economic divide, it is the right time to start worshipping ‘profit’. Socially Oriented Capitalism is the only way to ensure holistic socio-economic development and enhancement of the quality of life across the entire population.

Nuggets of Management Wisdom #9

2006-12-21T23:49:00.000+05:30

Wise men challenge their beliefs; fools rationalize.

Very often we have our own views, ideas, beliefs, thoughts, solutions, and strategies to deal with our personal and professional lives. Equally likely is the tendency among majority of us to justify or rationalize them, often without objective analysis or consideration. The goal is to arrive at some reasoning – even if specious – that appears to validate our way of thinking.

This particular behaviour to rationalize one’s way of thinking, without objective analysis, is rampant in corporate corridors. There seems to be a race to prove oneself right and others wrong on an issue, even though others may be right! There is nothing wrong in debating and proving your beliefs and ideas, but that needs to be done in an objective manner supported by facts and sensible reasoning. It should not be misleading – either intentional or unintentional.

Wise men are different. They consider their ideas and solutions as hypothesis and put them to rigorous trial by fire. They leave no stone unturned to prove their ideas wrong. They even encourage others to try to disprove their hypothesis. Only when they fail to prove their ideas wrong, do they accept it as true and worth pursuing. This trial by fire also ensures that people get convinced about an idea or solution or belief, and give their best to bring it to fruition.

The difference between fools and wise men is simple: Fools try to prove themselves right by inventing innovative and unrelated reasoning; wise men prove themselves right by failing to prove themselves wrong despite earnest effort!

Why Change Management Programs Fail?

2006-12-13T22:26:00.000+05:30

The failure rate of change management in organizations is very high. Often they fail outright or fall sort of expectations. The problem lies somewhere in the way any change initiative is approached. Most change management programs start with structure of an organization, and there lies the problem that ensures that these programs don't deliver desired results.

Organization is not about structures, processes, systems, technology, hierarchies, and culture. These are mere branches or offshoots of an organization. The roots of any organization are the people who work there. Any change management initiative that doesn't start with people is bound to fail. The mantra of any successful change management is "people first, everything else next".

The point is simple – you can have best structure, processes, systems and technology, yet if your people are not willing or are unequipped to deliver, everything will come to naught. So unless one starts with people, one can't change an organization. To grow a healthy plant you need to nourish the roots so that nutrients reach all parts of the plant. You can prune down the plant, you can clean the leaves and polish them, you can support the stem, and you can artificially scent the flowers; but if the roots are not well nourished, all these will not prevent the plant from decay and death. Roots are crucial for survival. Similarly, you need to start with people – the roots of any organization – in any change initiative so that right energy flows to various offshoots of the organization and helps it grow in the desired direction. If roots of the organization are taken care of, rest of the things can be managed with a little tweaking and pruning here and there.

But changing people is not so simple or easy. It’s all about behaviour changes, training, cajoling, persuading, badgering, convincing, confronting, shaping-up, and shipping-out. It’s an interplay of opposite poles to create harmony amid conflicts. But it is definitely not impossible. Perhaps, it is the only sensible way to ensure that change initiatives succeed in organizations.

Some Fodder For Thought...

2006-12-12T23:23:00.000+05:30

“The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.”
– Bertrand Russel

“Bureaucracy is the enemy. Bureaucracy means waste, longer meetings, slow decision making, unnecessary approvals, anything that kills an organization’s spirit.”
– Jack Welch

“The only way to discovering the limits of the possible is to venture towards what someone would believe is impossible!”
– Arthur C. Clarke

“I cannot believe that the purpose of life is to be happy. I think the purpose of life is to be useful, to be responsible, to be compassionate. It is, above all to matter, to count, to stand for something, to have made some difference that you lived at all.”
– Leo Rosten

Some Reflections On Life At 30000 Feet

2006-12-11T23:52:00.000+05:30

Today morning I was returning from Jodhpur to Mumbai. All of a sudden at 30000 feet above the ground, I started thinking about the mistakes I had committed in my life. I don’t know what triggered this, but my mind was racing to past to figure out what critical mistakes I committed, both on career as well as personal front. It was not remorse or the ‘if and but’ type of pondering. It was more of a reflection. It seemed like a puzzle where I was trying to figure out where I erred and why I erred and what I should learn from it to avoid a repeat in future.

And it was worthwhile. The 2 hour long journey was well spent and at the end of it my mind appeared to be clear and light.

Without going into the details of the mistakes I committed, let me just share with you some key learnings that I deduced from them. May be it can be of some use to you.

Take your own decision but hear what others have to say with your ears as well as mind open.

Take ownership of your decisions in life.

Circumstances in life may not favour you always; but you must do a favour to yourself by not kneeling in front of circumstances.

Always try to find a mentor in life – be it career or life in general. Many people have seen the world for much more time than you and they have seen it from many angles. Utilize the wisdom they have gathered through the rough and tumble of life. It will save you a lot of time in your own journey called life.

You never know when you will need someone. So avoid doing anything that closes your access to someone. As far as possible, be friendly.

Don’t delay in taking decisions. Once you decide something, just put your heart into it and take action. In life or career, delay in taking decisions is indecision and is often too costly. Also, right decisions often come to mind in a flash and it’s important we respect those flashes of brilliant decision making by avoiding excessive analysis that kills those right decisions. As far as life is concerned, we need to hear and trust the ‘inner voice’ more often.

Don’t get emotionally entangled with someone without fully understanding how much trustworthy he or she is. Too much emotion too soon often brings too much pain and misery.

Live and let live. Always try to avoid a head-on collision. But at the same time never shy away from fighting for what is right.

Claim your rightfully deserved share of pie. Altruism and selfishness are two extremes. Learn to take the middle path.

Don’t be afraid of making mistakes in life. But at the same time don’t shy away from looking back to reflect on the mistakes you committed and learning something that helps in avoiding repetition of such mistakes.

Be humble. It makes life much easier to live in times of both glory and doom.

Meeting Mania

2006-12-08T23:38:00.000+05:30

Meetings, meetings, more meetings
Insanity, insanity, more insanity
Indecision, indecision, more indecision!

Of the many things I hate about the corporate world, meetings are somewhere near the top. I dread meetings, particularly badly conducted meetings. And meetings conducted just for the sake of conducting – because they are on some periodic schedule – are a nightmare. Not only this meeting mania is frustrating, it is a trigger for a chain reaction that seriously damages the productivity and effectiveness of the organization. And top it up with the cost of conducting a useless meeting!

Chaos originates from meetings when:

Meetings are conducted just for the sake of it

Meetings are conducted without any well defined objective.

Meeting are badly conducted and become directionless.

Meetings don’t start on time.

Attendees are missing or delayed.

Meetings don’t end on time.

Meetings remain inconclusive at the end.

Meetings result in conclusions that are vague and without clear responsibility center and deadline.

Meetings run without any agenda or unnecessarily drift from the agenda midway.

Meetings become a fish market.

Meetings are used to fight turf wars or blame games.

To keep the productivity of organization and its employees at optimal level, meetings must be managed in a very professional manner. This is a necessity in today’s times when the pressure to deliver results is ever increasing, and any wastage of productive time is criminal.

Given below are some of my thoughts on how to make meeting a facilitator of productivity and effectiveness:

Call a meeting only if it is really necessary.

Prepare a well defined agenda with discussion time specified for all the items of agenda. Keep it short and simple, and include only what is necessary.

Circulate the agenda well before the meeting to all the attendees.

Start the meeting on time and strictly stick to the time limits for each item of the agenda.

Let the conductor of the meeting set the directions throughout the meeting.

If any attendee is late, either cancel the meeting or start without him. Also, make sure that he realizes that his late coming is not at all appreciated, and in future he should follow German time standards or else…

At the end of discussion on an item of agenda, jot down the actionable part with clearly defined responsibility center and deadline. Be decisive through out the meeting.

Finish the meeting strictly on time. Running a meeting effectively will ensure this. Only in exceptional cases and that too if it is extremely urgent, stretch the meeting beyond pre-determined end time.

Have the actionable conclusions circulated to all the members within an hour. No need for detailed minutes of meeting running into pages. For the sake of records that may be prepared and filed/ circulated. But definitely that is not a priority. But circulation of actionable conclusions is top priority.

But this can work only if driven from the top. If the leader practices this, the followers too will follow. But if the leader only preaches and hardly, if ever, practices, then followers too will get conditioned to preach without practice; and the tyranny of meetings will continue to rule the corporate corridors.

Avoid meeting mania in self as well as public interest!

Who Determines Quality?

2006-12-05T23:24:00.000+05:30

Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.

– Peter Drucker
All the product managers, brand managers, and marketing managers out in the sun to woo the customer should take note of this simple wisdom. Well, it’s not rocket science, but pure vanilla commonsense that quality is determined by the customer not the producers. Producers can at best meet the quality specifications of the customers. And yet the product managers frequently – if not always – start with themselves rather than the customers before designing a product.

Second take-away of this profound wisdom is the fact that quality is relative and not absolute. So it would be better to see quality in terms of value it has for a customer. In that sense, same product can give immense value to a segment of consumer and no value to another segment of consumers. Hence, same product can offer great quality for a segment of consumer while another segment may consider it of inferior quality.

Third take-away is the fact that quality is not about the product or service but about the perception of the product or service in the minds of customer.

And all the above boils down to the eternal fact that the customer is king (or queen for that matter)

Isn’t it simple?

Leading Less, Managing More?

2006-12-01T23:46:00.000+05:30

Are we leading less and managing more? This is what I asked myself this morning. I don’t know why this thought crossed my mind but it set my mind rolling for an answer.

What do you see around you? Is it quarter targets, bottom-line, attrition, disenchantment, micro-management, analysis-paralysis, frustration, routine, monotony, lack of creativity and imagination, heavy dose of organizational politics, distrust, etc.? If you are part of a typical business organization, it is very likely that your answer is yes; and if it is so then it is a sign of too much management and too little leadership.

Perhaps one of the prominent causes of too much management and too little leadership is short term focus that seems to be in vogue these days. The growing obsession with quarterly numbers and the resultant stock market drama is dominating the corridors of corporate headquarters. Quarterly numbers have become so sacrosanct that if you don’t meet your quarter targets you are doomed. But how good is this for the long term future of the organization? What kind of culture does it cultivate? Does this affect the motivation of people? Does this kill creativity and imagination in the workplace? Does this obsession with short-term open a Pandora box of other serious long-term maladies? Does this utilize the talents of people in the best possible way? Does this hamper the development, growth, and engagement of people? Is vision becoming out of fashion? Is radical thinking taking a back seat in favour of meeting short-term targets? How will all these change the course of business in coming years?

Think over it!

Rising To The Challenge...

2006-11-20T23:22:00.000+05:30

“People rise to the challenge when it is their challenge.”

– Belasco & Stayer

This is really some food for thought for every leader and every manager. It is quite profound and yet so simple.

People work best when they own something. Unless there is a sense of ownership involved, the motivation to excel in any work is never optimal. For optimal motivation, one always needs a sense of belongingness and a feeling of close association with success and failure of something. Unless you establish a chromosome connect between your people and the projects they work on, you can never get the best out of them. Make something their baby, tell them explicitly that it is their baby; and they will do all they can to raise the baby in the best possible way.

Give it a try. It can’t fail you!

Nuggets of Management Wisdom #8

2006-11-09T22:57:00.000+05:30

Don’t trust always, but first trust and then see if the person is trustworthy.

Yesterday, this gem of a wisdom transpired during a discussion I was having with a Senior Vice-President of one of India’s leading software companies. He said, “Not that I trust always, but I believe, first trust then see if the guy is trust worthy or not”. Nothing less than classic management wisdom! At that time, the gravity of his words didn’t go down my head immediately. But as I pondered over it and reflected, it dawned on me that this management wisdom is much needed in today’s world.

Trust and confidence go hand in hand. Only trust can generate confidence. When there are so many things to do requiring varying competence in so little time, delegation is the natural way out. With effective delegation, accountability and authority flows down but responsibility rests with one who delegates. This responsibility demands that work is delegated to someone who the delegating person has confidence in.

So instead of following the traditional time consuming process of first building confidence over time before trusting, use this nugget of wisdom to reverse the process. This will not only result in better use of time and talent but will also ensure that trust worthy people are found early and trust defaulters are weeded out as quickly.

This approach will also develop an excellent emotional bonding that will ensure that person who has been trusted gives his best to prove himself quickly and reinforce his trust worthiness.

But this approach is not for the chicken hearted. It takes guts to use this approach.

Google Docs and Spreedsheets

2006-11-08T22:54:00.000+05:30

Fellow blogger and my senior at B-School, Rajesh has raised some pertinent questions about Google Docs and Spreadsheets on his blog.

Here is my 2 cents worth of opinion on the issue.

First of all, I feel that to analyze Google Docs and Spreedsheets, target audience is not the ideal place to start. This recent service of Google is perhaps futuristic which will fulfill a need (still in nascent stage) which has the potential to become a want in a few years time for millions of people. And the key word perhaps is ‘collaboration’ which was mentioned at one point by Rajesh also. The world is shrinking, time zones are becoming irrelevant, and no one person is intelligent enough to tackle the emerging scenario. The emerging world and definitely the yet to emerge world would be dictated by synergy of minds spread across seven seas. Perhaps the only survival kit in future in such scenario is going to be COLLABORATION. Google Docs and Spreadsheet may be one of the baby steps in that direction that will aid collaboration.

Secondly, one of the offshoots of collaboration is going to be the death of software as we know it today. Collaborative platforms like open source software and confluence of minds from all across the world might send chill down the spines of the likes of Microsoft. In a few years time, as the open source community grows and collaboration becomes stronger and stronger, no body will go to purchase standard operating systems and software of the likes of MS-Windows and MS-Office. Either they would be downloadable for free or they would be working online without any installation on the hard disk of the system. This transformation is going to be aided by cheaper and widely available bandwidth in coming years making always-on connectivity a necessity for scores of people around the world.

Already many cities are planning to become wi-fi and, in say 5 years time, I can visualize many cities around the world becoming wi-fi giving always-on connectivity to people. The day may not be too far when the roti, kapda, aur makaan slogan may turn to roti, kapda, makaan aur broadband. I don’t think it’s a utopian fantasy considering the continuous flux the world is witnessing and the role connectivity is playing in various spheres of life and society. With such always-on and almost free connectivity, it is very likely that free internet based operating systems and software made possible by collaborative efforts of open source platform may replace both standard operating system and need of basic software.

So where does Google fit into all this. Simplistically, it is providing a free basic internet based software for real time collaboration from anywhere at anytime making the use of paid software almost redundant for basic computing needs. Apart from this, having ambition to own information, Google will in all likelihood get to see the contents of this service stored in its databases thereby giving it access to a vast universe of information that may continuously throw light on latest or emerging trends and also present Google with many new opportunities to tap.

Initiatives like Google Docs and Spreadsheets are all about empowerment, collaboration, connectivity, and freedom. Definitely, Google is playing a long term game which in short term may not make much sense. But just consider the market for word processors and spreadsheets and what will happen if 75% of these shifts online to services like Google Docs and Spreadsheet in 10 years timeframe. Planning to kill a monopolistic giant like Microsoft requires a visionary look into the future. Perhaps Google is seeing what remains invisible to the naked eyes of ordinary mortals like us.

Let’s see how the story unfolds.

Technology: How Well Your Organization Is Using It?

2006-11-05T22:34:00.000+05:30

With availability of myriad communication tools and the power of internet, the world is rapidly shrinking in time and space. Many organizations are using these new-age communication technologies to empower their people and change the paradigm of doing business. And this is evident in the astronomical growth and innovative practices of many organizations.

But as the world is becoming smaller and smaller, some companies in India are still in deep slumber blissfully unaware of how the world is changing. These are typical command and control organizations that believe in archaic philosophy of not disturbing the status quo if something is behaving in predictable ways. But in the process these organizations miss many opportunities of massive growth and betterment not only for self but also for its customers, employees, and society at large.

There are many companies in India, which in this day and age of free information and lightning fast communication, censor the usage of internet in office. They don’t give access to internet to many of their employees thinking that it would be misused. The reasons can be as bizarre as “employees visit job sites”, “employees do personal things on internet”, “employees play games on internet”, “employees chat with friends and neglect official work”, etc. To me this kind of logic seems nothing less than childish. For instance, an employee interested in visiting job sites will anyway do so after the office hours from her home or cyber-café. Blocking internet in office is no way of engaging the employee or to tackle the issue of attrition. Similarly, with the advent of internet access through mobile phones, the concerns of the employer can never be justified. With a GPRS enabled compatible mobile phone, internet access is possible anytime and anywhere. So it’s foolhardy to believe that if you can cut the access to internet or technology for an employee in office then he would be cut off from that technology all the time. It’s a no-brainer yet many companies are yet to understand the damage they are doing to themselves with such ridiculous policies. My simple philosophy is: If you can’t trust your employees with productive use of technology then either you are not hiring right or you are not leading your employees effectively.

Another problem with some organizations is that they apply technology but don’t milk the technology fully. An example: The latest version of Lotus Notes has chat facility but many of the organizations that use Lotus Notes as an email client keep the chat facility disabled. I have a simple question: Who is at loss? The answer is much simpler. It is the company which suffers due to under-utilization of the technology for which it has paid a big price. For instance, encouraging the use of chat facility will result in cost-effective real time communication. It will save on telephone bills. Moreover, it can aid faster decision making and at the same time avoid many a nuisance created by telephone. This is just an example.

There are numerous such instances when under-utilization of technology or censor of technology results in massive cost and least enhancement of productivity. The problem with technology is that it can’t be as effective in isolation as it can be in a holistic framework. Technology works best when it is open and uncensored. The sooner Indian companies learn this, the better it would be.

Nuggets of Management Wisdom #7

2006-10-22T22:27:00.000+05:30

Never hire a homogenous group. Promote diversity of thought and personality.

Often, while dealing with colleagues or team members or subordinates, we tend to get attracted towards those who make us feel ensconced in our comfort zones. The typical mentality is to work with people who are like us. We get attracted by people who we feel are like us and get repelled by people who we feel are different from us. But in the reality of organization and the kind of problems that has to be solved, the homogeneity factor is less effective and efficient than heterogeneity factor. Colouring the entire organization or a team in one shade is never a good idea as it kills creativity and discourages innovative solutions to various problems.

When diversity of thought and personality is present in a team or organization, it gets turbo-charged. A problem gets viewed and analyzed from various perspectives depending on the personality and thought process of the individuals. This results in a spurt in ideas to solve problems in a creative and innovative way. Even the friction – that often gets visible in a heterogeneous group – is fuel to fire creativity and effective problem solving if managed in a matured manner.

Where a homogeneous group approaches any issue or problem, it views it from one common angle; while a heterogeneous setup approaches the same issue or problem and views it from multiple angles throwing in numerous possibilities.

Ultimately, for an organization it pays much higher dividend if a culture of heterogeneity of thought and personality is cultivated.

Happy Birthday Logical String

2006-10-16T05:06:00.000+05:30

Logical String is 1 year old today. Exactly one year ago, I started my journey into the blogosphere. One year and some 100 posts later, Logical String is going stronger by the day.

Logical String may not boast of a very high traffic; but definitely it has managed to build a small base of loyal readers who religiously come to check the thoughts posted here. This in itself is a great feeling.

When Logical String was started there was no particular agenda on the kind of thoughts to be posted here. But over the year, to my delight, Logical String has emerged as a business blog with focus on original thoughts rather than a place for link dump.

Apart from being an outlet for sharing my thoughts and rekindling my passion for writing, Logical String has been a great networking agent as well. It has helped me in making many great friends whose company I cherish and who have contributed in expansion of my intellectual horizon through stimulating debates and discussions.

In the coming year, Logical String will try to keep up the momentum and increase the frequency of posting without compromising on quality and originality of content.

I thank all the readers and well wishers for their support, encouragement, and constructive feedback. I am sure the bonding between Logical String and its patrons will only grow stronger in days to come.

Nuggets of Management Wisdom #6

2006-10-15T21:03:00.000+05:30

Never allow information, knowledge, or power hoarding. Ask all managers to be always ready with their replacement.

Many times there is a sense of insecurity among managers. This insecurity gets manifested in hoarding of information, knowledge and power. Though this tendency may give a feel good and secure feeling to such managers, it is disastrous for the organization. The worst aspect of this tendency is failure to develop and groom the managers down the order resulting in vacuum at some places within the organization. Once such insecure manager leaves the organization, there is no one who can immediately and effortlessly move into the shoes of the outgoing manager. And the organization suffers.

Another offshoot of this tendency is the improper dissemination of information and knowledge across organization often resulting in lack of right information at right time at right place. Again it is the organization which is at loss.

So the way out of this problem is to ask each manager at every level to be ready with their replacement at all times. This will ensure that managers invest in grooming people below them through information sharing, knowledge transfer, and delegation of power. This will result in a cascading effect that will ensure that the entire organization at all levels is well informed, knowledgeable, competent, and on top of the situation.

Secluded CEO or Effervescent CEO?

2006-10-08T13:59:00.000+05:30

Where should the CEOs reside – in their cushy corner offices or in the thick of the corporate action? Traditionally, CEOs are considered those thick skinned gentlemen (pun intended) who are hard nosed and meet only their key people and make public appearance to the ordinary employees once or twice a year. It worked in past. But it may not work now and in future. The reason is simple: Business has become complex and getting more complex by the day.

The problem arises in the corner office, selective audience approach because the CEO loses touch with the entire organization. Often this results in CEO becoming unaware of the ground realities. With selective audience approach, the CEO gets selective information about the organization, often filtered through the eyes and intentions of his right hand men, which is of course not a healthy sign.

Another issue that comes up with this sacrosanct corner office approach is that devoid of the understanding of ground realities, the CEO often demands something in good intention which turns out to be a productivity killer and distraction for the people. The right hand men, often to remain in the good books of the CEO, never protest even if what CEO is demanding in impractical, useless, and wastage of time. This entire thing often results in a confused organization where the people at the frontline are clueless about what is happening and why. And the organization keeps dancing to the whims and fancies of a CEO and real business issues are relegated down the order.

Ultimately what this corner office, selective audience CEO does is harm the future of his organization.

In current times, I don’t think any organization would excel if the CEO keeps himself away from his people. In fact, he can’t afford that. All the people in the present day organizations are intelligent people who have ideas, problems, solutions, questions, etc. Being the leader of his people, the CEO is expected to keep himself abreast of what is brewing in the organization. He has to open channels of communication, possibly with technological interventions, which ensure that each and every employee finds him accessible. Moreover, the CEO needs to have significant face time with his people through personal interaction in cafeteria, parties, get-togethers, video conferencing, meetings, talks, etc. The people must relate to the CEO and must feel that he is one of them and not some kind of a demigod who often acts like a devil.

And mind it, this is not micro managing. It’s more about letting the people run the show and deeply empathizing with them and guiding them through the organizational goals. It’s what I call “bear hug leadership”, a style of leadership where the entire organization emotionally bonds with the leader and his organizational agenda. And there cannot be a better way than “bear hug leadership” to effectively communicate the leader’s vision and agenda throughout the breadth of the organization – from his right hand men to the guy at the shop floor or in the market place.

When will the CEOs learn empathy management?

Some Musings on Indians and Fast Food

2006-10-01T23:09:00.000+05:30

A few days back, I was having lunch with some friends at Pizza Hut. While my friends were busy deciding what to order, my eyes decided to scan the buzzing restaurant. A rough mental calculation showed that around 50% of the customers present were chirpy college goers (either dating or just killing time), 35% were executives who had dropped for a quick bite, and balance 15% were general junta who had come to enjoy the once in a while outside food or to enjoy a birthday treat or something like that. Well, this was at 1 PM and the composition might have changed drastically in the evening hours.

But I was not at all concerned about composition. I was wondering why we Indians madly run behind these Mcdonald, Pizza Hut, Subway, and the ilk. What is so special about them? Why not the same rush and enthusiasm for our desi food stuffs? Why no organized peddling of our desi khana in India and abroad. And why the entire world can have a chain of thousands of outlets of Mcdonald and Pizza Hut and not even a single international chain of desi khana like samosa, chola bhatura, litti, vada pao, idli, dosa, uttapam, etc.?

After a little mental gymnastics and some soul searching I realized that there are essentially two reasons for this:

We Indians have a subconscious intimate love for anything from the land of goras (read America and Europe).

We Indians still lack the critical mass of entrepreneurship required to establish Internation food chains like Mcdonald, Pizza Hut, Dominos, etc.

The next question that popped up was: WHY?

Why we have a soft corner for Made in USA and Made in Europe? To me it seems that subconsciously the urban Indian is dictated by the western way of living. So anything the west does, becomes fashionable and worth showing off in public. So eating Pizzas, Burgers, and drinking Coke and Pepsi becomes de rigueur while eating samosa and drinking nimbu paani is considered not so cool. It has more to do with the mental conditioning that west represents richness and aping the west will give me an outward expression of richness. It’s more about feel good factors and display of one’s westernized self. Similar logic explains the seemingly absurd westernized spoken English of some ostentatious youth in the super metros. And similar logic explains why the Omkara type curse words are considered filthy and derogatory while the western equivalent of the same is rampant and publicly displayed by the ultra westernized youth of today. So it’s cool to use F*** as an exclamation in every sentence one speaks but it’s so derogatory and uncivilized to use the Indian equivalent of the same. I don’t understand why this double standard; a curse word in any language is after all a curse word. Do we, urban Indians, wear some kind of mask?

Now coming back to the original issue, why is it that we lack globally scalable entrepreneurship particularly in the ready-to-eat segment? Because we are still naukri seeking people. In the Indian society, if you say you are an entrepreneur, people assume that you didn’t find a decent job so you are doing small time business. Moreover, for ethnic food items people who set up shops are basically thinking of running a family and sustaining the grind of life. The daily drudgery is perhaps so overpowering that hardly anyone thinks of exploring national or global expansion. These joints get confined to a city or a region and build a reputation good enough to flourish where they operate. But the primary reason for lack of scaling up of the ethnic foods is the typical mentality majority of us have regarding entrepreneurship. Entrepreneurship doesn’t generate as much respect as an IIT, IIM, IAS, AIIMS type pedigree generates. As a result, young people who may have the ability to turn these ethnic foods into globally scalable businesses are doing their 9 to 6 jobs and happy with a cushy salary that gets deposited in their bank account every month.

So, if you want to see Samosa King in New York or London or Melbourne or Paris just like the ubiquitous Mcdonald then start promoting,

Supreme love for Indian culture, language, food, attire. In short, promote anything that is Indian.

Entrepreneurship and view entrepreneurs with same respect that you bestow on engineers, doctors, IAS officials, economists, professors, and any other respectful profession.

An Imminent Paradigm Shift of Business

2006-09-29T23:28:00.000+05:30

Prof. Madhukar Shukla of XLRI has written an interesting post on Why Business will move "Beyond Business". He extends the idea of "socially oriented capitalism" that I discussed in my post "Future of Business: Socially Oriented Capitalism".

Professor Shukla points to some recent developments and highlights some facts and figures that point to the imminent paradigm shift of business perspective from business alone to one that encompasses business and society in equal measures.

Questions Every Marketer Should Ask

2006-09-23T19:38:00.000+05:30

Some questions marketers should ask to survive in today’s ever changing marketing landscape:

Am I driving the industry or the industry is driving me?

Where will my industry be 2 years down the line? (Anything longer is too difficult to predict in today's nano-technology world.)

How is my brand making a difference to my customer's life?

What is my brand's heart share of customer?

Can I measure customer delight?

What if my product/ service becomes obsolete overnight?

What story am I telling?

What am I doing to hook future customers?

Is my brand over shadowed by my advertising?

Am I aware of all the moments of truth that my customer can have? How am I managing them?

How is my brand making a difference to the world?

Does my portfolio have shock absorbers?

What my customers are telling me?

Who are my potential competitors?

How am I bringing my customer closer to my brand?

How am I protecting my brand from any possible commoditization of the category?

What am I doing to keep my brand relevant in my customer's life?

What is my brand’s customer attrition rate and resulting cost?

How often does my customer involuntarily says to my brand, 'thank you for making my life easier'?

Does my customer consider my brand as one of her family members?

Nuggets of Management Wisdom #5

2006-09-22T23:53:00.000+05:30

Never try to manage your people; always lead them.

There is difference between human resources and material resources. Material resources are made of nuts, bolts, or micro-chips, but human resources are made of intellect and emotions. Managing creatures of emotions is virtually impossible. They have to be led in the direction you want them to take.

The human nature is such that in its natural state it abhors any kind of management from external sources. It has to be internally managed and that is possible only if outside leadership manipulates emotions and facilitates the inner self management.

So lead your people; and manage everything else.

Future of Business: Socially Oriented Capitalism

2006-09-17T22:03:00.000+05:30

Times are changing and so are the rules of business. Generation of steady profit and keeping the shareholders happy is no longer the start and the end of the purpose of business. Increasingly, social factor is coming into play. Some view this phenomenon an advent of corporate citizenship and corporate social responsibility (CSR) while others term it as corporate philanthropy. But this trend towards integration of social factor with purpose of business is much broader than corporate citizenship and corporate philanthropy. I prefer calling this trend a move towards "socially oriented capitalism", the only sustainable way of doing business in the long run.

Perhaps time has come for businesses to realize that they cannot exist in isolation of society at large. In coming years, survival and sustenance of businesses will be dependent on how well they empathize with the society and their surroundings. Striking an optimal balance between wealth generation for shareholders, betterment of the society at large, and judicious and sustainable use of natural capital will be the essence of doing business in future.

The problem perhaps lies in the current paradigm of doing business. The current paradigm focuses predominantly on a single parameter – maximization of shareholder’s wealth. In pursuit of this goal, often the business becomes short-sighted and neglects the long term scenarios. The present paradigm follows what Milton Friedmen advocated when he said, “The business of business is business”. But fortunately or unfortunately, this concept of business is soon going to be obsolete and unsustainable. The reason is simple. Single minded pursuit of wealth generation for shareholders often entails ruthless exploitation of natural capital as well as concentration of wealth in a few hands which is detrimental to social inclusiveness. Ruthless exploitation of natural capital means faster depletion of natural resources than its renewal leading to ever decreasing availability of resources for increasingly demanding population. Similarly, concentration of wealth in a few hands prevents diffusion of wealth, a prerequisite for holistic social development.

Tomorrow’s star businesses will be those who proactively make society a business partner. Corporate social responsibility and corporate philanthropy may not do as much good to business as entering into a social partnership with society will.

I feel following are some of the behaviours that will drive the success and sustainability of corporations in coming years:

Society as a shareholder: Time has perhaps come to view society as a shareholder – someone whose interests are at stake and expectation of some economic return is there. The concept of giving back to society must change to sharing the profits with the society just as profits are shared with a shareholder. This sharing should be in the form of proactive investment in well being of the society to make it robust and strong so that the society can invest more in the corporation and a cycle of constant synergistic interaction is there between corporation and the society.

Society as a limitless consumer: The world is a pyramid and currently only the top of the pyramid is considered as a market by corporations. The rest of the pyramid remains like a non-entity for the corporations around the world. And this is based on the assumption that this large segment has no purchasing power hence making them a non-market. This assumption is flawed and this will have to be changed if corporations want to be alive and sustain their growth. For succeeding in future, corporations will have to focus on these markets which seem to have no purchasing power when seen from naked eyes, but which have immense potential as a huge market if seen from third eye. Perhaps, the philosophy of Henry Ford, who raised the salary of his employees to sell his cars, is needed. For tapping into the bottomless market represented by the poverty stricken mass, you need to invest in them, develop them, educate them, help them generate wealth and thereby turn them into a lucrative market.

Corporation as a catalyst for social inclusiveness: More than providing purchasing power, multi-dimensional transformation of the underprivileged society is needed. Apart from money, one needs identity, respect, social standing, love, and belongingness. By some quirk of fate, these are missing from the lives of underprivileged who form the bulk of society. Social inclusiveness is concerned with these softer but vital issues. The corporations of tomorrow will have to address these and act as a catalyst for social inclusiveness. It will be the emotional glue that will bind the corporations with the society to ensure a symbiotic relationship and coexistence.

Ultimately it is a one world. Corporation and society cannot exist separately. For sustained prosperity they have to enter wedlock and live happy ever after!

Dining Halls, Toilets, and Corporate Casteism

2006-09-14T22:31:00.000+05:30

Whenever I see two dining halls in any office I wonder why there is a need for two dining halls – one for lower mortals and the other for directors, presidents, and vice-presidents. And I completely lose my sense when I see separate toilets for managers and other staff. Really confusing! Isn’t it corporate casteism?

Why this bias? Why cannot all eat in one dining hall? Why this boundary? Or is it the myth of power lunch? Whatever it is I don’t care because this sounds dumb to me. Just imagine how many opportunities these hot shot guys are missing by not breaking bread with the ordinary mortals – the life and blood of any organization. They already lead a secluded life in their corner office away from the grim and dirt of the battle front. And now they are forsaking golden opportunities to be in touch with the corporate infantry by deciding to break bread in yet another corner dining hall. Breaking bread and mingling with the ordinary mortals of their organization would have meant opportunity to know more about the people who work for them. It would have given them some great insights on how employees are feeling, what gossip is the flavour of the week, what are the problems of their people, and how to motivate and engage the people more. Sadly, very few top executives break the bread with their people in one common dining hall.

And if this is not enough, some organizations practice corporate casteism to the extreme by having separate toilets for managers/ top executives and another one for rest of the lowly mortals in the organization. I don’t understand why it has to be so. Or is it that they are promoting the concept of power pissing!!

Things can become pretty bizarre in corporate world. Really!

Turf War: An Organizational Evil

2006-09-10T23:43:00.000+05:30

One of the key ingredients of the GE script directed by legendary Jack Welch was the concept of boundarylessness. He declared that turf wars within the organization needed to be treated on par with grave organizational crimes like leaking company secrets. This strategy worked wonders for GE because turf wars are typical bottlenecks within an organization that immobilize the entire organization.

Despite the success achieved by GE and other companies from removing turfism, a large number of companies are yet to learn and imbibe this simple yet profound strategy. Numerous organizations today are suffering from the cancer of internal turf wars and are performing below potential. All these despite a rich organizational vocabulary of teamwork and collaboration!

Functional priorities still command great deal of attention. As a result, suboptimization becomes a fairly common sight. Functions get optimized while the entire system becomes suboptimized bringing friction and inefficiency in the system.

There are perhaps three reasons why turf wars are so widely prevalent in organizations despite many earnest attempts by the leadership to minimize them.

Leader's inability or failure to immaculately weave the organization around a broad agenda.

Lack of metrics to measure performance on collaborative results.

Lack of metrics to measure the cost of turf wars.

Unless there is a concept of ‘one organization, one goal’, functional barriers cannot be removed. Very often it is seen that every department/ function has its own goals which at many times conflict with the organizational goals. For example, it is often seen that purchase department tries to reduce cost of raw material and end up purchasing slightly inferior material which results in compromise with quality delivered to customer. Similarly, it can be changing suppliers for minimizing cost and compromising timely availability of raw material resulting in erratic supply chain. On a similar note, operation can engage cheapest transporters with scant regard for proper stacking on trucks resulting in damaged goods. All these are cases of functional optimization but suboptimization of the system.

Here the role of the leader becomes vital. He has to ensure that each and every employee of the organization thinks of the organization goals and the role they are supposed to play in it. It needs simple and clear communication of the organizational goals. Perhaps a story telling leader can be more effective in ensuring that the concept of ‘one organization, one goal’ is absorbed across the organization. A constant reinforcement of this theme can go a long way in making people rise above functional affiliations to organizational affiliations. A better analogy will be to make Indians rise above regional affiliations like Bihari, Bengali, Gujarati, Tamil, etc. and think of themselves as Indian first and anything else second.

Next step is design of right metrics to measure level of optimization of the system. The prevalent metrics that measure the optimization of the function rather than system has to go. Currently, performance of people is measured on how well they are meeting functional goals thereby increasing the tendency of the people to view functional goals at the top of the priority list. But business is more of a process. Individual performance needs to be measured in terms of the performance of the system/process. So if a process has players from marketing, sales, finance, and supply chain then individual performance should not be based on functional part of the process. Collective responsibility rather than individual responsibility is needed. So if the process fails to deliver, none can play blame game. Also, it will ensure that people become more concerned with getting things done rather than just doing their part.

Another metric that I feel is needed is the metric to measure the cost of optimization of functions and suboptimization of the system. Unless there is a way to quantitatively and unambiguously measure the associated cost of functional focus, it will be difficult to rally the entire organization around organizational goals.

In the end, it has to be a culture of ‘one for all and all for one’.

Are Typical HR Guys Ready For Strategic Roles?

2006-09-02T22:25:00.000+05:30

Sometimes I wonder what the HR guys are up to. There are big talks these days about the strategic role HR has to play. But do the HR guys really know enough of operational and business issues to play a real strategic role?

A few days back I was attending a high level cross functional meeting. The discussion drifted to an issue involving improvement of order processing at depots. The HR guy readily came up with a solution that seemed theoretically perfect. But for anyone who has been to depot and witnessed how orders are processed, the solution would seem impractical and devoid of commonsense. No surprise that the top guy of supply chain present at the meeting promptly brought sense to this HR guy. This is not an isolated case. These kinds of things happen too frequently.

The problem with HR is that it is too self centered. It views things from an HR perspective rather than a business perspective. It often fails to see the big picture and lacks a deep understanding of business.

Before HR guys can play strategic role, they need to become more market savvy. They need to understand their customer and her needs - what she wants and what she doesn't - well before they formulate an idea and sell it to her. Just peddling ideas generated by their own myopic understanding will do no good to either the organization or themselves. An example: The HR comes up with a training program for frontline sales personnel. The vice president of sales, someone well aware of ground realities and way things happen at ground zero, goes through it and frowns and then wonders how that would help his boys. No wonder so many training programs fail to get desired results!

So if HR really wants to find a place under the strategy roof, then it should focus on the following:

Learn the business first; think about HR later.

Frequently visit market place, shop floors, R&D laboratory, packaging development labs, IT guys’ terminals, and bean counter’s den. Learn how things move in the organization.

Customize theories into practical solutions based on the insights gathered through frequent interaction within and outside the organization.

Think business, think leadership, think of the big picture and how you can help fit the different pieces of puzzles to reach that big picture.

Learn to ask “what if” type questions frequently.

Hey, the typical HR guy, awake, arise, and move fast up the strategic ladder before big time trouble starts. Time is running out!

Economic Cost of Human Resources

2006-09-01T22:59:00.000+05:30

How many managers understand the economic cost of human resources at their disposal? Perhaps very few. Some managers just don't understand allocation of work based on economic cost of human resource and scope for value addition. It's basically a mismanagement of cost – payoff equation.

The result of this mismanagement is an organization saddled with non-value adding activities, poor productivity, and chaos all around. People who are paid big bucks and are supposed to be spending 80% of their time on value adding activities end up spending 60% of their time on non-value adding activities. So the real things that are supposed to be driving an organization end up being the victims of managerial myopia. The managers simply fail to manage the non-value adding activities in the most efficient and cost-effective way.

As far as my understanding is concerned, there are only three ways to manage non-value adding activities. Any one or combination can do the job.

Automate – The best solution to free your organization from the tyranny of non-value adding activities is to automate the activities. With the flooding of sophisticated technology these days, almost 70-80% of non-value adding activities can be taken care of through automation.

Outsource – This is the next best way to plug the seepage of productivity due to burden of non-value adding activities. Majority of the non-value adding activity remaining unresolved by automation can be effectively tackled by outsourcing. Definitely it is a cost effective solution.

Put the most efficient hand in action – Not every non-value adding activity can be handled by automation and/or outsourcing. In any organization some non-value adding activities will still need to be taken care of by human beings. Automation and outsourcing can ensure that proportion of such activities requiring direct human interface does not exceed 5-10% of all non-value adding activities in an organization. In such cases which require human expertise, it is better to find adept and skillful hands that can efficiently do the job. Efficiency is the guiding principle here. A great doctor cannot be a great nurse and a great nurse cannot be a great doctor. Similar is the situation in business and organizations. Some people are experts in doing non-value adding work who cannot excel in value adding work. Find those people or if need be hire them and set them in action to take care of the non-value adding work that can neither be automated nor outsourced. But for Heaven’s sake don’t saddle people who are supposed to be concerned with value addition with non-value adding activities. It is a crime to ask someone who can add value multiple times to do something that is not at all adding any value.

Managers need to give some serious thought to ineffective utilization of human resources at their disposal. It would go a long way in ensuring that limited human resources are put to best use based on their expertise, and maximum value is created for an organization.

Loo, Labour Pains, and Sales

2006-08-23T22:45:00.000+05:30

What's common between loo, labour pains, and sales?

…PRESSURE.

While sharing a drive from office to home, I and a colleague were discussing some issues of sales management. At one point he said that his boss in his previous organization used to say that everything moved because of PRESSURE. My colleague further said that his ex-boss supported his theory of pressure by saying that in loo you would not be able to deliver without adequate pressure; a woman undergoing labour pains would not be able to deliver a baby without adequate pressure; and a sales guy would not be able to deliver optimal sales without adequate pressure. How true, yet so simple!

No pressure, no movement!

So all you guys and gals in sales get on your phone and apply some pressure on the keypad to dial the number of your sales reps and then apply some pressure on your tongues to deliver a pressure tirade to them so that they feel adequate pressure and deliver optimal sales. Hurry, only a week left in month closing!

Marketing To Indian Women

2006-08-19T23:24:00.000+05:30

Marketing to Indian women – easy or tough? Well, it depends on how much one knows about the mental chemistry of Indian women. Marketing to Indian women is something of a magical art that has made or unmade many a career and company. If it works, it rains prosperity; if it fails, it brings misfortune. Frankly, it is a tough subject where one gets better with practice and patience. Here I have tried to formulate some simple rules of marketing to Indian women based on a few years of keen observation, experience, patience, and relentless pursuit of this esoteric art.

Build warmth and trust first, sell later.

Never throw all your cards at one go. Women love constant surprises. Small bites are preferable to a mouthful.

Never fall in love with her. Let her fall in love with you. When she falls in love with you, she commits her mind, heart, and soul to the relationship and that's great news for any marketer. If you fall in love and she is hesitant, there are troubles ahead.

Be patient. Let her tell you what she wants. Never guess what she wants. Trust me; a woman's mind is too complex for even a genius to unravel. Better option is to let them tell you. So facilitate the flow.

No two women are same just as no two finger-prints are same. So stereotyping is fraught with danger. It is better to keep this truth at the back of the mind, always. Men will be men and majority of them will fit into one type or the other. But women are special creatures of God. Perhaps God hand crafted each woman while produced men at assembly line!

Respect her. Don't fool around with her. Acknowledge her as an intelligent, loving, and caring individual.

Emotions play an important role in her decisions. She is a bundle of immense emotional energy. Subtly play around it to your advantage without beating the drum about women being creatures of emotions. No woman loves being called a bundle of emotions. In fact, she hates it.

Be chivalrous. Majority of women love chivalry. Behave like a gentleman whom she can take home to meet her mother.

Speak less, listen more. Let women take charge of talking. They really know how to talk and love doing it. And the best part is that they frequently tell way too many things that a seasoned marketer is always looking for. So, look into her eyes, put a genuine smile on your face, and listen actively as she talks.

Make her feel important, important, and important.

10 Signs Of Future Trouble For Business Organizations

2006-08-18T23:04:00.000+05:30

Here are 10 non-financial signs that I feel are indicators of some future troubles for any business organization:

Immediate bosses are disregarded and subordinates frequently jump levels for guidance on operational issues. And no body is bothered by this!

Meetings are badly conducted, are never ending, and don't reach any conclusion.

Analysis till the last detail but extremely poor implementation becomes a norm. In other words, analysis rather than action becomes the end of everything.

Rationalization rather than confrontation of the issues and realities becomes the order of the day even at higher echelons of management.

Servility rather than professionalism becomes the rule of the day.

Highest disregard for time of self and others becomes an open secret.

Personal agenda starts getting priority over organizational or business agenda.

Promotions become dependent on subjective rather than objective criteria.

Average stay of employees hired from other organizations starts declining.

E-mails remain unanswered by majority of employees.

Growth: A Mind Game

2006-08-12T23:23:00.000+05:30

Often I see some leaders and managers balking at the prospect of setting and chasing high growth targets. Very often ‘impossible’ is the word that comes on the tongue when high growth targets are mentioned. Perhaps the reason behind this is reference points. They often take last year’s patterns, or recent trends, or the obvious opportunities visible with naked eyes as the reference point. I refer to this phenomenon as “demand servicing” mentality.

But I feel that growth is a mind game. What is needed is a mind set of “demand creation” rather than a pure “demand servicing”. Of course, “demand servicing” is equally important for accelerated growth, the point is that it should not be the starting point. The starting point should be “demand creation” followed by putting up an excellent “demand servicing” mechanism in place.

The situation is particularly tricky in organizations which are at a fairly mature stage of their life cycle. In such cases, there is greater resistance to any talk of higher growth targets. But it does not mean that there is no scope for higher growth. Many people in such organizations cannot simply comprehend growing at a higher rate than the accepted rate of growth because the only thing they see is saturation. They feel whatever demand there is they are effectively servicing it and hence it is not possible for them to grow faster. They don’t give much thought to how to create new demand. Perhaps they are mentally too lazy to think innovatively and out-of-the-box. The point is that if we see and analyze the situation from an obvious perspective we will miss many hidden things.

And this mentality prevailing in the minds of many leaders and managers is responsible for slow growth of many organizations. So an organization might be growing by 12% and conventional wisdom will say that it is a good growth for that particular company. But it might be possible that this company is underperforming and it should be growing by 25%. Well, for this to happen unconventional thinking will be required that challenges the current assumptions, many of which might turn out to be false.

The Hullabaloo: Pesticide in Cola

2006-08-11T23:07:00.000+05:30

The pesticide monster is again rearing its head in front of Coca Cola and Pepsi. Since last few days I am witnessing hullabaloo about pesticide level being much more than prescribed level. So much so that many state governments banned the aerated drinks in schools, colleges, hospitals, and government canteens. An over zealous state with a communist government inflicted a blanket ban on production, distribution, and consumption of the fuzzy drink. Poor cola guys!

Well, to put it frankly the entire drama seems ludicrous to me. Not because I am some kind of a parasite who hates public health and well being, but because the whole thing smells of rat and appears childish.

First and the foremost, all this bashing and banning game is happening just because an NGO (Center for Science and Environment) did some tests and found the pesticide level higher than prescribed norms. How can I be sure that this NGO is not under the influence of some powerful anti-MNC lobby? Why should I believe that this Center for Science and Environment is a saint amid scoundrels? What about government tests? Has the various state governments conducted scientific tests to determine the pesticide level in the Coke and Pepsi circulating in their states?

Second, is the prescribed norm too little and impractical considering the Indian environmental practices? How many other food items and beverages have we tested for pesticides and what have been the results? I hear from some credible sources that the vegetables we eat have abnormal level of pesticide relative to the norms. Is it correct or just hearsay? Well, I would like the government and scientific institutions to do a pesticide test for the following items:

Sugarcane juice hawked on roadside stalls.

Various brands of bottled water available – both better known brands as well as Ganga, Yamuna, Saraswati types found in smaller towns and cities.

Vegetables from various mandis.

Ice-creams – both branded and unbranded.

Drinking water available at various taps on railway station – yes I am talking about sheetal jal.

Tea from various roadside stalls.

Drinking water available in various hotels – both big ones and small ones.

Nimbu paani available on the streets of Delhi and Kolkata.

Paani poori from road side stalls.

If the government heeds to my advice and tests the above mentioned items for pesticides, I am sure 75% of food and beverages will fail the tests as per existing norms and will be banned in India. Then what will we eat and drink? And that raises two important questions – Are we not taking enough care of our environment that pesticide and other such substances are seeping in virtually everything we eat and drink? Or, is our contamination norms too rigid considering Indian scenario?

By the way, I just noticed a wired logic on Center for Science and Environment website. On one of the articles on pesticide in colas, there is a question: Why the ‘apples have more pesticides’ chant of cola companies is dead wrong? The CSE answers this query in the following way:

You can't take the pesticides out of apples. But you can clean up colas….Fruits and vegetables have nutrition. They give us something in this poison-nutrition trade-off. We get nothing with colas. Just pesticides.

Great logic I must say. So if you can’t take out poison from apple then no harm in eating it. And if you have some nutritional intake then it doesn’t matter if you eat poison because poison by some miracle will be neutralized by the nutrients. Amazing! What will CSE say if I tell them that I drink a lot of cola and then eat a lot of nutritious food (rice, wheat, pulses, vegetables, fruits, juices, and milk). Will it not neutralize the impact of miniscule traces of pesticide in my cola?

By the way how are various state governments and central government faring on the goal of providing safe drinking water to all Indians?

There might be one more secret behind this pesticide drama. Is this selective and asymmetric play of pesticide in cola issue a handiwork of communists and Swadesi Bachao Aandolan, who are always on the look out for ways to embarrass, harass, and harm multi national companies? Considering their antecedents, this seems a likely cause. The promptness with which Kerala government acted in banning the production and sale of cola from their state gives credence to this theory. But if this is the case, and Indian government silently keeps watching, then something is really wrong with Indian government and its policies. All the talk of India as an exciting business destination and a land of future opportunities will fall flat if the Indian government remains silent thereby shaking the confidence of the industry and investors.

Government of India owes an answer to India Incorporated. Hope it comes soon.

P.S. – I am not an advocator of drinking aerated drinks. Personally, I feel aerated drinks are harmful for general health, not because they have pesticides level higher than prescribed norms but because they promote obesity, are addictive, have no nutritional ingredients, and may become cause of severe health problems. I discourage people from excessive consumption of aerated drinks. The above post is in support of cola companies because they are being selectively and wrongfully targeted on pesticide issue, and this does not seem to be a good business policy of the government. In case, any cola or beverages company is found to be slack on quality control leading to public health concerns, then it ought to be dealt with severely.

Some related writings on this issue:

1. Cola Con on Indian Economy Blog by Arjun Swarup

2. I want my DDT by Gautam John

Cause of Consumer in the Internet Age

2006-08-09T16:16:00.000+05:30

Companies beware! Online community and blogosphere is watching you and your (mis)deeds. Increasingly, the adventures and misadventures of companies are being brought to light through the medium of internet. I feel a great movement of consumer protection is slowly gathering momentum with the potential to make or mar the prospects of many companies. The result could be a public relations nightmare for the guilty company.

Last week I happened to witness the naked public bathing of two companies – first a company which is part of one of the most admired business groups of India, and second a widely respected global company. To put it crystal clear, I am talking about Tata Indicom and British Airways.

A few days back, I received a forwarded mail from a friend with the subject “Beware of Tata Indicom (Suck more, Loot more)”. It consisted of the grievances of a customer who had applied for broadband connection. It consisted of attachment of all the communication made with the company officials in an effort to get an amicable solution. And it contained every bit of details of the nightmare. The mail had even the email ids of the company officials and there was a request at the end to forward it to friends to save many an Indian from the trauma being inflicted by Tata Indicom. Another request was there to put the email ids of company officials in the Cc field every time the mail was forwarded so that they can gauge the extent of damage being done to their reputation. The very next day, another customer at the receiving end of Tata Indicom replied to share his own plight. And I am sure this mail must have been forwarded to thousands of recipients by the forward lovers of email. As aptly put in the mail by someone, JRD Tata, the great visionary and founder of Tata group, must be turning in his grave.

I learned of the second story when I checked Atul’s blog yesterday. There is a great post on racism being perpetuated by some British Airways employees on flights as well as airports. Atul told a tale of an Indian lady and how she was humiliated on both in-bound and out-bound flight on British Airways. If it is true and gathers a critical mass of visibility on the internet and blogosphere, this issue can be a public relation nightmare for British Airways and may cost it big enough in terms of money and reputation.

Frankly speaking, this online lambasting of poor customer service is a good thing. If it gains momentum – I am sure it will – very soon companies will take notice of this phenomenon and strive hard to make their customer responsiveness and service world class. The motivating factor is simple – punishment is more painful than the pleasure of reward so it is better to avoid punishment.

This current trend of going online with all grievances against companies is going to make companies sit and take note. Complacency has no place in this networked world with free and super fast information. Either you are loved or you are hated but you cannot be left untouched. While this silent revolution is a boon for consumers, it is also likely to become a headache for companies. Companies now will have an additional front to manage to keep reputation intact.

Moreover, there is a dark side as well to this online lambasting of companies. It can also take the form of propaganda by people of malicious intent as well as dirty minded competitors. It is very likely that even good companies with excellent service get wrongly targeted and their names besmirched on internet and in blogosphere. How are companies going to ward this off? How are they going to manage the fallout of this kind of malicious propaganda? Companies will have to think of the ways to guard against any kind of false propaganda done against them.

One way out for companies who believe in excellence is to make their customer service transparent and online. This way everyone can see for themselves how good the company is on customer responsiveness and service front. Moreover, transparency and openness will ensure that propaganda of malicious people gets defeated at their own game. It will also act as builder and protector of company’s reputation as a caring company. But for that to happen, the company must first make its service and responsiveness world class and be confident of its abilities to deliver consistently. Otherwise it would be a bigger disaster if it is caught on wrong foot. Well, it is a double edged sword! And of course, it is not for smug companies who stay in the cocoon with their grand illusions of invincibility.

It's high time now for companies to give up their imperialistic attitudes and wake up to the new age realities.

Mr. Sales and Mrs. Marketing

2006-08-08T23:36:00.000+05:30

Love-hate relationship between sales guys and marketing guys is perhaps as old as the existence of the corporation itself. But I am wondering something else. Is the relationship between Sales and Marketing more like a relationship between a husband and a wife? I feel it is. Hence, here is my little story about Mr. Sales and Mrs. Marketing that tries to interpret the inner wiring of this vital relationship. (Disclaimer: Without any ill will towards either sales or marketing. So take it easy!)

Mrs. Marketing, just like an over aggressive wife, keeps ranting about how little money Mr. Sales is bringing these days to home. She keeps saying it’s so tough to manage the affairs of the home with such a paltry sum. And Mr. Sales, already saddled with responsibilities and stress of his demanding job, keeps on telling Mrs. Marketing that money doesn’t grow on trees and making money and bringing them home is a tough job that she perhaps doesn’t understand well. Annoyed with Mr. Sales’ arrogant answer, Mrs. Marketing asks him to tell her what exactly he does all day. She says that may be if he tells her every detail of his work then she could give some constructive inputs to make some more money. This infuriates Mr. Sales so much that he blurts, “Honey, it’s fine to tell you what I do and how I earn and I am very much willing to tell you. But I am sure you don’t need a simple answer. What you are interested in is all the details of what I do day in and day out, even the minutest and mundane details. And I am afraid I cannot tell all these details day after day else I will be left with no time to earn the money to satiate your endless hunger.”

So it is fundamentally a situation of an ever nagging wife (at times loving too) and an annoyed husband who between them pack a lot of love amid a mountain load of bickering. And the eternal love-hate relationship of a charming couple continues…

Nuggets of Management Wisdom #4

2006-08-06T22:58:00.000+05:30

Excellent technology and systems cannot be substitutes for poor quality of people.

There is a perception in minds of some managers as well as leaders that great technology can act as a substitute for poor quality of human resources. They think that if they can put a great technology in place then no matter how inadequate the quality of their people is, it can take care of all ills plaguing the company. It is sad that they don't understand that even super computer, or for that matter any other sophisticated technology, requires a fairly qualified human to run it. Technology doesn't work in a vacuum. Technology can play a complementary role or at best it can be an integrator.

On the other hand, if you can put together a great team of qualified people, you can be assured that your business will not be ruined even in the absence of great technology. These qualified people can decide what is necessary and important for an organization and accordingly decide the best and the most innovative way to get it with the limited resources at their disposal.

It sounds like commonsense but unfortunately in business, like other spheres of life, commonsense is not so common.

Spider-web Reporting Structure

2006-07-29T21:10:00.000+05:30

The reporting structure of an organization has a direct bearing on the productivity and effectiveness of its employees as well as the entire system. Any design flaw on this front is not only expensive but also detrimental to the health of the organization. The reporting structure is fundamentally a network within an organization, very much like the network of veins and arteries in our body. This network within an organization has a task to ensure sustained flow of "organizational oxygen" carrying blood – information, accountability, and authority. Extreme care has to be taken to determine the points where they merge, points from where they emerge, and the direction in which they flow. Like any high performance network, this organizational network has to be optimized for superb performance with laser sharp precision.

But how many organizations understand the value of their reporting structure? And how many of those who understand the value of their reporting structure go out of their way to make sure that their network is optimized? I think very few of them. While it is fairly common to hear high sounding rant of top level managers and leaders about organizational re-design and need for flat structures, in reality something else is practiced.

Serendipitously, with some good luck, or perhaps bad luck, I have discovered the worst kind of reporting structure that I will call “Spider-web reporting structure”. In this “Spider-web reporting structure”, organization has a network in practice that resembles a typical spider’s web, even though in policy documents it might be engraved that “the organization understands the need for a flatter organization to increase effectiveness and ensure better internal communication, and continuously strives to reduce the number of layers in the corporate hierarchy”.

Given below are some of the typical features of a Spider-web reporting structure:

Even though in organization’s manual, it is clearly defined who reports to whom, in practice, instead of following the standard reporting structure immediate bosses and super bosses are frequently bypassed and find to their surprise that they are not in loop on many affairs of organization for which they are accountable.

There is a strong power center, sometimes two power centers, who controls (or tries to control) the entire affairs of the organization including minutest and the most trivial of things. And this power center(s) even dictates the appraisal of people who are 5 levels below them. So you can expect a VP to write the appraisal of an officer! (Well, don’t think this is a figment of my diabolic imagination. I have seen this with my naked eyes.)

Utter chaos prevails. No body understands what authority he has and over whom.

Accountability is well defined for each employee even though they have very little authority and all the small guys are accountable for decisions taken by the power center(s) on their behalf and without their consent.

Sycophancy is rampant and unless someone is in the good books of the power center(s) he cannot expect to rise in the organization, irrespective of whether his immediate boss likes him or not, and whether he is an over-performer or an under-performer. Performance in these kinds of organizations is basically the perception of performance the power center(s) has based on his mental compatibility with the particular employee.

To sum up, in the Spider-web reporting structure, the spider(s) rules and all information converge to him without following a well defined path. Authority is a centralized feature and flows from him. He is quite stingy as far as delegation of authority is concerned. He decides how much authority flows to someone on his web. He can choke information as well as authority at any point of time at any place depending on his whims and fancy. Though he is accountable for the results, he generously delegates accountability throughout his web. If he doesn’t like someone, he can even kill or permanently disable that person on his web by pulling in the right strings from the center.

Practice of Spider-web reporting structure over a considerable length of time results in the following maladies:

High performance is overlooked resulting in steep decline in motivation of talented and performing employees.

Average performers with a place in the good books of the spider(s) enjoy themselves without bothering much for performance and get well fed and well paid.

Attrition of talent is high.

Organization performs at quarter of its potential. The organizational atmosphere stinks of inefficiency. Productivity takes a back seat and laid back attitude prevails.

A palpable divide is observed between talented though overlooked employees and average but pampered employees.

Huh! Utter waste of money, talent, and resources.

How Well Is Your Organization's VISION Understood?

2006-07-23T18:49:00.000+05:30

“Vision” is perhaps the most abused and beaten word in corporate world. Every organization has a grand vision and the irony is that hardly anyone in the organization understands what the vision is. Except a few exceptional cases, the vision of an organization is more like a designer necklace meant for display and the “wow” effect rather than for internalization. And this is the problem.

The root cause of this problem is lack of continuous communication. Things like vision are such that initial euphoria dies down soon if a system is not in place to reinforce it continuously. Sooner rather than later, employees forget all about vision and get back to their routine of worrying about their deadlines and meetings. Majority of employees, particularly at the lower and middle level, blissfully become unaware of their organization’s vision, the very thing that is supposed to guide their day to day conduct. So every desk prominently displays the organization’s vision that no body cares to read, understand, or emulate. The result is the dilution of the very purpose of the having a vision i.e. having a shared purpose and idea of focusing on the future.

At the same time, in the same corporate world, there are leaders who understand the value and importance of vision and take upon themselves to ensure that each and every employees of their organization understands, internalizes, and practices the vision of the organization. And they do not delegate this responsibility of communicating the vision to all employees. They take this responsibility of communicating the vision upon them and ensure that the entire organization is crystal clear on what the vision of the organization is and what role he has to play to realize that vision. They personally ensure that there is no scope of ambiguity on this front.

Legendary Jack Welch is said to have personally driven the communication of his vision to such an extent that had he called his managers at 3 o’clock in morning and asked them what the vision of GE was, they would have blurted the vision of GE verbatim in half sleep. That’s called communicating the vision so that everyone in the organization virtually eats, drinks, breaths, sleeps, and lives on vision.

What about your organization’s vision? Just randomly ask some of your employees to get an honest answer.

Technology in Business: Bites or Delights?

2006-07-22T23:54:00.000+05:30

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

- Bill Gates

Having seen the chaos created by application of technology to automate an inefficient operation, I can’t agree more with Mr. Gates.

It’s always better to make the operations efficient before investing in technology to enhance efficiency and effectiveness. Otherwise, technology if applied to the inefficient operation will lead to the proverbial “coconut in a monkey’s hand” kind of situation. The monkey cannot break open the hard outer cover of the coconut (well, he has no clue about how to break it open) and without that he cannot eat the tender and delicious fruit inside. And who knows, the monkey, in frustration by his inability to break open the outer shell and taste the inner fruit, may indulge in destructive activities like throwing the hard coconut at someone’s head and hurting him.

Business Today's B-School Ranking: Absurdity At Its Best

2006-07-15T23:43:00.000+05:30

In its July 16, 2006 issue, Business Today published its annual joke, the B-School ranking in India.

Seeing the ranking and reading the cover story outraged me so much that after reaching home the first thing I did was to mail a letter to editor of Business Today expressing by angst and displeasure at seeing the ranking. Well, I never expected Business Today to publish my letter as the words were really harsh. But now having confirmed in the latest issue that my letter on the said subject has not been published, I think it should be put on my blog for my esteemed readers. Here it is reproduced:

Dear Mr. Editor

Apropos the B-School ranking published in 16th July'06 issue. To put it very mildly, I am outraged after going through the rankings.

The first three positions seem fair enough but the story turns topsy-turvy there after. To see the name of Symbiosis ahead of three other IIMs, XLRI, FMS, SPJIMR, JBIMS, etc. is incomprehensible. But the most shocking bit is finding worst grade B-schools like IIPM Delhi at 11 th rank and IIPM Mumbai at 16th rank – way ahead of better known B-schools like IIM Khozikode, IMT Ghaziabad, MDI Gurgaon, NMIMS, XIM etc. And this is not the end. There are many Tom, Dick, & Harry type B-schools in your top 30 at fairly higher ranks at the expense of really good B-schools.

To anyone with even a vague idea of Indian B-school scene, this entire ranking seems hilarious. I don't understand why business magazines like yours put up a sorry figure year after year after release of these absurd rankings. I can fathom only two reasons for this absurd ranking – either your research team is incompetent and cannot put a decent research methodology, or perhaps you derive rankings even before doing your research!

Well, I would like to let you know one more thing. Every time you guys publish something as absurd as this current ranking, you lose a little bit of respect from readers like me who view (or perhaps viewed) your publication highly. We expect thorough professionalism from Business Today.

Secondly, please be responsible towards aspiring MBAs, many of whom rely on rankings published in magazines like yours to decide their career as well as future. Please practice responsible journalism.

Regards,
Mayank Krishna

What is the use of this kind of ranking that seems so biased and without any objective methodology? Not only it is bad in taste, it is misleading as well and might become responsible for spoiling many a promising career.

No surprises that Prof. Madhukar Shukla, faculty at XLRI, has given “F” grade to Business Today’s B-School ranking.

Nuggets of Management Wisdom #3

2006-07-13T22:34:00.000+05:30

Perception is reality even though it may not be reality.

This is one of the biggest paradoxes of life that I know. It will not be an exaggeration to say that our lives revolve around perceptions.

Perception is not an illusion. It is a mirror where people see what they want to see. It is as real as the reality itself.

Focusing on managing the perceptions of people around us might be the key to success in life and career.

India Story: Darkness More Than Light

2006-07-09T13:19:00.000+05:30

World Bank says that India is now the 12th wealthiest nation with a GDP of $785.47 billion or Rs 35,34,615 crore in 2005.

Contrast this news with the fact that nearly 380 million Indians live on less than a dollar a day! Huh, we are the 12th wealthiest nation and yet one-third of the Indians live on less than a dollar a day or an annual salary of less than $365!

A few days back, Pankaj Mishra wrote an insightful article for The New York Times entitled “The Myth of New India” (an edited version is available in today’s print edition of Hindustan Times).

Well, perhaps we are facing the biggest paradox of economic growth. On one hand, almost every one is talking about India being the next USA and 21st century being the century of India; on the other hand we have, perhaps, the biggest mass of poverty stricken population on the earth. On one side, our stock markets are shooting past stratosphere creating billions of investor wealth; on the other side, we have 2.5 million children dying every year of malnutrition and debt stricken farmers committing suicide (more than 100,000 farmers in India have committed suicide since 1993).

Is there something wrong with our developmental agenda? Perhaps, yes. Our current model of growth may not be able to bring a change for the better in the lives of majority of our people. With the current agenda, we can only help accumulation of private wealth in the hands of a select few to the detriment of the huge majority. At most we can have is a trickle down of wealth to the masses, not sufficient enough for bringing about the desired change. But the biggest gainers will be a select few whose wealth will grow exponentially while the income of common man will move on at arithmetic progression. Secondly, the current paradigm of growth cannot be sustained, at least in Indian context, with a billion stomachs to feed and limited natural/ manmade resources which are getting depleted faster than replenishment thanks to reckless consumption pattern of a small well to do minority.

So what’s the solution, or is there one at all? As far as my intellectual and thinking horizon permits, there is a solution, though quite radical. No, it is not about coming back to socialism or embracing communism. The solution perhaps lies in getting socialism married with capitalism! It is neither about corporate citizenship nor it is about social responsibility of business; it is about making society an equal business partner. It is about development of society hand-in-hand with the development of a business. The essence is to bring society on the platform of capitalism for betterment of the overall living standards of the society at large and at the same time get an access to a huge market, big enough to create capitalist behemoths, profit from it, and plough back a just proportion of the profit back to the development of society. If this kind of cycle can be created and maintained, then sustainable, win-win development for one and all will turn into a reality.

Perhaps the time has come to teach capitalism with a comprehensive course on sociology.

I will write more on this subject in coming days. Stay tuned in.

Writing Wisdom

2006-07-08T17:24:00.000+05:30

“A writer needs three things, experience, observation and imagination, any two of which, at times one of which, can supply the lack of the others.”

- William Faulkner, Nobel Prize winning novelist

How Well Do You Present Yourself And Your Work?

2006-07-06T23:51:00.000+05:30

Today I have come to realize that it is not the quality of your work that matters but how you present it to people who matter. As a rule, in life nothing is perfect or ideal. At best, anything can be close to ideal. So if you do something that has 90% perfection and 10% imperfection, then people will focus on 10% imperfection rather than 90% perfection if you don't know the exotic art of presenting yourself and your work. But someone with perfection to imperfection ratio of 70:30 and having the gift of shrewd presentation can make his superiors focus entirely on the 70% perfection without even letting anyone know about his imperfections. Not only this, people gifted in the art of presentation of their work are equally gifted to make their superiors focus on the imperfection part of their competitors and distracting them from their competitor's areas of perfection.

Of course, the effectiveness of this beautiful art is also dependent on the quality of superiors and their talent to ask probing and discerning questions from their subordinates. But despite this, in general, people gifted with art of presenting themselves and their work shine and enhance their power and influence. No doubt that they are foxy creatures. But who cares? Nobody except the victims of this unique creature.

Nuggets of Management Wisdom #2

2006-07-03T23:49:00.000+05:30

Over a period of time, individual effectiveness and productivity of employees tend to move towards the organizational average.

Corollary: Hiring intelligent, productive, and effective people raises the average effectiveness, productivity, and intelligence of organization while hiring mediocrity lowers the organizational average.

It has been long established that environment and surroundings mould attitude and behaviour of people. This is equally true in context of organizations. A vibrant organizational atmosphere inhabited by talented and effective employees raises the performance level of the least talented employees. On the other hand, an organizational atmosphere inhabited by predominantly mediocre people is bound to diminish the productivity, effectiveness as well as efficiency of the most talented employees.

So at individual level, keep an eye on the company you keep, and at organizational level, hire prudently.

Peter Drucker Speaks

2006-07-02T00:07:00.000+05:30

"No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under leadership composed of average human beings."

- Peter Drucker

Nuggets of Management Wisdom #1

2006-07-01T22:09:00.000+05:30

Corporate world has a selective memory. Individual success is soon forgotten while collective success lingers. Collective failures are soon forgotten while individual failures are part of elephantine memory.

Of course this is a generalized observation with some exceptions. There are a few enlightened organizations which have built culture of high risk taking, innovation, and viewing failures as stepping stone to success. In these organizations people are not judged by their success or failure but by their contribution to a greater cause.

Still it would be worthwhile to keep this management wisdom in mind while charting the rough waters of a corporate career.

Silent Voices of Your Employees

2006-06-30T23:00:00.000+05:30

How do you hear the silent voices of your employees? Employees often have their own view of their bosses, colleagues, policies, culture, day to day running of company. In fact, they have their opinion for almost everything going on in the organization. But these views and opinions are very often without a voice. These are not verbally expressed, except in close knit peer group with utmost confidentiality. But as with any human emotion, these do get reflected in the day to day behaviour of employees and many a times show in their work and the way they interact with colleagues and superiors at work. Most of the times what employees feel are mere personal opinions or even prejudices but sometimes their unspoken feelings tell an organizational story. This happens when personal opinions on certain issues become collective opinion and are felt by majority of employees. And these are the opinions which really have significance for an organization because these collective opinions may be a harbinger of hope or despair for an organization. So it will pay an organization well if it keeps its ears to its employee's heart.

Reading the silent voices of the employees can help an organization in many ways. Many a time, these can give subtle keys to what’s going on in the organization, how employees are relating to key people, whether majority of employees are getting annoyed with behaviour of a certain person, how employees feel about the new advertisement, how employees are feeling about new initiatives or policy changes, etc. Careful reading and interpretation can give enough ideas to management to constructively use these for furthering the cause of business and employee engagement, or to take timely remedial actions if things are going wrong somewhere.

But the question is how to tap into this immense sea of emotions and feelings of employees and channel them for the good of organization. I feel following measures might help organizations to decipher the silent voice of their employees:

Inculcate a value system where each and every employee irrespective of position and grade is treated with utmost respect.
Create an open and transparent culture where everyone can freely speak his mind without fear of reprimand.
Encourage top-down as well as bottom-up feedback. This means subordinates can give any kind of feedback to any of their superiors and the superiors can give feedback to any of their juniors. The only condition being that the feedback is neither taken personally nor is it used for personal attack. It should be used for constructive purposes and to understand each other better and reflect upon one's own behaviour and way of interaction.
Ensure that HR policies are aligned to the goal of making employees open up and that they encourage and reward open and heart-to-heart discussion among employees.
Install proper channels of communication throughout the organizational structure to ensure frank and frequent two way communication.

So next time you are practicing “management by walking around” keep your ears close to the heart of your employees. The trick is: observe, empathize, read, interpret, and act. But never judge people!

The Marketing Story

2006-06-23T23:21:00.000+05:30

Seth Godin says:

The most successful marketers tell two stories at the same time. A shiny one and a deep one.

The shiny story is easy to notice, easy to enjoy, easy to spread.

The deep story is fascinating, worth your time. It has texture and mystery and it lasts.

Profound marketing thought! One arrow, two birds! It means that you are connecting with your prospect or customer at both emotional and rational level.

Well David Ogilvy was definitely not a moron when he said, "Customer is not a moron. She is your wife". So, it would make sense if you find mental as well as emotional compatibility with you customers at the earliest (just the way you would with your wife). And what better way to do this than telling a two component story that simultaneously strikes a cord at head as well as heart of your prospect or customer.

High Attrition, Panic, and Stupidity

2006-06-19T23:00:00.000+05:30

What do you do when you are faced with high attrition rate of your talented employees? Simple, you start hiring mediocre. Surprised? Well, this is what an organization is doing of late without realizing “the axe on one’s own feet” effect it will create sooner than later.

Any body with an iota of organizational wisdom will feel that this approach is nothing sort of stupidity and any rationale organization would never take such a measure. As irrational as it may sound, I have come to a conclusion that nothing – intelligent or dumb – is impossible in organizations. When sanity gives way to insanity is hard to see, at least for insiders.

Coming to the policy of hiring mediocrity, this is nothing sort of an acute organizational myopia. As the events unfolded, this particular organization was seeing high churn of its talented people. High caliber professionals hired were not staying long. Well, the problem was three pronged.

First, the culture of the organization was a closed one with high centralization and decision making authority with only 2-3 top people. So, high caliber professionals were supposed to behave like pawns in the hands of under-qualified key decision makers. Indeed a tricky situation.

Second, the organization paid peanuts compared to other similar organizations.

Third, talented employees were not supposed to challenge their boss’ wisdom. It was considered to be a blasphemy to take an opposite stance.

So, it was not a surprise after all to see mass exodus of talent from this organization. But what really surprised me was the inclination they showed towards hiring mediocrity. Well, openly they would never say that they hire mediocrity. But there seems to be a tactic understanding within the circle of people who matter to hire mediocrity as they feel mediocrity tends to stick to their organization.

In this particular organization, the recent inclination towards mediocrity and hatred for talent is because of the following perceptions:

Mediocrity comes cheaper.
Mediocrity sticks because they don’t have many options.
Mediocrity doesn’t challenge the wisdom of his bosses.
Mediocrity has low aspirations and is less ambitious.
Decisions are after all in limited hands. So you need people who can do the dirty work for you.

But then this organization misses many points that might hurt it in days to come. It perhaps doesn’t realize that soon it will find itself in the following soups:

Leadership vacuum.
Zero bench strength.
Loss of productivity.
Decline in value addition at various levels as people tend to get struck with routine and mundane work.
Reduced risk taking ability and low initiative.
Decline in the sum total of organization’s IQ making it difficult for it to remain competitive and agile.
Rule of mediocrity.

In this new age of business, when leaders talk of competing on the strength of their people, the approach adopted by this particular organization seems to be self-defeating. But what can one do when a man is hell bent on destroying himself. God bless the organization!

Call of Society

2006-06-11T11:45:00.000+05:30

The Economic Times reports that "Now, corporate pros joining NGOs". It reports that percentage of people switching to social sector has doubled to 3% in last one year. The reasons being mentioned for this switch range from job satisfaction to a fulfilling lifestyle. Interesting thing is that people who are making the switch are well-qualified individuals from Ivy league engineering colleges and B-schools. Also, the switch to social sector is not confined to experienced people who have made their riches and now want to contribute their bit to social cause. Even freshly minted MBAs and other professionals are taking a shot at social sector. Here is the full story:

Young and the mid-aged pros in the corporate sector are quitting their high paying jobs and joining the NGOs. It’s a trend that has caught up in a big way in the last three to four years. In fact, the percentage of people switching over to the social sector has doubled to 3% in the last one year, according to head-hunters. The reasons for this are varied, ranging from job satisfaction to a fulfilling lifestyle.

Says Ronesh Puri, MD, Executive Access, “We receive calls from professionals who want to do something different and contribute to the society in their own way.” So who are the faces of this enterprising bunch?

Meet Shankar Venkateswaran, executive director, American India Foundation. After a BTech from IIT Madras, followed by a two year stint with Brooke Bond India, he got into IIM-C. A compulsory course in Indian Social System there got him interested in the social sector.

It came in handy when he finally joined in 1995 as chief executive in Partners in Change, a leading NGO promoted by Action Aid that deals with CSR. This was after working for 12 years in A. F. Ferguson from 1982 to 1994. He says, “Working in the social sector needs personal motivation. Pay packages are pathetic here, so you need to have that passion to work.”

While for Arun Grover, director, Jan Shikshan Sansthan Prayas, an initiative by Prayas, it was 25 years of professional life that made her yearn for self-fulfilment. She left Sidbi as deputy GM to finally join Prayas after doing a bit of social work in her neighbourhood.

There was still 15 years of service left. She says, “At this age and 25 years of professional life, you need something more than money. A feeling that you did something substantial and what better than working for the society.” Also a break from a mobile life, close to the family gave her immense satisfaction.

Joining them are the young entry level executives from the corporate sector for reasons similar to these. Nidhi Arora quit GE India in 2004 after a short stint of four and a half months, as financial management programme trainee to be one of the founders of Dhriiti, (an organisation that organises entrepreneurship and leadership programmes across rural and urban India).

An MBA from XIM, Bhubaneshwar, the young founder says, “At GE, I got a package of Rs 5.5 lakh per annum while here I get Rs 15,000 per month, a much less amount. I had realised pretty early in my career that money was not something I cared for. I wanted to be happy about what I do. Hence there was no point in wasting time.”

Romira Chatterjee, secretary, Seed, a one and a half year old Delhi based NGO, is no exception. She left Tata Power as a management trainee to join Youthreach, an NGO against social and ecological injustices to the poor in 2004 to finally join Seed.

My questions: why this sudden urge to quit corporate life and join social sector? What is the trigger? Is the corporate life becoming boring for a small percentage of professionals? Or has the corporate sector become one big rat race? Is corporate sector lacking in motivational factors for its professionals? Is this an individual phenomena based on individual conscience or is it a corporate phenomena where the system has become such that professionals are looking outward for job satisfaction and meaning in life?

My take: Corporate sector is increasingly taking the shape of Bollywood, where mainstream cinema and parallel cinema co-exists. Just as in Bollywood, glamourous Aishwarya Rai and Mallika Sehrawat co-exist with muse of intellectuals like Nandita Das and Konkana Sen Sharma, so do corporate inclined professionals co-exist with socially inclined professionals.

In near future, perhaps the trendy thing could be a marriage of corporate and social sectors with corporates increasingly becoming aware of their social surroundings and professionals increasingly questioning the meaning of their work and life.

Productivity, Oh Really?

2006-06-05T23:41:00.000+05:30

“Companies go to great lengths to set up lists of authorized approvals, meaning who can approve what size of purchase. But you will find that people who are not authorized to spend $100 on their own are authorized to send e-mails to people and waste hundreds of thousands of dollars' worth of company time.”

- Ed Reilly, president and chief executive of the American Management Association in an interview with New York Times

And this is what Don Blohowiak of Leadership Now blog has to say about this:

“Now, if you think about it, the average organization is a huge sieve pierced by a plethora of productivity and profitability punctures: Unnecessary emails surely, but also unnecessary and poorly run meetings, and badly designed jobs, along with associates hired to do work for which they’re ill-suited, insufficiently trained and led employees, inadequate measures of performance, brain drain turnover, “make work” programs, indecision, and on and on and on…”

Well, now I can say that all my rant on ineffectiveness, inefficiency and unproductiveness plaguing organizations and managers is not unfounded. Frankly speaking, this is the biggest irony of today’s workplace – with good intention we do more harm than by bad intention. Unknowingly, we are hampering the productivity of organizations and managers by building systems, procedures, and processes that act as obstacles rather than facilitators.

A Powerful Thought

2006-06-04T22:45:00.000+05:30

“There is nothing so useless as doing efficiently that which should not be done at all.”

- Peter Drucker

This is one powerful thought that should be engraved on the desk of every manager. If all managers could assimilate this wisdom, then a lot of effectiveness will suddenly appear in the affairs of businesses. Too often – and I mean it – managers are struck in doing things efficiently that should not be done at all. It’s often like – I am thirsty and instead of having water I am meticulously eating with all the table manners in place. What’s the use of doing something meticulously and efficiently if it is not required? Efficiency without effectiveness is useless.

One of the reasons for wastage of managerial time and resulting frustrations is the way many managers do unnecessary things with extreme efficiency. If the managers develop the ability to differentiate what is necessary and what is unnecessary then productivity of managers as well as the organizations will improve steeply. And in the process, both efficiency and effectiveness will improve.

Managers who stand out from the crowd are the ones who master the delicate art of balancing effectiveness with efficiency.

Internal Reference Syndrome

2006-05-29T19:23:00.000+05:30

Managers often suffer from a chronic disease, which I call "Internal reference syndrome". While taking decisions and making strategies, they frequently look inside-out and often give scant regard to the outside-in view. The result is plans going haywire with increased frequency.

The inside-out view of the managers is based on the idea of external environment revolving around an organization. But the reality is quite different. Most often, the organization revolves around the external environment, except in a few cases of breakthrough ideas, products, or services that change the environmental landscape. So this inside-out view of things often blurs the reality and leads to decisions which ought not to be made.

This inside-out view plagues the organization in many ways. Following are some of them:

Missed opportunities: Looking from inside results in always trying to fit the world into the internal perspective. But many a time, big opportunities arise when businesses view their internal world from the spectacles of the outside world and then align themselves with the outside world. It’s like re-circuiting the internal wires to optimize the flow of energy and ideas inside a business. Continuous inside-out view tends to overlook the new environmental realities and might result in missed opportunities for the business.
Lack of holistic view: If you look out of the window of your house, the view of outside would be dependent on the length and breadth of your window. And even if there is a window large enough to occupy the wall of your house, the view of the outside world will still not be in entirety. Similar is the problem with inside-out view. Managers practicing inside-out view often don’t see the entire picture of their surrounding and pass judgments based on limited view of the world from their narrow internal windows. And this visual defect very often results in defective decisions that cost the business significant monetary loss apart from waste of time and resources.
Death of creativity: Inside-out view also kills creativity inside an organization. Managers hate to look beyond the obvious as long as the outside world somehow fits into their internal frame of reference. The inside-out approach is basically a process in rationalization rather than exploration. As a result, the creative zing is missing in a business where inside-out view is practiced.
Biased action: Decisions and resulting actions originating from an inside-out approach is often biased towards maintaining the internal equilibrium rather than adapting the business to the changing realities of the world outside. As a result, decisions and actions are never optimized for best results. They are optimized for conformity with internal frame of reference.

How to overcome this tendency to look at issues from inside-out framework?

Some proactive measures and a little bit of change in organizational circuitry can go a long way in ensuring that inside-out view is replaced by outside-in view. Given below are some ideas that may help in overcoming the inside-out approach to managing business:

Internal consultant: Perhaps the urgent need of the hour in every business is an internal consultant, who can bring some reality check as well as balance the inside-out approach with outside-in approach. He should be someone who is not emotionally attached to the existing systems and processes. He should take an outside-in view of the business and critically appraise it from all angles. Basically, he should be someone who can objectively study the organization from both outside-in and inside-out framework in a holistic manner and help the management in shaping strategy based on the business’ strengths as well as the changing realities of the outside world.
Learning organization: Creating a learning organization is another way to discourage inside-out thinking. Often it is seen that the managers become so occupied by running their businesses that they are rarely up-to-date with the trends – academic as well as professional – in their industry or their economic and social surroundings. Even in terms of professional skills and know-how they are seldom aware of the latest developments. All these ensure that they keep on living in past in a world that is changing every moment with new technology, new thinking, new approaches, etc. So the solution is simple and yet not so simple – you have to develop a learning organization that has the both the curiosity of a student and result orientation of a leader or a manager. This learning organization will also keep the organization constantly aware of its external environment thereby keeping it in sync with the world around which it revolves.
Internalization of best practices: From the concept of an internal consultant and a learning organization, a third concept – internalization of best practices – emerges that may help businesses beat the inside-out way of thinking. The combined effort of an internal consultant and a learning organization will result in accumulation of best practices from other industries, competitors, suppliers, etc. Whenever a business comes across a best practice, it should analyze it to find whether it can add value to it if internalized. Many of the best practices can be applied across industries after some modification and internalization. If a business constantly endeavours to internalize potentially value-adding best practices that it may come across, then over a period of time, a sense of heterogeneity will develop in its organizational DNA where “our way of doing” will give in to “the best way of doing”.

To sum up, in today’s world, when chaos and change are the name of the game, managers as well business leaders would do well to come out of the frog’s mentality of viewing the well as the start and the end of the world. Perhaps it is high time they should proactively start cultivating the habit of having a multi-dimensional outside-in view of their organization and business to create a synergy with the ever changing external environment. This will go a long way in ensuring their survival and sustenance.