Friday, 28 February 2014

Brand Reduces Your Cost of Selling

I am sure most of the readers must be aware of the classic experiment done to know the value of the Brand. In this experiment business minded people were asked, what would happen to the ability of raising funds of the Coca Cola Company if its assets gets destroyed in a fire one day. Most of people said it would only cost time, efforts and money, as it would be very easy for the company to raise funds and re-create its assets around the world again. On the other hand, if because of some reason all customers of Coca Cola Company taken sick of partial amnesia one fine morning, the answer given by people was that Coca Cola would not remain Coca Cola despite its having all assets around the world intact. Therefore, the value resides in the minds of customers and not in company’s assets. This is value of the Brand.

Time and again, it has been proved that brand creates a business for a company and not a product. Products are only a means. There are instances in our life, proving to us that we buy only brand and not the products. Yes, sometimes confusion may arise when you buy a product which is ‘not-so-known’ to you or a product is sold to you by the shopkeeper, saying it is a good product or even better than the product you are looking for. Your not knowing about a brand does not mean that a brand does not exist. Possibility is there that the product you bought, represent the extreme end of ‘not-Known-to-you’ brand.

We do buy only a brand and not a product. Seems quite philosophical in nature, but it is the fact.  The challenge one however, can face in deciding whether it is a ‘Known’ brand or ‘Unknown’. You may be surprised by my creating a new category of something called ‘Unknown’ brand. Yes, there it exists. I simply mean here is that it is not possible for a customer to remember entire range of brands in a particular category. Bust as the product exist, so does the brand.  

Branding is the process of creating distinctive and durable images about products in the minds of customers. Therefore, branding does create a space in the mind of a customer. The real challenge is how to use the mind of customer which is a finite resource. On the other hand, market is flooded with enormous information. A customer is not capable to retain all brands related information and call the information at the time of requirement. It thus means companies need to do something which invariably - by design & even by default –its brand is recalled by its customers, time & again at the split of a second; as decisions, are taken so quickly by customers. Any slipping at the moment of customer’s taking a decision, will lead to switching of customers to some other ‘recently seen’ brand. Interestingly, it has been found that customers many a times end up choosing products that are easier to purchase rather than best for their purchase.

In a study it has been found that around 95% products launched in the world, fail within a year of their launch. Still, companies keep innovating and spending millions of dollars on R&D, every year. Reason of this spending is only one. A new product if at all succeeds in finding a place in the mind of customer, is much more than the cost incurred on it. But, the success is less on the product features and more due to finding a place in the mind of a potential customer. The companies do every bit & trick to get their brands registered within the mind of its customers. This helps companies, attracting to its products, every time a customer takes a decision to buy a product in a particular category.

If I put it in other words, it is a brand which change ‘me too’ commodity into a ‘must have’ purchase, helping your product to stand out in an increasingly cluttered marketplace.

Insightful is the thought that once established, a product gets sold on its own. It makes a company sale its products at lesser cost because company does start incurring lesser cost on buying space in the external world, like shop & retailer counters etc. So big is the gain, still companies do try doing all other things to cut the cost except investing in its branding and en-cashing it for many years; giving them  the benefit of lesser cost of selling and better profit margins.

My writing this note is one and only one. If branding helps in reducing the ‘cost of Selling a product’ than why CEOs are reluctant and see branding cost, as an expenditure and not an investment?  Generally, CEOs keep harping on the need of following Cost Leadership Strategy in today’s mostly ‘commoditized market’, but turn their face to some thing else to achieve it.  Isn't it the case, with you reader?

Secondly, each & every company strive to shift its products from ‘one end of Unknown category to the other end of Known’. It means, try converting a commodity product into a ‘Different Product’. Only reason of doing so is to lower the cost of product as more &more products will sell and sometimes intention is to get 'premium' on it too.

The branding gives a company a much stronger platform for growth through new products/markets and retailer distribution, once brand is established.  It leads to creating a brand that helps to build engaging, long term relationships with your customers. Although, looking at the brand value, many companies have started investing heavily in their brands. Top twenty brands in the world together valued around $ 800 billion. Coca-cola alone stands at $80 billion. Companies can’t even think creating a business of that magnitude. Although, companies have realised the importance of branding and even have started showing their brand values on their balance sheet, it is still to be used a weapon to make a profit.

CEOs, it is not only manufacturing a product, selling a product and try making some margin on it. But if you want to have a long lasting competitive advantage over your customers, create a brand – that will sell your products, continuously at lower cost; giving your companies better than average profit margins. I hope you look for that more than manufacturing & selling. Isn’t it?? So, start investing and create wealth for your stakeholders.

Wednesday, 26 February 2014


Wednesday, 26 February 2014 | Rajesh Tripathi


The scope of HR has grown by leaps and bounds as it is required by every business for its burgeoning demands, in terms of people orientation, creativity and innovative thinking to be cultivated among its employees, says Rajesh Tripathi
HR has evolved as an integral function in organisations these days. Today, there is a lot more emphasis on the Human Resource function in organisations as they look forward to inculcate a people driven orientation. As Henry Ford said: “Take everything, but leave me my people, and in two years I’ll be at the top again”. So it’s the people who make the organisation and the rest of them like material, machine and information, follows. Organisations are looking to develop and groom their employees as the axis has shifted from production to productivity. The onus is now on HR to shape and nurture people for better productivity. Job responsibilities of HR personnel has also increased as they are also expected to sketch out the psychological and behavioural aspects of employees to fit in to the organisational culture.
As lot more organisations are becoming people centric, so students can look forward to a bright and challenging career ahead. The corporate world is witnessing turn around in the history of HR function as HR managers, over a due course of time, are becoming CEOs. Earlier this was not the practice but as the HR function is evolving, HR managers are recalled in important decision making process and invariably finding their foothold in the Board of Directors in organisations.
The scope for HR function has grown by leaps and bounds as it is required by every business for its burgeoning demands in terms of  people orientation, creativity and innovative thinking to be cultivated among its employees. This in terms will expedite the objective of a sustainable business. As this function is rapidly engulfing a large sphere in the corporate structure so the job profiles are created based on the demand of any particular element of this profession. Say for example, in an established HR function separate profiles for recruitment and selection, training and development, performance management system, compensation and benefits, organisation development based on the strength of work are handled on a daily basis.
Since this function is now recognised at par with other functions like marketing, finance etc, so remuneration is not an issue. Aspirants can look forward to draw striking salaries based on their knowledge and most importantly their skills and attitude.
In the international arena, HR people need to tackle a wide variety of people in terms of their demographic and geographic differences as compared to the Indian scenario. Also getting acquainted with the changing laws and policies from country to country in itself is a tedious task and alienating your organisation policies as against such changing laws becomes much more challenging.
The strategies of HR have also evolved with challenges galore. They have found out empirical and clinical methods to hire fresh talent and also come out with untraded and unpractised ways to deal with attrition. The focal point has shifted from hard skills to soft skills predominantly. The belief in this goes by with the fitment of an employee in the organisation culture rather than just into a specific role or job description.
However, there are some challenges for this function which come in different forms and vicissitudes. At the functional level, they will find it difficult to cope with people and unrest if they are not able to acquire good knowledge of human behaviour and aptly comprehend them. At the business level, if HR managers do not enlighten themselves about the complete business process, they fail to become part of any decision making process in the business.
More often than not the challenges , as we come across, while hiring in tier 2 and tier 3 cities is the lack of communication skills and the personality as a whole. People more often lack the basic communication skills required to carry out themselves and their task in this globalised age. The persona of the person, if not groomed can lead to lack of flair and exuberance required to showcase at the corporate level.
HR skills can be inculcated in students from the early stage of their career if proper training module is executed. Students should learn to work in team.
They should start building their skills which would facilitate them to nullify differences and enhance their proximity to people. They need to read a lot. Develop a habit of reading anything and everything regarding all business functions but aim to read books related to people’s psychology, business news and articles more. Putting their reading to practice, they should also need to cultivate the habit of observing people and practicing to comprehend their minds and actions. This is a cyclic process which should go on and on and they should aim at improving on their own and be strict and honest with themselves in terms of accepting the mistakes they make in their course of learning people and rectifying it over and again.
Teachers should focus to arrange feedback and mock sessions for students who are practicing such methodology to develop and finesse their reading capabilities. As stated earlier, these sessions should be simulation-oriented encapsulating objective feedback. Simulation based teaching, as outlined, wherein students are put to test in real-life situations and providing fair feedback for their development is a tool to buff up the reading capabilities in them.
Young professionals are dynamic in nature and seek for a job at every drop of a hat. The emphasis to retain such professionals should be the compensation structure to start with. More in hand salary is the key difference between Gen X and Gen Y people. Gen Y is reluctant to reconcile and are always on the lookout for greener pastures. We need to build in a culture wherein we empower them with responsibilities such as presenting their ideas, leading from the front etc so that they can effectively analyse their contribution and significance as a part of the decision making process in the organisation.

The writer is vice president, human resource, GHCL Limited.
Wednesday, 26 February 2014

Tuesday, 25 February 2014

Should not your R&D be run by the Sales & Marketing Head?

More often than not, you think of an R&D Deptt in a commercial organisation, it is run by a genius. Why? R&D means development of new products or new features in an existing product. Why new products or new features, more so in an existing category of products; it is nothing but just to escape commoditization or to remain ahead of competitors. May be, it makes sense to some and perhaps this is one of many reasons, customers are flooded with new products or old products with new features. This condition does make a sense to customers or not, organisations are least concerned with as far as they feel successful???

But I would not be wrong if I say this tendency in organisations is helping only in the market-evolution and nothing more than that. But with all conviction I can also say, this is not helping organisations in building long lasting businesses for themselves which can survive onslaught from all corners. The sole goal of organisations today is to create a sustainable business. But, how can this be achieved if you are not connected with your customers. My reason of saying this is as I see there is a major disconnect between customers and their expectations from organisations. Organisations keep flooding the market with newer products with a hope to attract customers for possible longer period of time with the help of their genius R&D Developers and; on the other hand, customers are either getting frustrated or confused with 'new' products, having marginal value. This is happening as R&D is being done by ‘geniuses’ who are stationed at a place which is far away from real time customers. It seems it is due to the fact that there is huge confusion about what is Innovation?

Is innovation a new product or new features or technological development? Perhaps all are correct or may be none? To my understanding “Innovation is nothing but a set of activities directed towards achieving a new form of values for customers which customers can differentiate and appreciate.” Any new form, if not differentiated from existing product/s or appreciated by customer should not qualify for being a new product. Therefore, a connect should be established between customers and products.  There are many instances wherein many products in markets did not click with potential customers. Reason for this seems to be only one - missing connect.

Possible solution for this could be let the person/s having connection be in-charge of developing new products or even new features in an existing product. And, who is better than the Sales & Marketing professionals??  Further, as products are being innovated by a set of people who are having no common reference-points with market or for that matter with customers, failure is bound to happen.  This is happening as 'R&D Geniuses' do not see any need of being close to customers as part of their responsibility. Conversely, people who connect with i.e. Sales & Marketing as part of their role are not given this responsibility. A big Mismatch.

If I look at current practices, organisations create a separate R&D cost centre; keep provision for millions of dollars for new product or new features development. Scientists at their end, keep consuming these dollars – sometimes successfully, sometimes not. Failures are more to count, to mention here. These failures eventually lead to either business failure or become reasons for non-supportive in building long lasting competitive advantage in the market for an organisation. So, what is wrong if a Sales & Marketing person is put in charge of R&D?

I will say, nothing wrong with the proposition. Reason is simple, as mentioned above, it is Sales & Marketing personnel who are closer to their customers. They know the pain areas of their customers. Sales & Marketing function can work on these pains successfully. They can help customers in reducing hidden costs that a customer has to bear in buying and using a product or service. Every customer for any expensive to inexpensive product or service looks for ways & means for reducing hidden cost. Let me add here, every business transaction – big or small has a hidden cost.

Another reason of my recommending Sales & Marketing be in-charge of R&D is that it is Sales & Marketing people who can help customer in reducing hidden risks inherent in every transaction.

Sales & Marketing professionals can also easily look for reasons of their customers getting away from their products or services. More so, it is in the case of potential customers. They can also try knowing why potential customers are not buying their product whereas every single signal indicates that it should be other way round.

Conclusively, I can say that it is only Sales & Marketing personnel who can deliver product/s or service to their customers what they are looking for and not “R&D Geniuses”. Businesses are run on commercially viable products and not on ‘pure science’ products. Pure science discoveries help in innovating commercial products. Let your geniuses work in background on the solid relationship with Sales & Marketing function.

So, give your Sales & Marketing Head right arms to get for you, your dream of creating a long lasting business and competitive advantage over competitors. Make free your geniuses to concentrate on ‘Required Innovation’ to fulfill your customers needs & expectations. Try once, you would not repent.

Sunday, 23 February 2014

CEOs - Follow traditional advice & make your companies fail

"Doing business has become a tedious job today, and on the top of  it,  if shareholders want their CEOs to make their businesses successful not only in short run but in long run than this in itself is a ‘business'. Business has in real sense become very unpredictable in today’s  circumstantial perspective where you even do not know what is in store for you when you get up tomorrow morning."

But I do not believe what I said above. Business is very easy to do, only thing one has to follow is not to follow ‘Traditional Advice’.

You hear talking business honchos, saying that a company has to go for Mergers & Acquisitions, or grow ‘Organically’ to increase footprint or revenue.  On M&As, advice like ‘acquire, the right way’ is quite common.

Sometimes you hear someone saying a company failed as it did not compete with its competitors in bringing in new products continuously in the market, as the company was not very innovative.

Other common but very emphasizing advice is ‘to remain Customer-Focussed’. No doubt, customer is very central of being in business. But, focus on the right customers in the right way’ does not ensure your business successful now and in the future.

Another, generally unsolicited advice, one come across is that a company should be ‘Risk Taking’ in its approach. I could not till today understand the meaning of being ‘Risk Taking’. Is it vandalizing thoughts of customers not to purchase your product/s???

A company can only ensure success for itself by ‘Leveraging Non-Price Value to Price-Value’. A very basic principle to follow - ‘A Price Value is nothing but to get more value at less price'.  It does mean that at lesser & lesser price, more & more value, one expect for and that too always, everywhere across the globe. And, I have not come across a single person or an organisation which does not look for more value at a lesser price.

‘Non-Price Value’ like quality, style, brand, even convenience on the other hand, is a perceived benefit other than price.

CEOs need to understand that a Company creates a ‘position’ for itself in market depending upon how much of each of price and non-price value a company provides to its customers in comparison to its competitors not by M&As or being simply Customer-Focussed or for that matter Risk-taking or Innovative. There are thousands of companies which were exceptional in one or many of above quoted fields but still failed to create a sustainable position for themselves in the market.

The challenge is, generally seen struggle in the minds of CEOs or promoters to choose for short term success on the pretext that no one can see future, so get whatever is possible now. Resulting into companies going for reducing cost and try competing on price value and not on increasing service levels and competing on non-price value - what I call a ‘Middle Path’ to be seen successful as a CEO who is generally in a driving seat for few years only.

It’s not therefore ‘middle path’ but go for ‘non-value price path’.  It thus means that a company has to stand with its customers when the customers need it most. Individual or for that matter an organisation as a customer is willing to pay ‘Premium’ for this act of service provider only.

Check this fact yourself, when you decide paying more to any of your service provider in your personal life – be it your driver or maid at home.

Customers pay more for ‘Superior Non-Price Value’ than ‘Price Value’.  It is found that when ‘exceptional companies’ abandoned a non-price position, their performance goes down initially and they get scrapped from the horizon of markets, entirely.

Summarizing my views on making a company successful in short or long term is that whatever a company does - from diversification to M&As, from risk taking to innovative but never forget to protect or exceed ‘ non-price value’ to its customers. A company has to remain consistent with increasing ‘non-price value’, may be at the cost of being price-competitive.


Saturday, 22 February 2014

"Creating an Inclusive & Accessible Workplace: HR Initiatives


Wednesday, 26 February 2014 | Pioneer

Business World; 21-Feb-2014 
'English Language Hampers Inclusiveness among Employees' - Newly appointed VC of GGSIU, A.S. Beniwal, was speaking at a conference on promoting inclusiveness at workplace

Rozelle Laha

Use of English as the language of workplace communication has hampered the growth of inclusiveness among co-workers, according to Prof Anup Singh Beniwal, the newly appointed Vice Chancellor of Guru Gobind Singh Indraprastha University, Delhi. “Language should be able to connect people,” he said.

Beniwal was addressing a students, researchers, NGO representatives and industry professionals at the National Conference On Creating an Inclusive and Accessible Workplace, an HR Initiative organised by the university on Friday, 21 February, 2014. “HR for me is not just about Human Resources, it is about Human Relations,” stressed Beniwal. Management education should promote variety. The variety of skill set among employees should not make them compete with each other but rather make them contribute to the organisation irrespective of the hierarchy.

The conference was convened with the aim of emphasising the need to focus on promoting inclusiveness at workplace. Rajesh Tripathi, VP and Head, Human Resources, Gujrat Heavy Chemicals Limited, focused on the need to bridge the communication gap between the head of the organisation and the employees to promote inclusiveness and accessibility. He also spoke of the lack of accessibility in a traditional organisation like GHCL and his efforts to bridge the gap.

“An employee may have some good idea about improving the organisation. But, if they are unable to interact with the top management, it is not the employee who will lose anything, but rather the employer who might miss out on a good idea for improvement,” Tripathi said.

Thilikam Rajendaran, Managing Director of Arunim, an NGO under National Trust, spoke about the organisation’s efforts in creating job opportunities for Persons With Disabilities (PWD). “Giving jobs to PWDs or granting them opportunities should not be out of sympathy and must be beyond just a CSR initiative,” said Rajendran. She also emphasised on the need to create a space for them in the corporate workplace as a giant step towards promotion of inclusivess. Rajendaran is associated with disability sector for over 25 years and has been instrumental in pioneering the concept of partnerships with industry associations like Ficci, Export Promotion Council and so on.

The event was organised in collaboration with the Ministry of Social Justice and Empowerment, Government of India and supported by NHRD, Delhi.


21 Feb, 2014 15:51 IST

'English Language Hampers Inclusiveness Among Employees'

Newly appointed VC of GGSIU, A.S. Beniwal, was speaking at a conference on promoting inclusiveness at workplace

Rozelle Laha

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Wednesday, 19 February 2014

Big Picture Thinking: an Ability or Attitude

Is it an ability or attitude?

-Do organisations fail due to lack of Big Picture Thinking?

You meet any Senior Executive anywhere across the globe; you listen to a very common advice. A senior person in an organisation should have ability to see a Big Picture to drive an organisation into future. A must ability, no doubt on its requirement but it makes you think - is it an attribute one is borne with or it can be developed?

Let me try giving you my thought on it.

Somewhere, I read that one should be having as much information as possible. Reason, different information pieces when joint, gives birth to a new piece. The new piece provides unique & altogether different information. This 'new' information may be unique because of its content, substance or its positioning. Therefore, point is, if one has access to different information, perhaps one can easily see a big picture. For example, since ages, a very peculiar thing kept happening, but no one knew it. It was just couple of years back that we came to know about it. Cattle when graze in a field align in a north-south axis, therefore orienting themselves to the magnetic north of the earth. It became possible when in 2008; some zoologists looked at the Google's Earth images. A new information which may be exploited by some radical thinkers to grow grass or crops, helping cows/cattle graze easily and quickly without damaging much of the field & crop itself.

'Big Picture' as a word, came into existence accidentally, when Nadar a French person took first photograph of earth, riding a hot balloon in the second half of 19th century. This unplanned event led to a unique application of various subjects together - geology, archaeology, meteorology, and importantly espionage.  This 'big picture' became 'bird's eye' for Napolean-III who used it on his enemy well. This development led to a deadly combination of aerial photography and military strategy which is being used till date from high sky to conquer one’s enemy.

Keeping above facts in view, if I define ‘Big Picture Thinking’ then, it is nothing but initial efforts forced by circumstances to collect some information by a person who exploited by converting it into a habit of collecting information not as & when required but continuously. Therefore, it is a process of bringing an attitudinal change in the person, leading to a permanent change in a habit, which may be termed as ABILITY.

I can without hesitation say that Big Picture is an Attitude or at best a habit but not Ability.

‘So near but still so far’ – a Business Challenge:

My reason of using this phrase here is that when I hear that organisations spend hundreds of thousands of dollors on their employees for building this ability in them.  But, for sure with no success or may be with limited success. When I dissected & collected information, I found that challenge was not atall a challenge but mere a human tendency to cling to comfort zone, they are used to.

Let me explain it. Generally, an employee gets into a profession by specializing in a major subject (knowledge). Gets into a job, clinging to that knowledge; practice it for some years; gets success initially hard way but later easy way; making the employee entering into a comfort zone, unknowingly.

If employees are responsible for such development, so are the organisations. Organisations are instrumental in making employees enter into comfort zone easily; realizing later that they did a mistake. They try to revert it by giving so-called training, but alas! It was too late, already. It was too late because, organisations made a small ‘effort’ getting converted into a habit and later unsuccessfully try changing it by simple training & counselling. But, ‘habits’ die hard.

The challenge becomes serious, when you see it at the level of CEOs & Senior Executives. It is generally seen that even senior executives could not detach themselves from their initially 'acquired knowledge of a subject' but remain ‘subject blind’ till the end of their careers. I have seen senior executives not becoming ‘Business Managers’ but simply remain ‘Subject Managers’ till the entire curve of their careers; putting organisations into serious doldrums, because of their habit of clinging to small patch of Business Subject.

The only reason of this failure due to Executives is their not getting into the habit of collecting information. CEOs and Senior Executive need to develop habit of collecting information. This information could be in the form of ‘subject’ of Sales, Marketing, Economics, Finance, Operation, HR or Strategy, equally.

So, Big Picture is a normal habit- just think and you get it. Still people do not change. Simply, a human tendency. Aptly, we can say, 'so near, still so far.

Tuesday, 18 February 2014

Stressed Loans...............................

My apprehension came true when I saw a news on " Stressed Loans of Listed Banks Rose 50% in calendar year 2013' in The Economic Times, today.

For ready access, the link is provided below.