Monday, 31 March 2014

'Chemical Reaction' : Industry & Career

Published in Education Times, The Times of India, 31-March-2014

Saturday, 29 March 2014

Commoditisation of a Product- Who is responsible for it?

Who wants to see their products becoming a commodity? But it happens. Market forces are relentlessly striving to make every other product a commodity product. Reason, it is easy to ‘imitate’ than to innovate - a short term haul to become successful.

Whose mistake is this to see happening, their products becoming commodity products?  I am sure; you will agree with me, it is companies who allow it to happen.

Reason, ‘Product Differentiation’ requires relentless innovation at the end of the sellers - but this needs a different mindset along with resources.

Yes, there are companies who defy the ‘rule’ of commoditisation and continuously, unabatedly try putting in time, efforts and resources to innovate. Result, these companies charge premium and ensure for themselves Sustainability.

Each and every product can be differentiated or allowed to become a commodity, I believe in it. You simply need a different mindset.

As rightly done for his company by Franklin D Raines, Chairman & CEO of Fannie Mae, who later said, ‘People talk about mortgages as commodities. But........ nothing has to be a commodity. Not even mortgages....... Indeed our strategy is to transform mortgages from commodity....... We are not talking about mere branding, we mean creating real differentiation that consumers value.’

Do you see the difference in the above quote? Only of the mindset.

In commoditization, product differentiation is destroyed by competition and therefore buyers refuse to pay any premium. Under pressure to survive, companies immediately try becoming ‘Low-Cost Leader’ and consequently resort to Cost-cutting as the only means. Commonest & easiest actions are taken, as these actions are under the control of companies. Actions like moving production to low-cost locations; trading low margins for hopefully to have higher volume; pleading to customers to ‘let them have some margins’ by sharing their cost structures and overall just focus on ‘Sales’ and not any other thing, including ‘Marketing’ to differentiate and charge premium are resorted to.

Companies have to change their ‘Thought Process’ and must become ‘Problem Solver’ for their customers and not simply a producer of products.  Companies have to integrate their businesses with their customers and work on the problem areas and solve them for their customers.

‘It is not mere having a product that can make you demand premium, but a product has to be wrapped in the ‘Wrapper of Service’ to command premium. I believe in it.

As rightly summed up by a CEO; ‘Companies sell services only when they cannot sell their products.’

Other thing I want to exhort to here,  is that ‘No two customers in any industry have similar needs.’ It thus means principles of Segmentation and Marketing Mix have now reduced importance in today’s business world. Companies have to move away from segmentation and marketing mix to create differentiation.

Every company has ‘genes’ of Differentiation and Commoditization. Choice is of CEOs what they want their company to be known for.

Monday, 24 March 2014

Domestic Cos go slow on Expat Hiring, turn to Indian Talent

My views got coverage in many daily newspapers of India. Also, find enclosed below the online link regarding the same:

Sunday, 23 March 2014

5Qs: Ingredients to make you and your Organisation successful

Every one - organisations to people - want to be successful, in this rapidly changing world. Success means different to different people. However, bigger part of the society, including organisations and people generally, do measure success in the term of monetary advancements? So what organisations and people have to look at continuously to make advancement in the set direction of success are Soft and Hard Resources. It is not only availability of these two ingredients which make someone successful or otherwise, but the proper mix of these two is of paramount importance. Of late, it has been seen that soft part is gaining utmost importance.

The world today is primarily facing two challenges - understanding & making sense of the changes around us at both individual and organisation level, and setting direction & making progress in an increasingly unpredicted world; rather on positive tone, daily unfolding world.

It would not be of prudence here to talk about the Hard Resources like material, machine, capital etc, as the whole world has understood its limited role in the success - whether an organisation, for that matter even an individual. There are many examples of successful people and organisations that have underrated importance of hard resources in continuous success. Best example is of Ford.

To make sense of fast changing world and fast acclimatization & accommodation at the end of organisations and people will help in achieving success. There are following 5-Qs which therefore need to pay attention to:

·        Intelligence Quotient
·        Emotional Quotient
·        Resilience Quotient
·        Political Quotient
·        Moral Quotient

 I will deal with each quotient, one-by-one in my next blogs. So look for it

Friday, 21 March 2014

Do Organisations know who their Customers are?

You inquire CEOs about what sort of companies they head. More often than not, answer you get is, they head, 'a Customer-Focused Company’. But, you find them fumbling at your second question of who their customers are? Most of the time, you might have noticed, you get generic answer to this specific question.

Reasons could be many.

One general reason could be overwhelming ‘use to misuse’ of the world ‘Customer’. However, the specific reason which I see is the  hurry on the part of CEOs to make quick bucks, covering as much catchment of customers - relevant to irrelevant, as possible.

Coming back, this fumbling you can see in an entire organisation, where you even come across the word, customer being used for interdepartmental relations; by employees of one department to the employees of another department. More difficult it becomes for me to even understand about their intention for this ‘misuse’. On one hand companies insist on departments, calling each other as customers and on the other hand, they insist on building a culture of collaboration among departments and their employees. Collaboration with Customers, can you digest this proposition??

If I look at the understanding about the word ‘Customer in business perspective, customer is generally defined who can add value to revenue. It thus means who can help in increasing sales. But such short-sighted interpretation leads to confusion among not only employees but also ‘real customers’. What I call ‘Diffusion of Confusion’. More is the diffusion in a company, more will it have confusion. This confusion eventually, erodes the basic perspective of doing business i.e. increasing revenue.

It is therefore suggested that every company first, therefore should take the cognizance of the importance of identification of set of people who will not only increase the revenue but help a company in unlocking the most of the value in a business. Until, a set of people which can be defined as ‘Primary Customer’ is not identified by companies, who can continually provide unlocking business opportunities to them, companies will only be successful for a while and will only falsify their claim of being ‘Customer-Focused’

I am quite often been asked, whether there should be only one ‘primary’ customer or it could be more than one.  My response generally to this query that too with a rider is, a company can have as many primary customers as it can deal with it & unlock value residing in the relationships but first, companies should check their resources & competencies. There are instances wherein, companies have identified up to 4 primary customers, but it is suggested that a company should have only one primary customer.

Whatever be the number of Primary Customers, a company choose; it must remain focused on those selected primary customers. Any inconsistency will only dilute its business perspectives and reputation the market.

The advantage of being focused on selected few customers, will help spread the understanding at every link of entire value chain. Starting from suppliers to buyers. This will lead to building unparallel Customer Loyalty, which will help in creating wealth ultimately.

Further, once primary customer is identified, it will help in continuous value adding interactions with each other. A company and its customers. This interaction will help in knowing the exact needs of customer and fulfillment of the same by the company. End result, unlocking of value and better revenue.

To become customer focused, a company should look at three facets of self and its primary customers. These are company perspective in the market, its capabilities and finally, profit potential from its identified set of people as primary customer.

The company perspective usually provides insight about a company’s liking and disliking, its nature, its culture. I will say in sort, it is ‘soft part’ of a company. For example, you may hear about a company that it is frugal in nature or it provides superior experience or like for Apple, it is perfectionist.

Capabilities on the other hand, give indication about a company’s competencies to provide desired product value, as desired by customers.

The third facet predicts about a customer’s profit providing ability. Every customer cannot provide value to a customer. For example, customers for high end luxury products are different than utility oriented customers.
Also, companies need to keep in view that within the same market and industry, different primary customers may value different things. This could spread from low-price to service quality to convenience to technology to specific attribute in a product.

Conclusively, it can be said that to become a Customer- Focused’ Company, companies need to work hard initially in identifying their primary customers or otherwise, calling themselves  as customer-focused will only remain a tag for them and not value adding connotation.

Sunday, 16 March 2014

Cost of Thinking: A variable in the Profitability Formula of Organisations

A customer when is out for a purchase, he is not miffed about his purchasing decision. Mind already has taken a decision, what to purchase & why to purchase. However, sometimes you become jittery when you see an advertisement about a new product in the same product category, you intend to purchase while on your way to the shop. Did you ever experience it?

Two theories come in play. One theory explains mind’s continually attempting effort to minimise hidden costs and hidden risks. Therefore, it is the force of mind, compelling the customer to buy a known product only. The second theory describes what all goes inside when you look at a new product.

However, the underlying facet of both the theories is where ‘Advertising’ plays its role.

In my one of earlier blogs, I explained about resistance of brain to experimenting newer things. It always tries going a beaten track. It always looks for stability so that it does not have to apply its ‘brain’ again to know about the new thing. This aspect of brain helps us in building our habits. It follows a pattern of thinking out of its habit while taking a decision; any deviation to earlier decision criteria, puts it into ‘discomfort state of mind’.

This is where the Law of Advertising comes in picture. Advertisement and repeated advertisement first breaks the inertia of customers about a new product and then same inertia is used to stop customer switching over to another product later. What a brain, we human beings have? Same principle, two applications.

In researches conducted on consumer behavior so far, not much has been found how brands influence customers at macro level but it does when seen at behavior level. Advertisements incite & persuade customers to buy a product based on specific advertisement themes.

What goes inside our mind is that customers try minimizing their efforts directed towards reducing hidden costs and hidden risks of using a new product. These efforts are primarily focused on minimizing efforts  for information acquisition, learning, storage, retrieval, comparison, evaluation etc. This is called Cost of Thinking.

This habit of ours put us into a very awkward situation. If I say that this habit of ours only makes us pay premium on product we purchase and that too again and again. Out of this only, companies compel their customers to buy their products again & again and pay premium of using it repeatedly.

Conclusively, it can be said that our intention to reduce, Cost of Thinking, helps companies to make profit for themselves. Companies as per available research data available, try getting targeted and potential customers to their fold using the ‘principle of minimizing the Cost of Thinking.’ And the means used for this is ‘Advertising’. Advertisements are aimed to incapacitate customers of thinking to switch to another brand. Thereby, making customers buy same product or products, over & over again and also pay premium for our ‘habits’ at continuum.

CEOs, so do not hesitate, go for & keep aside a budget for branding your products and reap the benefit continuously. Advertising is the winning Profitability Formula; do not doubt its advantages.

At the end, it is the game of Mind only.

Mindless Experience or Mindful Action: what makes a difference for success?

Human is slave of its behavior. Brain makes behavior for the reason of not doing his job. Brain does not want ‘one’ to change; not only this, ‘other brains’ do not want other to change too. In essence, we all seek stability. We do not want to go through the grind every time, despite the fact the ‘grind of time’ is ever running. Everyone wants to keep hold of everything and anything. Brain, I say is not in one’s control. It literally takes granted the ‘holder’.

Conclusive impact in the corporate world can be seen when you see a manager talking to his subordinate, ‘This is the way to do it.’ How come there is only one way of doing one thing. It is not managers only who stop creativity, out of their fear of losing control?? Look at other manager, saying ‘I have experience of doing it, so you have to do it the same way’.

How unfortunate it is. How mindless we become due to our habits of seeking stability by stopping other from attempting something afresh. Let the experience people know, the relevance of ‘experience’ is to learn but not to follow. 

Context and perspective keep changing, ever changing. Unstoppable.

It therefore means that there is not only one way of doing a job but many ways. Only difference is or rather has to be, the chosen way should depend on the current context.

‘You can’t solve today’s problems with yesterday’s solutions.’ Ellen Langer says.

What it does mean that what made one successful, cannot make other person successful by following same rules of success. Context changes, time changes, even perspective & objective changes of doing a job; than how come one rule applies to all. Mindless thinking.

Be Mindful to be successful, she suggests.

Mindful state makes you get the guidance from old rules, routines and goals but never allow them to govern you, today.

Research of over nearly 40 years done by Ellen Langer proved be mindfulness.  She has defined Mindfulness as a process of actively noticing new things.

“Mindfulness makes one, more sensitive to ever changing context and perspective. It is the essence of Engagement.” The study of Langer revealed that by paying attention to what is going on around us, instead of operating on auto-pilot, we unlock our creativity and boost performance.

So, go around ‘mindful’ to look at things in your own perspective in different or changed context. ‘Experienced people’ will try putting before you their perspective even in changed context today. What a mindlessness proposition. Isn't it?

Saturday, 15 March 2014

Indian Economy: Reviving the Growth

A surprising but the fact is that the Indian Economy grew at the rate of around 8% till 2011-12; quite opposite to the general perception. This reality does therefore give a hope that nothing much has slipped out of our hands in terms of the Indian Economy. It was just one year back we were crunching average 8% growth per year that too continually since 2005. A well deserved appreciation for the economy which was known for the ‘Hindu Growth Rate’. This is just opposite to the wide spread criticism of late, for the Indian Economy not only in India but across the world.

First, let us look into what all made India achieve ‘Accelerated Growth Rate’.

Primarily the reason of this continuous feat for a period of 7-8 years was that every single sector contributed to the growth. Although, the blue-eyed services sector which made it largely possible, others were not left behind. However, other two sectors which contributed immensely to this success were agriculture and manufacturing. Manufacturing sector grew at a reasonably unexpected rate, particularly in the watershed year of 2011-12 it grew at the rate of around 7.4%. Agriculture grew at the rate of around 3.6% in the same period. Other economic factors which helped India achieve the feat were its domestic savings rate, making Indian economy, one of the fastest growing economies. What came handy was enough money making opportunity and Indian habit of saving money.  Country reached to its highest ever level of domestic savings of 36.8% and Investment Rate of 38.1% of the GDP, respectively in 2008. The ICOR i.e. Incremental Capital Output Ratio was maintained till the year 2012 at the level of 4:1. ICOR is the ratio to know the efficiency of the investment. Higher the ICOR, lower the efficiency of the investment.

What went wrong in last two years?

This analysis will let you know real reasons of downfall in last two years. Such introspection hopefully will help the country, in reverting the trend as it would not be difficult for resilient Indian Economy to bounce back to the ‘Accelerated Growth Rate’ of 8%+.

As per old proverb, money makes money. It stands correct in case of Indian economy or any other economy.  When country started making money, habit of savings, made it possible to save. Saved money was rotated back into the economy. It therefore, means that any weakening of this cycle, will lead to breaking the momentum in the economy.  It is all that happened, post 2008. World economic crisis, led to low FDI, low sentiment in the corporate. General public which was happily spending the money a couple of months before crisis, start hoarding the money. Resulting into slow growth rate, in short.

Let us look at reasons more based on Economics theories. The capital in an economy primarily comes from three sources: household, corporate and government savings, called domestic savings. In last two years, available data shows that although not much change has happened with respect to household savings but other two savings i.e. corporate & govt have gone down drastically. India savings rate which peaked at 36.8% of the GDP in the year 2008, stooped to 31.3% in 2012 and again to 30.1% in 2013.  A big change was in the nature of household savings. It moved significantly from financial savings to physical savings.

This all made situation little complicated. Market saw short supply of fresh infusion. Further complication surfaced when supply of coal to manufacturing and power generation plants became a challenge due to cancellation of mines/litigation cases. Infrastructural projects which were backbone of employment generation, started spinning off the track. It resulted in negative change in ICOR that hovered at the level of 5.4% to 11.4%. ICOR is the index of efficiency of investment. It gives the indication that investment capital accumulated in projects is not yielding commensurate output. Overall domestic savings dropped to 30.1% and Investment Rate to 34.8% of GDP in 2012-13.  This is due to increase in the negative savings by the Government, the decline in profitability of private players and decline in net financial savings of households. The widening gap between the savings and investment rate, resulted in all-time high CAD of 4.8% of GDP in year 2013.

Furthermore, investment rate which is a function of CAD and saving rate bore the brunt at both the levels. CAD gone to unexpected high level and saving went down as mentioned above.

Future is bright for sure!!!

Green shoots however, can be seen in the Indian Economy in last couple of months. We have to water to make these shoots to grow into big tree again, together.

In last three quarters of the year 2013-14, the economy has grown by 4.9% rate. The manufacturing sector has started giving better than expected results. Picture of Agriculture sector is better than the year 2012-13. Food inflation which was turning out to be an issue of late has started residing in background. Economists are hoping to close the year at around 5% growth rate. Not bad at all, keeping the size of the Indian Economy.

Investment rate is still at commendable level of 30.4% of GDP, now. But, ICOR has to be brought back to the level of 4:1, as was the case till 2013.

Government however, has to work on retaining CAD to the level of 4.2 to 4.8% of the GDP. It has to further move out of populist measure like subsidies, no matter what. Keeping the disparity of ‘have & have not’, the government although has to continue with its subsidy measure, but it should be restricted to food subsidy and should slowly move away from others. The target should be to retain it at the level of 1.2% of the GDP from the current 2.2%.
Other specific areas for government to focus are:

i.              Infrastructure sector has to be made viable by infusing better liquidity. Projects which got de-railed of late, fist should be brought back to normalcy level. No further delays to be tolerated.
ii.            Some specific measures should be taken to make free agriculture sector from the shackles of uncertainties.
iii.           Power is another area which needs immediate attention. Any unavailability effects manufacturing directly.
iv.           Reforms need to be pushed forth with undeterred attention. Reforms in the following areas are already late beyond general comprehension:

a.   Land Acquisition
It has been a tussle point between general public and growth. Without easy land availability, how country, shall provide required land for infrastructural development.

b.   Environment
Fortunately, we have fuel for our required fire. We as a country are sitting on huge natural resources of coal etc. We need to be cautious & careful only to extract it as it is unfortunately available under our green belt. Although, some compromise has to be made while mining coal as these are available in dense forests cover of the country. Any unscrupulous action can lead to havoc to the environment.

c.   Governance
Governance is not only the responsibility of the government. Private sector has to take serious steps to ensure its compliance, as well.

d.   Labour Reforms
This is another area which needs immediate action. Economy today does not rest on steady requirement of labour supply. There are many employment opportunities which can be termed seasonal and therefore, these types of companies should be able to hire & fire as per their requirement. Adjustment to labour requirement should be made possible, as it is followed in countries like Germany.

For example, textiles industry is extensively labour intensive industry. Of late, India has started losing its importance, as countries like Bangla Desh came into fight as they have industry favouring labour laws. Flexibility of hiring & firing is available to them.

Looking at the trend of economic indices, India will shine again. 

Wednesday, 12 March 2014

Make your customers know, what they want!!

Our brain is not under our control. The utmost seat of Lateral Thinking, brain makes everybody go into wilderness; knowingly but most of the time unknowingly. More you wander, more you go deep. This brain wilderness, help in finding answers to many complicated questions; but sometimes it makes everything around very confused & blurred. This wilderness gets aggravated, for corporate citizens primarily, when one has fair understanding of business subjects like Sales & Marketing, Supply Chain, Business Strategies, and Finance etc. In corporate, answer to the very basic question, every other CEO does want to know; what makes a company successful and other fail. Every subject and more so every professional with specialized subject knowledge seems like giving a panacea for challenges coming the way of building a sustainable-successful business or what products can make a company successful in real sense. Benchmark could be Apple, today. 

One day, on my journey to mental wilderness, I confronted the same question, what makes a company successful and other fail. It looked more complex, when I read about the ‘quantity of research’ being carried out across the globe, to know needs of customers and coming out with suitable ‘innovated’ products, continuously to meet these needs with a view to be successful.  The same report says 95% of products fail within one year of their launch. Why so, when we know the needs?

To my surprise, this wilderness helped me in realizing the fact that never a single business ever became successful just because it satisfied the needs of its customers. Yes, there are millions of companies which claim being successful, as they keep either manufacturing some products or providing some services and in return, keep ‘making’ less than average EBITDA, every year. These sorts of companies do every bit to be seen successful on their claim of earning some EBITDA.

Coming to the question back, what does make a company successful? Knowing Customer Needs & fulfilling them? It may surprise you, if I share that all research available reveal that customers do not know what their needs are. Customers indeed, are not having clarity, what they are looking for, in products or product features. They are as confused as corporations. Their needs come & go. They do not stick to their proclaimed needs. Their needs are as fluid & imaginable as their dream are. One does not have any control on them, alike dreams.  Go back in the recent past only; did anyone know about ‘Internet’ becoming so indispensable in our life? Today, whole world is revolving around this. Every other business is dependent on it. You for that matter, take any product or product features that ‘created’ a ‘want’; not becoming huge success?? Did you find any, please let me know, too.

If corporations need to be successful in real sense, then they have to move one level up from, simply trying satisfying needs of customers. Simple customer satisfaction can make a company earn some EBITDA but not success for sure. This EBITDA earning mindset shall lead you for a short while, but be sure it will also take you to your early death date.

Keeping my thoughts intact, organisations have to come up with new product & product features unknown to customers; thus creating or determining needs, instead of delivering on the needs of the customers.

This can very well be substantiated by the success story of Apple; as we all have seen it happening in very recent past.

Steve Jobs’ infamous remark to the question, when asked what all research went into the development of iPad, may help you understand it more. He said, “None. It’s the not the consumer’s job to know what they want.”

Conclusively, defy conventional wisdom of being first to recognize and serve customer needs, to be first in the race; but you yourself define customer needs and criteria of purchase and constantly update them to be first today & tomorrow.

CEOs arise & awake, what you looking for? Often, it is said, the average tenure of CEOs is three years; but sufficient enough to make a dent in the history. Just give a required direction to your organisation and make it move in that direction. History will follow you.

Tuesday, 11 March 2014

Adoption of Dandelion Principle for increasing Profits

Stephen Hawking needs no introduction. To me, ‘he is a scientist by nature, a thinker by passion and a challenger to his physical disability by determination.’

Exclusivity has been in the nature of Human Being. The moment, someone is in majority out of any defined to undefined parameters, people create exclusive clubs for themselves. Since ages, people are discriminated based on such unethical & ‘acceptable by some' norms. Society has revolted on such exclusivity norms in past, time & again, in every part of the world. Still, we see discrimination in every society. Sometimes, some points make me think, does Exclusivity follow Darwin's Law of Survival? But when I introspect, it seems to me, it is not matter of survival but ‘Law of Majority’ that makes it happen, by & large. As majority wields power, people tend to follow it more. Majority could be anything – physical to even beliefs.

However, people have started realizing of late, that this exclusivity, instead of helping, has done great deal of damage to them & to the humanity as a whole.

Back to Corporate, on one end, organisations are struggling to keep their employees engaged; employees on their part getting ‘disengaged’ at any given point in time. Organisations are losing out on employee productivity, at last. There seems to be an unseen struggle going on between organisations & their employees. More serious is the fact, organisations overlook some prospective employees who can fit into some of the ‘slots’ easily and can solve this problem of disengagement. But, organisations are failing to use it to their advantage due to either they do not have mechanisms to assess or conviction to experiment. Organisations, as do people, are following a traditional approach. This approach can easily be overturned for the benefit of the organisations and the humanity if we could learn from the plant Dandelion.

Dandelion is a plant, generally been seen as a weed as it grows out in pristine lawns and agriculture fields without choice.  It therefore is a nuisance in its form to human being. But the same plant or weed becomes a well sought after plant, the moment someone looks for a source, rich in vitamins A, C, E, K and other minerals like calcium, potassium, iron, magnesium & vitamins. A very rich source of mineral, named lecithin which is used in treatment of disease like Alzheimer. We can deduce out of it that it is a context that makes an item usable or not. An item remains an item, always with its usability quotient intact. Only thing which has to be corrected is the context. So is the case with human beings.

When I read in the newspaper, SAP recruited 650 Autistic employees; I could see a silver line on the horizon. If organisations could do their bit well in terms of identifying needs of each job under their umbrella and match with the available competency without any bias; perhaps organisations can overcome, the challenge of having disengaged employees or even attrition. I have seen in organisations, employees are averse to so many jobs because of one reason or other. Such jobs can very well be given to ‘disabled’ people easily. But it is either society or even unchallenged practices that stop organisations to think differently. Organisations, to me, do become ‘disabled’ of not able to think differently.

Modern day, Medical science has given us so many tools & techniques to look into people’s physical  & mental ‘competencies’ which may be little different than normal looking human being but well suited to different organisational requirements to perform their jobs in a much better way. Similarly, physical disability does not make any sense, if a person is healthy and medically as good as any other normal person.

‘Organisations of normal people’, have to think beyond their normal senses to change the context & take ‘normal but seen abnormal decisions to build ‘Inclusivity’ and help themselves to perform & achieve better than targeted financial numbers. Ultimately, organisations are in the business of making profit and not discrimination. Isn’t it??

Saturday, 8 March 2014

Competitive Advantage thru' Non-strategic Purchase in B2B

'Do not overlook your Non-Strategic Purchase'

Traditionally, companies in B2B market follow a distinct operational approach in every sphere of business. I frankly speaking did not come across any specific reason accept the feeling given that the company to company business has a different conducting relationship? Is it true? Lets us examine it.

What happens in a business transaction between a buyer and a seller in B2C?  A buyer looks for a product and its inherent value, able to satisfying his extrinsic or intrinsic need & does try paying as less as possible so that the maximum possible price value he can be extracted from the transaction. The seller, in turn, tries attracting the potential consumer with the product features & his non-price value benefits for levying maximum possible charge on it. Inherent force application is maximum realization at both the end of the transaction.  Is it different in B2B?  As far as my understanding goes, only difference is, it becomes stronger for higher & higher benefits at lesser & lesser price. Rationale is that at both the ends, you see ‘Business Men’ vying for ‘what more’. At both the ends, you see professionals fighting to prove their mettle to their respective organisations. So, from business point of view, I do find same business relationship.

It is therefore not advisable to differentiate any of business decision as relatively less important whether in B2C or B2B. But, practically, you see it happening around us. Reasoning behind given is that we are in B2B business. One such differentiation in business decision making is seen in the area of purchase. It has been seen that organisations do differentiate between ‘Strategic Purchase’ and ‘Non-strategic Purchase’. Non-business purchase is seen as less value adding proposition in overall purchase department. But, the case is different today.

Today, companies in either of the businesses - B2C or B2B are under tremendous pressure to remain competitive on Price and Product Features. They have to look for ‘business partners’ in the form of suppliers who can meet their basic specifications and price. Mounting pressure has made companies to invariably ask for ‘what more’ besides price & product features from their suppliers.

It has been seen in a research that companies as a practice even strategies to ask for ‘what more’, primarily in strategic purchases and not in non-strategic purchases. Such a differentiation can be detrimental to a business if allowed, research says. Generally, it has been seen that whenever a supplier encounters ‘what more’ query; his innocuous answer is his re-emphasis on value of his products/services or at the best ‘price-cuts’. Re-emphasis here means supplier offering product features which go beyond the specifications of the buyer’s need and his seeking premium on it. Other thing which is seen is that ‘price-cuts’ being given ‘quire easily’ if the buyer persist on his demand of ‘what more’.

But, study reveals that if price-cut is the requirement, it can be easily achieved through ‘Reverse Electronic Auctions’. Moreover, supplier’s inability or hesitation on not reducing prices further is not believed by purchase managers and they on their part, put in contracts, stiff penalties or resort to cutting corners, compromising the quality. Leading finally to lose-lose for both the parties. Detrimental in nature!!!

However, it has been my belief for long that if both the parties come together and ‘collaborate’, perhaps each one shall be benefited out of it. My belief got long desired conviction when the recent research proved it.

It has been found that ‘exceptional suppliers’ can charge ‘premium’ on its products by laying down a process of finding, vetting and developing ‘justifiers’. These justifiers can be grouped into three distinct categories:
i.              Efforts can be made to identify how customers actually use the offering products or their features. In this category, suppliers generally do ask buyer companies, ‘how can we be better supplier to you?’ and do provide solutions.
ii.             Suppliers holistically look at entire purchase range in the non-strategic purchase category of the customer company and try combining them for value addition.
iii.            Suppliers at their end, align their products and services with the ‘priorities’ of the customer company.

But, take note of the fact, nothing comes free. Suppliers and customer companies have to be ‘collaborative’ in their dealings and be ready to bear additional cost.

At last, ‘Buyer Companies’ do not let ‘non-strategic purchase’ hurt their business objectives. It can very well help in giving highly sought after ‘Competitive Advantage’ a company may be aspiring for; just employ right people with right focus.

Friday, 7 March 2014

EGO: Makes you fail, eventually!

Specific attributes or characteristics which differentiate a person with others and can make a person to be seen as a Talent and not others, are the building blocks for a person’s success or failure.

Therefore, often referred to word ‘Talent’ means soft skills, nothing else. We may refer to it, in general parlance as an ‘attitude’ too. In corporate, you would find ‘Technical’ persons vehemently trying overlooking the importance of it. So much so that pressurizing a management crumble under the pressure. My belief here is that people know the importance of soft skills, but personal biases come their way to accept it. Simple reason, acceptance may devoid them of getting ‘vertical growths’ or more compensation without having required skills. Personal Interests!!! Personal interests to make companies fail.

I mentioned about the ‘Talent’ in a different context in one of my previous blogs. Point there, I put forth was that there is no shortage of any talent except if managers do not do their job judiciously of identification of right competencies in their subordinates and developing them as per the requirements of jobs. My understanding of the subject is that every human being is a talent; only point to look at is the fitment with a role or a job. If employees are looked at their ‘natural abilities’ and are fitted into right roles & responsibilities; perhaps, you will see more & more talent coming up on the surface.

Trigger of my writing this blog, however, is a story published in a leading daily-The Economic Times about the new CEO of Microsoft. But, what happened behind the scene while choosing Nadella, caught my interest. The story talked about reasons of Steve Ballmer stepping down as CEO and why Allan Mulally, a very successful CEO of Ford; not becoming CEO of Microsoft. Common reason – Soft Skills.  

‘Ballmer’s, as quoted in the newspaper, ‘relations with the board hit a low at a June meeting when he shouted ..........’. The story further goes, ‘Ballmer was so loud that day in June that his shouts could be heard outside the conference room.’

A further mention in the coverage refer to, ‘They (board) were frustrated by his tendency to talk more than listen and his reaction to push back.’

Another reference made in the story is about Allan Mulally, Ex-CEO of Ford.

Allan Mulally who was the best fit for the role;  as Microsoft on its part prioritise management skills over a technical pedigree and has shown his ‘Talent’ well while as CEO of Ford in saving the automaker without resorting to bankruptcies or bailouts; failed to become CEO finally. Reason, his ‘soft skills’ made him fail. Why?

As quoted in the coverage, ‘In the process, Mulally’s ego got in the way. While he met with members of the search committee and expressed interests in the job, he refused to formally interview.’

Highlighted words – shout, reaction, to talk more than listen, ego etc are personal attributes what differentiate a person as a talent.

The point here is that both of them, very successful ‘Executives’ failed eventually to their personal attributes. Ballmer & Mulally became victims of their own soft skills of not able to handle their anger, frustration, ego etc.

People may ponder about what initially made them to be CEOs & so successful. My answer to this is that they might not have allowed their shortcomings to come up or at best, they were not having that ’EGO’ of being ‘Ballmer’ or ‘ Mulally’.

Basics to drive out from this illustration is that qualification, experience etc may make you grow but not successful. It is your soft skills – the real talent which make you successful.  As one CEO said, ‘there are thousands of people who may be more or equally intelligent, but could not climb the ladder of success because of their behavior.’

Ego, the image of yourself created by yourself, which you accept as your permanent core, and which you serve as if it truly has an objective existence. Ballmer & Mulally failed to see ’Ego coming in their way of success.

Wednesday, 5 March 2014

‘India Story - 2’ getting released in June-2014. Watch for it!!

Is India story over? Somebody asked me in one of the ‘Intellectual discussions’ I was part of. I said with all conviction, NO.  My basis at the time was the often quoted saying, ‘Every one learns from mistakes and so will a country. A country, to my belief, is a living entity; so is India. India will surely learn from its experience of last few years. But, frankly speaking I did not have any substantial reason of my saying no, except my conviction and above phrase. I believe in ‘Gut’ Feeling. Guts more often than not, come true.

I started looking for reasons to check my conviction, however later. I could find.....

India grew with the ‘Hindu Growth Rate’ of about 3.5% for the first fifty years after its independence, followed by ‘Accelerated Growth Rate’ of 8-10% annually. Then, came year 2008 with a centrifugal force that threw every other country out of gear including India. So, there was nothing unusual with India story. Only one thing what made us pessimistic was, financial & economical reasons got blurred with our ‘Societal’ misgivings. More so our hunger to make quick money, perhaps ‘corrupt money’. Although money has no face, still I feel like giving the name. If I for the time, remove this societal part of the story, rest reasons were dealt with - some may say appropriately, some may so no. A point for ‘political’ debate, but for sure, not for intellectual one. At the same time, I am not hesitant in saying; story would have been very different, if we would have taken few more ‘different’ steps, as we are country of courage & vigour.

First part first!

India is a country of 125 crores people. A strong customer base, no country can put off its eyes from it. No developed country in particular, can think of keeping its economic success story intact without India in it; for two basic reasons. One, manufacturing due to industrialization, a very strong base for developed countries for almost two centuries has started sliding downhill off late because their manpower has become expensive. More complex became the situation as their manpower was not willing to work in factories and became unavailable for 'manufacturing jobs'. Further, manufacturing cannot pay and sustain higher compensation to its manpower like new age industries, as raw materials & processing cost etc was making their Cost of Production unsustainable for them. Therefore, there basic foundation of industrialization success has become shaky. People of developed countries have moved forward as their education and lifestyle supported it differently. They started looking for fields, needing more grey cells and can get them earn more money. It thus means these countries have no choice but to turn to countries like India, having cheaper, English Speaking, young and ‘not averse to hard working’ manpower for providing manufacturing base for them. Developed countries have no choice; if they want to provide even basic amenities to their population at ‘reasonable price’. Even I forget for time being the price as a reason, these countries have limited people willing to work in factories. ‘Glocalisation’ too provided the seamless integration of the world. New age transportation facilities came in handy. Things became more favorable to India, as it started providing technically trained manpower to the world. Moreover, India is a big customer base for developed countries with unique proposition of stable democracy. They have no reason left but to come back to India with their invest plans.

Do you see any change in conditions quoted above today after 2008 turmoil? No, to my understanding. People may see it differently. The developed countries have no choice but to look at countries like India to remain floating in their countries.

Another compelling reason for my positive outlook is – Country culture of saving. Internally Indian population is hell bent to save at the cost of their own life. With 30-35% saving & investment rate and higher productivity, the country has easy capital to invest. So, we have capital, manpower and even will to work. Only support we look for is from Govt & its Machinery.  ‘Any govt’ for a reason cannot remain aloof to this feeling. ‘Public’ outrage shall not leave anyone remain inactive for long time.  It is Public, by the way. It is democracy, by the way. So hang on; India Story-2 is imminent. Fasten up your belt tightly; we shall be flying again, together.

Coming to second part; Yes, things would have been little better, had we handled ourselves in a more matured way on following points:

1.       ‘Political Will’ of various political parties to counter their hunger for being seen differently in the eyes of the public.
2.      Reforms in the areas of Labor & Taxation, simplifying process and systems for better industrial growth.
3.       Redefining & re-emphasizing role of Agriculture in the overall Indian Economy in times to come.
4.       Introduction of GST to make movement of goods within the country easy and seamless movement outside too.
5.     A common face of Finance Ministry & RBI on Monetary Policy of the country. No room would have been given to personalities to vitiate from ‘doctrined’ principles of the subject.
6.       All round efforts to curtain Inflation menace and not RBI alone fighting to curb it by 13 smaller changes; giving unnecessary reasons for negative  talk to general public.
7.       Govt focus on infrastructure development where seeking private interests would have been difficult or near impossible.
8.       Equal focus on creating new infrastructure and maintenance of old. Like new roads vs new. Power generation etc.
9.       Handling subsidies more maturely.

10.   You can add more.......