tag:blogger.com,1999:blog-77906487120795912572024-02-08T06:52:08.130-08:00Strategy Musingscb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.comBlogger371125tag:blogger.com,1999:blog-7790648712079591257.post-17896452031449581102016-06-12T09:09:00.000-07:002016-06-12T09:09:34.953-07:00Leadership’s Five Worst Mistakes to Avoid<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-size: 12pt; line-height: 115%;">Leadership is
looked upon as the ultimate capability to succeed. Leadership is unique in that
its success comes from the success of the teams that leaders lead. Leadership
is, therefore, nothing but influencing the teams to perform to their full
potential. Leaders typically possess a set of skills and attributes which they
deploy in certain styles to lead the teams. Though leadership is, in part,
contextual the broad set of leadership competencies remains the same. Many
times leadership is based on excellence in a few attributes relative to others.
The attributes of relative excellence could be any or some of the following
(illustrative): conceptualization, strategy, decision making, execution, public
speaking, memory, agility, perfection, empathy. The ability of the leader to
influence his or her team members to succeed, based on such attributes, creates
a leadership charisma.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Leadership
charisma reinforces the success competencies of a leader leading to a virtuous
cycle of success and charisma, in an ever increasing trajectory. Along with
that comes a sense of infallibility and invincibility, fuelled by relative
superiority. In some leaders it just remains as a streak and in some leaders it
starts becoming a dominant stream. When the latter happens, leaders start
committing certain mistakes with the assumption that their supremacy is
unchallenged. This approach, in the long run, becomes counterproductive to the
leaders and their organizations because, more often than not, the team
comprises potential leaders who with time and given the space could step into
the leader’s shoes. The sense of relative superiority, which is a result of
self-perpetuating cognatic bias of a leader, prompts him or her to commit certain
mistakes. Discussed below are five of the serious mistakes a leader can ever
make, and should never make.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Competing with team<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">This is the
most common mistake successful leaders make. A wise leader recognises that his
direct subordinates could be better than he himself is on certain attributes
and together the reporting team could be better than the leader. This awareness
amongst the subordinates develops based on individual and team successes and
group collaboration. A leader who is always out to prove that he is superior to
his team would hardly give credit to his team for successes. A leader who is
always attempting to prove his superiority over his colleagues ends up using
his positional power to achieve this, given the fact that he may not be
intellectually superior on all counts. There are several negative consequences
of a leader competing with his team.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Firstly, the
team becomes acquiescent, if not obsequious, denying the organization the
benefit of collective wisdom. Secondly, it places too much power in the hands
of one individual who has started trading his wisdom to aggrandisement.
Thirdly, the broader organization becomes centrally driven diluting the
authority and relevance of a whole team of leaders. Two things happen as a
result. Potential leaders become blind followers, passive aggressors or take up
early exits. By the time the leader and the Board come to realize the folly,
mostly through some failures, they would find that the organization has no
potential leaders. Eventually, the reputation of the leader as a concentrator of
power would inhibit entry of external leadership talent.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Joker(s) in the pack<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Though not very
apt, the leadership team can be seen as a pack of cards utilized by the leader
to win the game of business competition, majorly through skill but partly also
through luck. As we know, the joker card which has no sequential or set
attribute has enormous value to be used as any card to make a set or sequence.
Leaders tend to have a team member who is loyal to the core and who fulfils the
role of a joker in the pack for the leader. It is not uncommon even in great
corporations to have a joker in the leadership pack; they do contribute to forward
movement by adding their word (usually at the behest of their leader) to
certain solutions desired by the leader. The trouble arises when the leader
tends to have too many jokers in the pack.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Like in a card
game, too many jokers in the leadership game rob the game of business any competitive
strength. A leadership team filled with members of blind loyalty, even with substance,
would add little to the long term strength of the company. Very soon there
would be no issues to debate and no decisions to make. A leader who fills his
pack with too many jokers would find it difficult to reconstitute the deck even
if wisdom dawns on him because unlike the competent ones jokers tend to stay on
for a lifetime! There is probably only one way to deal with an excess of
jokers; offer them sinecure positions and make them lead inconsequential
non-mainstream divisions.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Drawing the blinds<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A company, more
so its headquarters which houses its leadership team, is like a cozy home. It
stays in its community (the supply base or the marketplace) but also could be a
mini-community by itself. It is important for any house to draw in, from outside,
sunshine and breeze so that the residents are healthy. A home may protect its
residents but unless residents go out and are able to live their external life
they would eventually become weak. The fate of headquarter leadership is also
similar. Unless leaders undertake periodic viewing and listening tours in their
fields they are likely to be isolated, and lose their touch with competitive
pulse. Being blinded to realities is the worst handicap that a leader can
inflict upon himself.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The third
mistake leaders commit is to draw blinds on their homes, shutting out the view
on and feel of outside developments. Artificial light and air conditioning may
not only substitute the natural sources and be more comfortable. They may even
give a false sense of control over them. They are, however, expensive and
inappropriate; like artificial light can never help in vitamin D synthesis in a
person as natural sunshine does. A leader who runs a headquarters that is
isolated from its environment does more harm than good to the vitality of the
leadership team and agility of the company. It is not enough for one or two
potential leaders to foray into the environment. There must be continuous
openness for all the team members. <o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decoupling with peers<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A peer is
someone at one’s own level. A leader, if he is hierarchy bound, and in addition
has a mistaken feeling of superiority may never see anyone as his peer. It is
important for a leader to appreciate that aspirant leaders who are one level
below him organizationally, and even managers several levels below, can be
peers based on intellectual capabilities. Organizational structures and
processes are designed, despite their bureaucratic nature, provide several
opportunities to couple with executives, managers and leaders of shared or
overlapping processes.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The fourth
mistake leaders commit is to decouple themselves from their peers despite organizational
opportunities. Decoupling occurs in two ways; one is going through interactions
in a mechanical manner and the second is to build silos around himself and
allow other leaders to build silos around the divisions they head. Leaders who
think of themselves to be superior or carry needless burdens of their weaknesses
tend to deliberately decouple themselves from their peers; hierarchial or
intellectual. A leader who does deliberate decoupling only downgrades his potential.
<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Tunnelling the vision<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Leaders are
charged with a rather sublime duty of conceptualizing a vision. Vision is not a
definition of a future business. Vision is more an expression of how a business
would build itself and endure over a really long time. Apple’s vision is to
lead a digital revolution. Google’s vision is to organize all data to be
useful. Microsoft’s vision is to seek diversity and inclusion in its business.
Ikea’s vision is to create a better everyday life for people. Amazon’s vision
is to be the world’s most customer-centric company. General Electric’s vision
is to bring good things to life. Vision, in a way, represents a superordinate
philosophy of a company. A leader’s differentiation will be evident in the
nature of vision statement. </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The fourth
mistake of a leader is to tunnel a vision; an oxymoron of sorts. Vision needs
to be expansive as open sky horizon and capable of lasting in perpetuity.
Expressing a vision in terms of products and businesses is a hallmark
characteristics of leaders with tunnel vision. This leadership mistake
restrains an organization from absorbing its fundamental purpose and
establishing a perpetual connect with its stakeholders. It is not expected that
a leader should develop a vision by himself. If the leader does not make the
mistakes mentioned earlier he would be in a position to develop his leadership
bench, bring out their inner and innate potential, and seek contributions from
his team members to develop awesome vision. <o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Board role<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The role of
apex leaders, among many other important things, is to be a model of
leadership, and keep organizational processes on track. If the apex leaders,
the Chief Executive Officers and other C-Suite Officers, themselves make any or
all of the above five mistakes, it is difficult for others in the organization
to correct such leaders. As mentioned earlier, the subordinate leaders and
managers may just comply or exit. If leaders do not realize the need to avoid
the five mistakes, the Board of Directors becomes the only hope.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The Board is
the institutional framework that can mentor and coach the apex leaders to live
their leadership role in totality, avoiding the above five mistakes. To be able
to play that mentoring role, the directors on the board themselves must be
seasoned and wise enough to understand the five mistakes that leaders could
commit and they themselves should not have committed them. The Board’s role is
not just review of performance, or even ensuring governance but is enabling the
apex leader to do the right things and avoid mistakes, and reach the fullest
potential. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on June 12, 2016<o:p></o:p></span></i></b></div>
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<br /></div>
<br />
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<br /></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com3tag:blogger.com,1999:blog-7790648712079591257.post-75633744665654911372016-06-06T09:38:00.000-07:002016-06-06T09:39:20.731-07:00‘Bull-Bear’ Rollercoaster of Indian Stock Markets: Mitigating Behavioural Irrationality by Informational Rationality<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-size: 12pt; line-height: 115%;">Stock markets
are considered to be the ultimate barometer of investor confidence in a
nation’s economy. A healthy and vibrant stock market helps small investors of a
nation make gains that can beat inflation in the long term. Indian stock
markets have opened up to foreign investments after liberalization, and over
time this has resulted in the Indian stock markets getting coupled to global
markets. Foreign institutional investors (FIIs) determine to a large extent the
ups and downs of the Indian stock markets based on their inflows and outflows.
FIIs have a global canvas to invest and their relative allocations amongst
countries and relative shifts have a profound effect on national stock markets.
What happens in the Indian stock markets is thus a combination of domestic
factors and global factors.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Indian stock
market regulations have, over the years, been progressively reinforced and refined
with greater operational disclosures and better governance standards.
Opportunities have been enhanced for public participation with prescription of minimum
public float, both for public and private sector companies. Norms and
procedures for initial public offers (IPOs) and follow on public offers (FPOs)
have been streamlined with measures to avoid locking up of small investors’
capital. Easy listing norms for startups are also on the anvil. Despite all
these measures, the Indian stock markets continue to be infamous for the rollercoaster
rides and unexpected bull and bear cycles. Some experts opine that Indian stock
markets are predominantly news and operator driven, and do not always carry a
healthy correlation with either the state of the economy or the level of
performance of companies.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Bull-bear
<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Stock market
analysts tend to simplify market movements to bull or bear cycles which take
place under the sunshine or storm, respectively, of global macroeconomic
developments. Stock market analysis is one domain where analysts’ moral commitment
to what they say is notoriously weak, and correspondingly where public memory
is notoriously short. Around an year
ago, analysts spoke of Sensex (Indian stock market benchmark index) crossing
the 30000 mark effortlessly by end-2015 and even doubling itself in three
years. In January-February 2016, however, all of them began talking of an
imminent crash to around 15000 mark. Again, this June there is talk of a
secular multi-year bull run. From time to time, there tends to be much emphasis
on an invisible collective bull power or bear hug of the markets rather than on
the performance of industrial sectors or companies; inevitably there is no
accountability on missed forecasts. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Events in
economy become outcomes in markets for operators. The markets witness exuberance
whenever favourable announcements are made on economy, fiscal policy, monetary
policy, foreign investments, monsoons, and so on. On the other hand, any
perceived adverse news in such matters leads to gloom. In doing so, markets price in expectations
that cover one year plus outcomes in just that day’s or that period’s price.
This is an interesting feature of behavioural finance that makes people respond
to momentary data in a compulsive manner. When a whole universe of investors
goes berserk in that manner, sudden bull and bear formations take place with
current price-earnings (PE) guideposts thrown out based on future PE ratios and
people wanting to have (or get out of) their share of the market at any cost.
There is no mechanism yet of how the bull and bear impact can be circumvented,
except the Buffet way. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Behaviour<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Warren Buffet
is considered to be the most successful investor in this world. Buffet says he
is never influenced by generic trend of the markets being in either bull or
bear grip. He does not look for short term sharp returns. Instead he buys into
companies and managements based on detailed internal information which is available
to him as a large investor in a perfectly legitimate way. Not all will have a
large portfolio nor the deep information to do a Buffet act on a retail basis.
Most will also not have any time to analyse or grasp the key issues. Given
these limitations, what one can do is to understand the nuances of behavioural
finance and mould one’s approach towards the markets accordingly, understanding
one’s life goals and one’s intrinsic limitations. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Professor
Daniel Kahneman who won Nobel Prize in economics in 2002 for shattering the
assumption that economics is rational has a lot to say on economic behaviour of
individuals. His life’s work is anchored in studies showing that people are
irrational. His works argue that people are prone to “cognitive biases” and
“systematic errors in thinking”, made worse by chronic over-confidence in their
own judgement – and the less intelligent they are, the more militantly certain
they tend to be. Very relevant to stock market investing are his propositions
that people do not always act in their own economic self-interest. Nor do they
strive to maximize “utility” and minimize risk, contrary to the assumptions of
efficient market theory and the core premises of the economics. He holds that
people are myopic and human brain circuits respond to immediate consequences. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Chance<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Depressing may
it seem, Professor Daniel Kahneman concludes that individual investors are so
persistently incompetent and incorrigible that they fail to recognize their own
economic misbehaviour; they amplify their profits, fail to crystallize their
losses and avoid own up their failures,
leading to a costly asymmetry. Having made these very insightful and
pertinent observations, he offers no solutions either. He holds the funds,
mutual or hedge, which are managed by fund managers also to be susceptible to
the behavioural follies; he concludes laconically that the only thing certain
with funds is their fees, besides entry and exit loads. Universe and stochastic
processes are a great leveller; for those investors who make handsome economic profits
in such asymmetrical investment scenario, there would be an equal number making
precipitous losses. This see-saw of profits and losses reduces stock market
investing by individuals to a game of chance where fortuitous timing and dogged
patience pays, but only to an extent and never in an absolute sense.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A review of
Sensex trends over the past few decades and company stock price movements over
time suggests that the only thing that matters is when someone enters the
market and when he would exit. Apart from the availability of investible
surplus or the urgency of monetary need, the timing tends to be one of chance.
The reason is that markets are irrationally rational. They are rational to the
extent of appreciating a cause and effect approach but they are irrational in
terms of the nature and quantum of response. In addition, there is a huge
asymmetry in information, with no single agency being responsible for holistic
analysis of all the trends that could impact the performance of companies and
markets. When individual behaviour is based on logical asymmetry and is unknowingly
irrational and complacent, the only way to minimize the impact is through
greater information access. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">De-stock, exchange!<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Regulators in
India have done great things in recent years to enhance timely, pre-formatted
disclosures through stock exchange sites. Over the last few decades, exclusive daily
business and economic newspapers and 24X7 specialized television channels to
present daily economic and business information and track stock market
happenings have become very pervasive and popular. In addition, firms have tied
up with stock exchanges to capture real time market data and presented
corporate data to develop multi-layered databases for investors. All this have provided more information at the
hands of investors than they had ever. The issue, however, is with
classification of open source raw information, pricing of analytical
information and access to both types of information. If regulators are committed
to healthy growth of stock markets and protection of investor interests, as
indeed they are, the stock exchanges must establish a non-profit or a
subsidised organization to provide raw and analysed information to all sections
of population on a free of charge basis. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Stock exchanges
are the platforms with daily turnovers in the range of Rs 20000 crore
approximately while a few hundred crores are collected annually through
transaction taxes. Stock exchanges should utilize a fraction of the funds
generated to provide to the investors the following: (i) a daily information
newsletter including all submissions of the day, (ii) a daily newspaper
providing corporate performance data, (iii) a television channel which provides
stock market and company performance data (without advertisements, interviews
and induced biases), (iv) a mega portal which provides company and stock
performance data in raw form, classified into large, medium, small and micro
sectors in each industry as well as across industries, and (v) an analytics infrastructure
which analyses the raw data in terms of multiple analytical formats and trends.
If stock exchanges feel that any compilation and analysis of data through media
impacts their independent status they can promote an independent corporation to
undertake such activities. De-stocking of the huge amount of information that
passes through the exchanges each day and presenting it meaningfully and
analytically is essential for investors to moderate the travesties caused by irrational
and vulnerable human financial behaviour. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><b><i>Posted by Dr CB
Rao on June 6, 2016 </i></b><o:p></o:p></span></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com1tag:blogger.com,1999:blog-7790648712079591257.post-77529946835159736192016-06-05T05:36:00.000-07:002016-06-05T05:36:13.148-07:00Two Minds Are Better Than One: The Theory of Twin Leaders<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Management
processes are developed over time to facilitate, enable and ensure success.
Organizations create departments around functions and identify managers to lead.
Organizations are also corporations with departments, all headed by CEOs as
singular leaders conducting corporate management in the quest for success.
Organizational practice, over time, also got concerned about vesting singular
powers in individual managers and leaders, and has tried to use departments as
mutually critical of each other while requiring them to be collaborative.</span><span style="font-size: 12pt; line-height: 115%;"> </span><span style="font-size: 12pt; line-height: 115%;">Individual managers and leaders are trusted
to deliver through such singular power or face consequences later (Google Nest
is a recent example). Concerns are delayed recognition of failures has led to
organizations being layered vertically and horizontally with departments that
oversee each other.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The zig-saw
puzzle of ‘trust and verify’ is reflected in several organizational structures.
Production produces but Production Planning counts while Quality verifies. Accounting
records and Finance tallies. Internal audit checks veracity of all these
processes. This has been the traditional structure. It has not stopped some
business failures and occasional malfeasance. Investors and regulators became
concerned, and new departments such as compliance, risk management and ethics
came into organizational mainstream. There is another dimension too. In early
days, all departments used to be consolidated into just two broad divisions:
technical and commercial. Over time, not merely due to increasing scale but
also due to avoid departmental cartelization, every department (almost) started
getting a C suite officer. Despite all this, looking at the broad range of
business failures one would wonder if the management processes, as they have
evolved, provide an infallible solution.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Which two?<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The efforts to
find the right balance continued to extend, and that too to the higher levels
of organizations. The Chief Executive Officer (CEO) or Managing Director (MD)
is required to hive off day to day operational responsibility to the Chief
Operating Officer (COO). The roles of Chairman and MD are now expected to be
different. MD and CEO are expected to operate under the superintendence and
guidance of a board of directors with diversity of experience. The Board itself
is divided into independent (non-whole-time) directors and non-independent (whole-time)
directors, independence being related to material pecuniary relationship with
the company of a director over a sufficiently long period of time. In further
addition, the Chief Financial Officer (CFO) is expected to report also to the
Board. An audit committee of select directors of the Board acts as an
independent reviewer of accounts, interacting with external and internal
auditors. And, there exist other board committees for investments, risk,
compliance, and so on. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The audit
committee also acts the ultimate stop for the whistle blowing mechanism in the
company and as an ombudsman of sorts. There are many further nuances, both from
regulatory and company perspectives, which are expected to support the endless
divisions and superintendence. All these mechanisms expect remediation to be
carried out only by the CEO and the other C suite officers who alone have the
day to day knowledge and execution capability. The audit committee and the
board may go through all the internal audit recommendations but will only have
to look at the CFO and CEO to implement the remediation plan. In battles
between heads of production and purchase, production and sales, finance and all
other departments, only those respective departments have to implement
corrective processes. All this discussion leads us to wonder if different
functions, departments or responsibilities that are headed individually are the
solution (or the problem?) and something else is the problem (or solution?). <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Root cause
<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The root cause
for bad performance is usually bad decision or bad execution, or both. Without
addressing the root cause for bad performance mere structural redefinition
would not help. Better processes do help to an extent but essentially,
individuals need to be better at decision making and execution. There is one
reason other than leadership skills as to why leaders do make bad decisions or
do turn bad at execution. That reason is that leaders are also human! We may
aim to achieve precise and clinical leadership through various efforts of
leadership development. However, leaders as humans are subject to pressures,
internal and external as well as biases, internal and external. While it is
part of leadership skill set to be confident and objective (which should
address issues of pressure and bias, respectively) it is indeed humanly
impossible to be extraordinarily virtuous. It is, therefore not uncommon to see
even seasoned leaders wilt under pressures of the Street or get mesmerised by
their own pet ideas.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">When the issue
is within the native profile of human behaviour, there is only a limited
alleviation that organizational structures and processes can offer to offset
the impact of pressures and biases; particularly when such structures are in
the nature of dividing responsibilities, and reviewing decisions and actions sequentially.
The key here is that the primary
decision or execution is singular by an individual; so is the secondary review
of decision or execution. Though review by a board is plural it is also a
post-facto delayed quarterly review of singular decisions or actions. It is
important to enable challenges, debates and superior outcomes in decisions and
actions. This cannot be achieved just through a discussion between the boss and
his subordinates as the former eventually displays positional power and the
latter eventually succumb to career growth issues. This cannot be through peer
level discussions either as peer groups tend to eventually “live and let live” rather
than aim at the best outcome. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Two minds<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It is often
said, “Two minds are better than one”. In fact, the concept of synergy lies in
being “One plus One becoming Three, rather than an arithmetical Two”. The first
is a typically social adage that implies that two minds can bring to the table
viewpoints that would not be obvious to just one person. The second is a
typically corporate adage implying that when two minds get together some sort
of catalysis takes place. There is a saying related to individual experience
that plays spoilsport though: “I am in two minds”! In corporate setting,
indecisiveness is frowned upon. This has been one evolutionary reason why
singular authority has been encouraged in all organizations. As we have seen in
the earlier sections, this concentration of power has the potential to lead to inappropriate
decision making or execution. A bold new experiment could be to have two
leaders responsible for a single function. For example, key functions such as
Finance, Operations and Commercial could have two equally titled top executives
lead each of them. All decisions could be taken and executed only by the two
together.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The rationale
for two minds taking one decision or supervising one execution is clear: two
minds are better than one, especially when the function is too complex to
decipher or when multiple solutions require multiple viewpoints. Having two
equally endowed executives enables each of them to overcome their pressures and
biases through the critical thinking of others. Having another powerful
co-sharer of decision making and execution enables the two member team take
bold decisions which each individually would not probably be taking. There are,
of course, risks that the two leaders could form a conveniently colluding
cartel rather than critically thinking team. As long as this two member team
concept is not limited to just one function but covers a few other important
functions besides the CEO role itself, the risks of such cartelisation would be
low. There would be higher costs associated with the concept but can be
overcome with greater infallibility and greater value building through such pooling
of strengths.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Left and right<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The general
approach in a Twin Leader deployment could be to select them based on
complementary domain skills. For example, of the two to head the commercial
function, one could be a sales oriented leader and another a marketing oriented
leader. Of the two, heading the finance function, one could be a growth
oriented fund raiser and another precision oriented cost accountant. In the
operations domain, one could be a production expert and another quality expert.
At the level of CEO itself, one could be conceptual and another analytical or
one could be thinker and another implementer. The logic is that by putting
together these skills at the leadership level one gets the best domain
leadership capability. There is much to support such a skill based approach. There
is another approach too that could be very viable that is rooted in
neuroscience.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Ever since
Roger Sperry, the 1981 Nobel Laurate, brought out the concept, lot of research
has focused on lateralization of brain through left brain and right brain
functionalities. Right brained individuals are expected to be more intuitive,
thoughtful and subjective while the left brained ones to be more logical,
analytical and objective. It is not that the two sides of the brain are completely
compartmentalized; the brain does work together with the various parts of the
brain including the left and the right conversing through the corpus callosum
which joins them. The point here is that the twin leader approach has an enormous
potential to bring together not only complementary domain skills but also a
winning fusion of intuitive and logical, thoughtful and executional, and
subjective and objective skills that are so essential to accomplish top-class
leadership. If organizations look beyond the immediate costs of twin leadership
approach, the organizational value that could accrue would be immense.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on June 5, 2016 <o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-88906002898429614602016-06-03T05:31:00.000-07:002016-06-03T05:31:36.814-07:00On the Competition Highway: The Perspectives of Two Bahns<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Business
highway is a theoretical concept of businesses traveling over time towards
their destinations on certain pathways. While each company has its own goals,
more often than not several companies, constituting an industry, tend to travel
together along the same business highway. The reasons are simple: every company
in an industry faces the same huge market that appears bountiful on the distant
horizon and every company has only a defined set of prime movers to take them
towards the destination. The nuances we speak of in terms of product
positioning, market segmentation and so on are efforts to define motels and
hotels on the highway to rest in the quest for market dominance. Those who take
their rest as the endpoint in journey risk becoming marginal players in a
subset of the large market.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">When a company
starts as a monopoly, the cruise seems to be smooth and unchallenged. Companies
take their time to build up speed, and after certain periods of acceleration
and deceleration, could stay on their chosen speed level. In certain industrial situations of perfect
duopoly, two players tend to travel together in a certain equilibrium without upsetting
each other unduly. In most industrial situations, however, competition starts
coming up. Dots in the rear view mirror become, new speeding competitive
businesses zipping past the monopoly or the duopoly businesses. Academic gurus
and practical leaders dedicate their lifetime understanding the dynamics of
competition and developing constructs to stay ahead of competition. The fallacy
in competitive strategy is that everyone has the same access to theories of
competitive strategy and can operate in similar ways to meet their strategic
objectives. Much like automobiles, businesses drive through rear view and front
view.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Rear view<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The essence of
rear view in driving is to be watchful about vehicles overtaking us. The rear
view strategy in business also works much the same way. As in safe driving, it
requires the driver to focus largely on the way ahead while casting darting
glances at the rear view mirrors. Each car has two rear view mirrors; the right
one near the driver (in right hand drive vehicles) is the primary one to be
watchful about overtaking vehicles (competitors, in a business context). The left
side rear view mirror is helpful to be watchful of those who seek to overtake
from the wrong lane and also help the driver assess how he is pulling ahead of
competition as he overtakes. To make effective use of the rear view mirrors and
not to be blind to relative speeds, it is important, without doubt, for the
driver not to have glaucoma (and for businessmen not to have tunnel vision).<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The highway
cruise is a game of lead and lag. Over time, drivers in autobahns learn to
maintain a distance in equilibrium or get used to an iterative lead and lag in
disciplined lanes. They also confirm to lane discipline, by and large. While
the destination remains the goal, the preoccupation of the driver’s mind is in
preserving a competitive but collectively safe ecosystem. The leads and lags do
help in arriving at the goals but miss the larger picture of if one is on the
right lane. In business too, when one is preoccupied with competitive leads and
lags, the businessmen tend to lose track of the broader picture. Much attention
is paid on watching the rear view to take care of the zooming competition, and
ensuring the lead. Business race is not one in which a few market share points
matter (as seconds matter in a car race). What matters more is an unfettered
view of the spaces ahead for businesses to continue racing ahead. </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Front view<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It goes without
saying that the front view is far more critical than rear view in driving. The purpose
of front view is to seek a clear road, be mindful of signages, and avoid safety
risks. In business too, front view ride is critical but cannot be curtailed
like in road cruise. It is important to look far ahead and visualize the path. Verdant
spaces to drive in are important. The trap, however, is that business
managements very quickly convert the long term visions (strategies) into short
run journeys (budgets), and become watchful drivers. Agility, if at all, is
shown in overtaking the vehicle (business) in front rather than in considering
a quantum jump to a distant destination. As with rear view, soon the drivers in
front view too get into a comfortable equilibrium with the road ecosystem. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Many times, the
best of views is disrupted by inclement environment; while the vehicle or
business may have the best of navigation aids, prudence demands slowing down
till the weather clears up. A road warrior understands the physical limitations
of an inclement environment but a business warrior takes really a long time to
feel the impact. All of these do not matter as much in a crowded bumper to
bumper traffic condition or in a fragmented industry environment because speed
is controlled by default. That said, it would be somewhat facile to assume that
a leader who is well tuned to disciplined yet agile driving on the road would
be equally so in a business highway. On the contrary, there are critical
differences in how leaders conduct themselves in the two bahns of roads and
businesses.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%; margin-left: 36.0pt; text-indent: -36.0pt;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Two bahns<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%; margin-left: 36.0pt; text-indent: -36.0pt;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">While both automobile
travels and business travels are physical, the latter gives a vicarious feeling
of virtual state. As a result, the business leaders who drive on the business
highway tend to be far more freewheeling than the driver on autobahn. The results
in an autobahn are instantaneous and physically experienced, whether positive
or negative. In business bahn, however, the results take time to deliver and
the careless driver is insulated from the likely impact. This fundamental
difference makes well-groomed and disciplined leaders to be casual, careless and
even undisciplined on a business bahn. Leaders who would be deeply aghast at
liberties taken in physical driving would not only wink at liberties taken
nonchalantly on business bahn but also be unmindful of the damage being
inflicted on the business ecosystem. Leadership exhortations such as ‘making
one’s own path’ can be easily twisted out of perspective to go berserk on business
highway. Unfortunately, the impact of reckless driving on business highways
gets known only after the drive is nearing to a serious crash.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A vehicle needs
fuel to cruise on the autobahn. The faster you drive and the longer you drive
the greater is the fuel consumption. The best bet lies in having a vehicle with
a larger fuel tank and better fuel consumption; such an envelope only postpones
the limitations but never eliminates them or avoids the need for refuelling. Like
automobiles, businesses need the fuel of profits to run; so does everyone
believe. In reality, businesses need cash to run. Profits are virtual fuel, an
accounting fuel in a manner of speaking, that lets businesses keep on running
despite losses (and even cash losses) through a variety of props of diverse
financial instruments. It is important that businesses appreciate the
importance of cash as the only fuel that can sustain deviant or careless drive
on business highway. The processes of management have put in place a number of
checks to ensure appropriate governance (much like speed governors, ABS and
safety checks) but the way bankruptcies and stressed assets blow up in India
and elsewhere indicate that the drives on business highways need a different
perspective for future.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Autonomous driving<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The automobile
industry, nay the road transportation sector, is set to be transformed with the
experimentation and eventual maturation of autonomous driving. An autonomous
car (also driverless car, self-driving car or robotic car) is a vehicle that is
capable of sensing its environment and navigating without human input. Autonomous vehicles detect the surroundings
through radar, lidar, GPS, odometry, computer vision and soon with artificial
intelligence. They are equipped with advanced systems that interpret sensory
information (including reading signages) and navigate the paths towards
destinations, overcoming obstacles. What this implies is that man-machine
interface through breaking systems, speed governors and safety devices is considered
inferior to a completely machine controlled drive. Autonomous driving is both a
tantalizing misnomer and a perfect descriptor, in parts. Conceptually, giving
an automobile complete autonomy from the free thinking human being is
considered to lead to better navigation, safety and efficiency for the vehicle
and its passengers (besides accommodating one additional person in place of the
driver)!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Well for
businesses too, all the wisdom from the stakeholders to advocate prudential
norms and all the efforts from the regulators to put in place governance
standards are akin to the meters and governors, with all their bells and
whistles, embedded by the designers to enable smooth and safe functioning of an
automobile in the hands of its driver. Just as these have been found wanting
and autonomous driving is the new goal for safe autobahns it appears that businesses
that are algorithmically driven and are autonomous from the inducements,
aberrations and compulsions of human enterprise could be the new norm for safe
driving on business bahns. Conceptually, a machine controlled business would appear
to be completely antithetical to the idea of free enterprise but with the
strides being made in artificial intelligence businesses may be run faster and safer
as well as more profitably and more prudentially by machine controlled
algorithms! The advantages could lie in terms of better regulated investments
and expenditures with greater business assurance!!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
</div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on June 3, 2016<o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-55452576959334859472016-05-31T09:13:00.000-07:002016-05-31T09:13:43.343-07:00Advertising as Association: Warranty as an Open Card<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Every wakeful
moment of ours there are two things that keep happening invariably. The first
is that we continue to be ever so unaware of our real internal selves. The
second is that we become constantly ever so aware of external things which are
not necessarily real. The first is related to the ego that we grow with. The
first is not the focus of this blog post. The second is related to a ubiquitous
phenomenon called advertising. What began as a management process to provide
information to those who need has become a managerial process or profession by
itself. When we see a newspaper today we see more advertisements than news.
When we view electronic media, we see already broken stories that are further
fractured by advertisements. When we go through any event, we encounter
directed self-promotion rather than genuine public purpose. Everything in life,
including organizational life, seems to be anchored around mutual
advertisements.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Advertising may
be defined as the non-personal communication of information, usually paid for
and usually persuasive in nature, about products, services, events or ideas by
their sponsors through various media and channels intended for consumers.
Professional advertisement, however, has gone far beyond the classic
definition. Persuasion had long ago become competitive persuasion but has not
stopped there. It has now become visually overwhelming demonstration even
against natural instinct and personal space. The day newspapers started having
full page advertisements as their cover pages, the day popup advertisements
began clouding any information in social media and the day self-promotion
became a surrogate to performance, truth has started becoming a casualty in
some manner or the other, and to some extent or the other. Like technology,
advertisement is a product of modernity that needs to be utilized for the good
it offers rather than the distortions it creates. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Creative but crafty<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Advertising is
a process that is considered creative. Similar products and services are
presented in different ways by advertisers solely because of creativity. Like
fine arts, advertising requires creativity while staying within the prudential
limits of decency, integrity and realism. Even global products need be presented
to reflect local tastes and preferences, embedding cultural ethos in
presentations. Advertising happens through multiple channels such as hoardings,
posters, print, radio, television, cable network, television and social media
popups, besides word of mouth. It is considered the essence of one of the four
essential ‘Ps’ of marketing, product, price, positioning and promotion.
Advertising can be subtle or gross; it can just provide cues or mandate action.
Over time, advertisement has become a specialized science of consumer
psychology, seeking to understand, influence, and shape consumer mind.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Viewing in a
very objective way the deluge of advertisements that impact our senses day in
and day out, one can easily understand that advertisement is not only creative
but also crafty. Crafty is a fairly broad word, ranging in definition from artful
to deceitful but in essence implies a clever way of achieving objectives by
artful and deceitful methods. Advertisement unfortunately is made most on
products that are either injurious to health or those whose health claims are
plain exaggerated. Massive advertisements for sugared drinks and processed
foods typify the former while intensively child focused advertisements for
growth and memory exemplify the latter. Advertisements do expand demand and
help companies create more supply side wealth. Advertisements which are paid
for by companies create huge employment and also help media subsidise their
services. Advertisements also can be great tools of responsibility messaging
and social engineering. That should not limit us from exploring betterment of
the art.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Style rather than substance<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Advertisements
are fundamentally supposed to be persuasive based on facts, rather than
perceptions. The more technical and functional a product is the more important
such factual explanation becomes. The more lifestyle and personal a product is
the greater is the reliance on perceptions and imagery. However, advertising
has strayed from mainstream objectives so much that these two propositions are
not followed faithfully. Where products are technical, company rather than
product is the base of advertisement. Advertisements have moved from building
product equity or brand equity to building corporate equity. Measures to
promote Google, Microsoft, Cisco rather than their products stands out as an
example. Also, advertisements have started focusing on scale and pomp rather
than facts to impress. The ever increasing garish advertisements in realty
space as well as full page advertisements in India are a classic example. </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Apple iPhone
advertisements in India are another example of condescending approach that
brand and corporate driven advertisements can take. The advertisements expect
the users to be psyched further into product supremacy with overwhelming
product imagery, and some minor price concessions. When advertisements go long
on style truth suffers. Airtel is presently running a very engaging creative
advertisement series on its 4G network and nationwide data, and voice
connectivity therefrom. The advertisement mesmerises people over the daily call
drops they suffer in their core cities. The Indian advertisement scenario is
replete with several suggestions of style without substance; the several
campaigns by jewellery houses on gaudy ornaments is just another example. There
is no correlation between the ornaments pf crores of rupees they advertise and
the actual simple jewels that crores of Indian population can really
afford. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Life of style or lifestyle?<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Advertisements in
India have induced a lifestyle that is consumption oriented rather than
consumer oriented. They have impacted the attention span and processing ability
of individuals on matters that are more central or crucial to life. One is
exposed to several advertisements that talk about offbeat products; like
special rice for diabetics, health insurance for elderly, attractive mutual
funds etc. However, not one advertisement would care to expand on the theme to
advise how the products actually are offbeat. In some advertisements, thanks to
the regulators, risk factors are provided but in such small print and with such
disclaimers that no one can decipher any contextual meaning. The objective of advertisement has been to
encourage people to resort to additional or excessive consumption to achieve a
life of style rather than a lifestyle that is truly consumer friendly. It is
not surprising, therefore, that the expenditure on advertisement as a
percentage of sales tends to be higher than expenditure on product development
itself!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Despite lack of
information or even information that brings out the downside, companies
continue to be blasé about their claims even as consumers continue to get
swayed by advertisements. For example, despite the indictment in a judicial
court in USA that a talcum powder of a leading company had cancer causing
potential, the products of that company continue to be advertised as the safest
even for the most tender skins without any reference or disassociation with
such developments. When a food giant
reintroduces its product that has been withdrawn, no explanation is offered in
the relaunch advertisements on how the reformulation is different. The reason
is that advertisements create a strong sense of association between consumers
and their dream lifestyle through their products, and companies are indeed
loathe to impact such positive associations with any negative association, even
if it is established under certain circumstances. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Association, the key<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Association is
the relationship between two data items that is established through feeling,
expectation or through memory. Creative and crafty advertisements seek to
establish a positive and desired association and position their products as the
providers or enablers of such association. Soaps, for example, seek to establish
a clear association with skincare while some specialized soaps with hygiene.
Ayurvedic products bring out association with natural cure, bereft of
chemicals. Electronic products focus on specific attributes such as picture
clarity to promote real life visual experience. Not all associations of
advertisements are positive, however. The advertisements of yesteryears on
cigarettes associated smoking with heroism and cowboy style, and in hindsight
had been extremely negative for life and living. Advertisers continue to be
crafty; even though advertisements for alcoholic drinks are banned they
continue use surrogates and brands. Even more harmful are some advertisements which
are sexist, crass and titillating. While there have been mechanisms like
advertisement council to legislate standards and handle deviations, such
mechanisms have been post-facto, and hardly serve to undo the damage. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">There is a need
to put in place alternative templates of advertising. This blog post suggests
that all advertisements must have two sections; one the visual and descriptive
part as now and the other a technical part which provides technical details of
claims in a manner intelligible to common persons even. When an ayurvedic
product advertises itself as having 21 herbs, the least that must be done has
two components. The first is the theoretical aspect of what each herb is purported
to do as per ancient texts. The second is the practical aspect of how the
company has, in its view, succeeded in bringing those benefits to the product
by virtue of material isolation, product quality and validated clinical trials.
Similarly, the maker of a fan/air conditioner could speak of comparative
strengths in terms of airflow, noise levels, motor/compressor durability etc.
True and authentic advertisement is the one which can make an open commitment
to consumers on product quality based on specifications, manufacture and usage
with expected benefits. Each advertisement for any product or service needs to
be an open warranty card more than anything else. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 31, 2016<o:p></o:p></span></i></b></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-21443255191287986202016-05-29T06:46:00.000-07:002016-05-29T06:46:19.907-07:00Electronics as Bare Necessities in India: A New Sectoral ‘Innovate in India’ Paradigm<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Fitbit is the
hugely popular global manufacturer of fitness band and activity trackers. It
has recently launched through Amazon in India its fitness watch Fitbit Blaze at
Rs 20000 (USD 300). In US it is sold at a maximum of USD 200, with deals in
shops like Best Buy dipping the price lower. Fitbit Charge HR is retailed at
USD 225 (Rs 15000) in India, compared to USD 125 in US, promotional pricing
being USD 100. Microsoft Surface Pro 4 in its mid-range specification (i5, 4GB,
128 GB) costs Rs 90000 (USD 1400) on Amazon India which is the price in US of
the top rated Surface 4 Pro (i7, 16 GB, 256 GB) model. Similar is the case with
all other electronic products, from smart phones to flat televisions and from
washing machines to refrigerators, whether they are wholly imported or made in
India.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A UHD curved
television costs Rs 300000 (USD 4500) in India while in the US a comparable
model costs USD 2500. The usurious pricing of Apple electronic products in
India is well known. It cannot be said
that the rather high pricing that prevails in India is only due to import
duties, if any. Customs duties on different types of products range from 6
percent to 28 percent, duties on parts being on the lower side. Samsung claims
to make its latest range of Galaxy S7 smart phones in India; but they are
priced no less with prices upwards of USD 800, a near 50 percent premium on
corresponding unlocked models in US. Clearly, whether imported into India or
made in India, electronic products seem to have their own premium pricing
logic. The economics of electronic products need greater research, it appears. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Bare necessities<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Someone must
really put their pencil and pen to paper to understand the economic travesty of
electronics in India. A pencil in India is probably 10 percent of the cost in
US and a pen is probably 20 percent of the cost. There is no reason why we
should not aim at cheaper pricing for electronics products in India, in terms
of purchase power parity. Given that the exchange parity between US and India
is 66 to 1, the impact of high pricing of electronic products on the consumer
surplus in terms of broader ability to purchase more necessary products is
evident. The price premium (over above the basic benchmark price) that is
embedded in one electronic product such as a smart phone (which may be say, Rs
25000) sucks away the money that could be spent on 333 rice packs of 1 kg, 100
knowledge books of Rs 250 each, 12500 A4 white sheets, 2500 ball pens of Rs10
each, subscription for 5000 issues of daily newspaper, or an angiogram, in a
manner of speaking.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The comparison
is not to suggest that people of India should shun electronics. A nation, in
contemporary and futuristic times, can only grow when it is
electronics-oriented. However, it must just not be through only consumption of
electronic products (that too imported ones); it must be through design and
manufacturing of electronics products, from multiple base chips to a range of
products in India. A review of history of developed nations suggests that only
those nations which balanced competencies in electronics and non-electronics could
become<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> leaders in industrial development. The point
is that electronic products must also be designed, manufactured and sold in
India in a manner as natural as any of the bare necessity products. Electronics
is no longer a luxury class of products; it is a class of bare necessities!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">No more monopolies<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">There was a
time in the 1980s when the semiconductor industry was dominated by Japanese
manufacturers such as NEC, Toshiba, Hitachi, Fujitsu, Mitsubishi, Matsushita,
Sony and Panasonic. From the 1990s, however, Intel began to dominate the chip
industry, partly abetted by Japan’s strengthening Yen. In the 2000s, it came to
be believed that Intel and to an extent AMD only can dominate the chip
industry. India, apart from failing to see the importance of a domestic
electronics base, lacked the confidence to establish such an industry for want
of basic research base in semiconductors. However, other manufacturers in US
such as Qualcomm, Micron, Broadcom, SanDisk and Nvidia and manufacturers from
Korea such as Samsung and SK Hynix began researching for newer chips and
started dominating the chip manufacture. Part of the decline came from a dip in
personal computer chips but the more significant decline was because of Intel’s
misjudgement on the growth of mobile devices and the need for customized mobile
chips.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">At another
level, monopolies in manufacture of electronic products got dismantled more
decisively even earlier. Korea, followed by Taiwan and China started
manufacturing a range of electronics equipment, including more lately tablets
and smart phones. Japan, of course, maintained its pioneering dominance in electronics
while European countries which were early pioneers recovered and kept making
progress with renewed technologies. Throughout all this, China has emerged as
the world’s chosen base for electronics manufacture, irrespective of the brand,
so much so they have by now established their own status independent
electronics producers (Lenovo, Haier, Huawei, TCL, ZTE etc.,). That a Chinese
company (Foxconn) has become a white knight for a Japanese company in deep
trouble (Sharp) shows the extent to which China has matured in electronics. India has missed the boat during this period. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Ways to go<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">India has the promise
to be the next hub for electronics manufacture as China has been a couple of
decades ago, notwithstanding the missteps even on the few first steps such as
Nokia Park. Notwithstanding this, Foxconn has signed an agreement with
Government of Maharashtra to set up a USD 5 billion electronics manufacturing
park. There are two routes to spur electronics manufacture in India. One is to
encourage contract electronics manufacturers such as Foxconn to set up their
manufacturing bases in India. The parallel step is to encourage electronics
giants such as Sony, Panasonic, Samsung, LG and Apple to set up their own
manufacturing bases in India. Both these strategies are likely to lead to a
good multiplier effect on the industrial economy of India with newer component
bases, newer manufacturing processes, and large number of jobs. What happened
in automobile industry can be foreseen in electronics too in India. That may
not be the whole story, however. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The key to
developing an electronics base lies in research into new materials, and new
processors. Samsung has over 500 patents on graphene, the new material for a
host of futuristic technologies. Similarly, global giants have patents on other
materials belonging to classes of metals, polymers and biomaterials as well as wearables,
sensors and other futuristic gadgets. Water and dust resistant smart phones use
materials that conduct signals but do not allow water in their openings. Now,
Apple would like to use a material that makes antenna holes invisible. It is
difficult to conceive of developing new electronic products without developing
new materials. For example, a new development in wearables envisages wearable skin-like
polymer. Manufacturing of new electronic products under contract or captive use
is one great leap for India but development and manufacture of new materials
and new components would be an even greater leap.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">100% research <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">China and India
achieved major milestones in manufacture through 100 percent special economic
zones for manufacturing. China has, however, gone forward by facilitating
exclusive zones for innovation research and demonstration. There are 14 such
zones in China now. China has also promised minimal governmental intervention
in such zones and research endeavours. In
2006 itself, China identified lack of indigenous technology intellectual
property and indigenous innovation as two major national problems. A
nationalistic Chinese government declared in 2006 that without independent
innovation, China would be unable to claim an equal place in the world or
achieve national honour. Apart from providing financial grants and incentives
to encourage R&D, Chinese government openly traded access to the vast
Chinese market for technology transfer by MNCs. In fact, as many as 400 of
Fortune 500 firms have their R&D centres in China.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Interestingly,
China has provided targeted support to key emerging industries over the last
decade. These are electronics, supercomputing, semiconductors, digital machine
tools, robotics, and more recently nanotechnology and rare earth materials.
China has also relied on overseas Chinese diaspora in the fields of science and
technology to lead such innovation efforts. India needs to develop a completely
novel innovation strategy which has path-breaking elements. The following are
suggested: (i) complete electronics value chain, from chips and semiconductors
to electronic devices and electronics in other devices, (ii) Internet of
Things, (iii) new materials (iii) nanotechnologies (iv) wearable technologies,
and (vi) autonomous devices and equipment. The current strengths in information
technology, heavy industries, capital goods and other industries must, of
course, be continuously reinforced with new innovations. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">100% research
will happen with 100% support from public and private sectors, and all
scientific and technical personnel in India and abroad. Governments in India are
pooling or providing thousands of acres for airports, seaports, roads and
conventional industries, and even financial cities and capital cities which
support construction activity and provide direct employment generation. A few
thousand acres must be allocated for National Innovation Centres for setting up
world-class laboratories in the above areas, and provided free of charge in
exchange with equity ownership, with returns expected from commercialized
technologies through equity ownership. Governments, public sector corporations
and private sector companies must also start making bold moves by acquiring
stakes in overseas technology companies developing leading edge technologies.
Electronics and electronic products in their various hues are the basic
necessities of life, and require dedicated focus, investments and nurturing by
all stakeholders in India. Otherwise, Indian economy will continue to fork out
huge premiums on imports, and more importantly will not be able to fulfil its
true scientific and technical potential. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 29, 2016<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-59456499083475991782016-05-27T04:50:00.000-07:002016-05-27T04:57:25.563-07:00Rich Resources Could Add up to Poor Results: Costly Lessons from Tollywood Movie Disappointment, "Brahmotsavam"<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">In recent
months, two movies of Telugu movie superstars raised huge expectations but
failed to live up to them. While Sardar Gabbar Singh, starring Pawan Kalyan in
the lead role, and also scripted and pseudo-directed by him released about a
month ago disappointed viewers, the even more recent release, Brahmotsavam,
starring Mahesh Babu in the lead role, threatens to be an even greater
disaster. In fact, Brahmotsavam was a greater shocker because it seemed to have
all the right ingredients: the handsome and elegant Mahesh Babu as the central
anchor, three glamorous heroines Kajal, Samantha and Praneeta, an ensemble star
cast of over 30 veteran stars, soulful and peppy music by Mickey J Meyer, gorgeous
sets by Thota Tharani, breath-taking cinematography by Rathnavelu, an editor
known for slickness, K Venkateswara Rao, famed choreographers Raju-Sundaram, a
production house that splurges, and above all, a director who has track record
of successful family entertainers in the past, Srikanth Addala.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Brahmotsavam
was also notable for an intense level of promotions starring all the major
stars and the music director and director in the 3 week run-up to the release,
with clips and talks which underwrote the feel-good value of the movie, driving
up viewer expectations sky high. After a great pre-release extravaganza, the
movie released in over 900 screens globally. It is remarkable that from the
very first show, there was a negative view about the movie across regions and
across viewers, most of it centred on a meaningless and meandering second half,
and all the songs wasted in the first half in rapid succession. Although the
movie team has tried out a rear guard action by chopping off 18 minutes of
draggy scenes in the second half and one song, there has been no improvement of
the sentiment. The author has held in some of the previous blog posts that
movie making is a highly enterprising creative endeavour and offers valuable
management lessons, both from successes and failures. Brahmotsavam too offers
important lessons, both for movie making and enterprise management. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Calibrating investments <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The general
expectation is that if an enterprise is able to commit huge resources, either
as investment or expenditure, it will be able to build world class
infrastructure and business. While there is some proportionality between
resources and outcomes the curve of proportionality tapers off after a stage. In
fact, expenditures beyond what may be called ‘functionality’ level tend to be
sunk costs with declining levels of returns. The phenomenon may be comparable
to what a specific piece of sponge can absorb. Brahmotsavam has a
super-gorgeous mounting of a movie but the movie as a visual treat made
possible by a lavish budget (by Indian standards) of Rs 750 million but had
little meaning without consistent emotional tether (which would have required no
investments of such scale). <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In business
too, luxurious offices and gold plated factories have a visual impact but beyond
a functionally utilitarian scale, they add more costs and overheads than value. Internal value generation at increasing
levels, which is hard to come by, is required to cater to increased investments.
Alternatively, investments have to be
tailored to the value that can be created.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Synergizing expertise<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Expertise is
the key to success. The foundation of Brahmotsavam was to have the best expert
in each field contribute to his or her department being top class. Indeed, the
assumption played out well individually, there being nothing to fault any
department in terms of cinematic excellence. However, together it made incoherent
sense. Potentially, experts took specialized views rather than a comprehensive
view of the movie, and the movie director was more preoccupied in providing
each stalwart with a sub-canvas commensurate with his expertise, rather than
building a more holistic total canvas with appropriate embellishments from all.
<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In business
organizations too, having too many experts could lead to functional
specialization but business sub-optimization. The CEO would more often than not
be preoccupied with satisfying the individual domain needs of expert CXOs
rather than do what is holistically good for the enterprise.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Roles to drive numbers <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Closely allied
with having more technician-experts on board, Brahmotsavam had even more stars
for the screen. In a movie of 150 minutes having more than 30 plus veterans
would only mean not more than 5 minutes of screen time for each star. With the
hero Mahesh being required to be in every scene throughout the movie to carry
it on his able shoulders, each veteran’s average screen time has been even
lower. Rather than tight story telling what emerges in such a scenario is a
visual spectacle of all stars vying for screen space. In low cost economies the
tendency to over-deploy people is endemic; seen in movies as much as in
businesses. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Having too many
people lumped into a value chain is less productive than their being spread out
across the value chain, in a role based manner. When a technical or operational
bottleneck occurs it is the qualitative ingenuity of a few rather than
quantitative redundancy of a mass that works.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Book rather than chapters<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Brahmotsavam is
much like a classic case of a book with an inspiring title and having a few
chapters that are brilliant and several which are weak. The movie certainly has
its beautiful frames and touching moments which reflect the theme in the first
half but there are also several frames which run away from the theme as the
hero takes off on a rather meaningless pan-Indian journey to connect with some
spread out relatives. A book must be interesting to read cover to cover; so
must be a movie from start to finish. Continuing emotional connect with the
reader or viewer underwrites success in both the cases. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Enterprise is a
series of projects but is an unending book or movie. Participants in an
enterprise, employees or investors, look to a continuing story that is
engaging. The moment a project wanes, and gives the feel of a ‘done chapter’,
and in fact has more such disappointments in sequence or in store, enterprise
starts becoming an emotionally and economically losing proposition. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Directorial deficit<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">All said and
done, the director remains the central anchor for a movie. Only he or she holds
in his mind a mental picture of how he or she would convert the emotional theme
to visual frames. He alone knows why he has engaged the stars and technicians
he has engaged and the results expected of them. In Brahmotsavam, the director
has failed in his primary role, probably with the misplaced belief that
conversion of the concept of his earlier successful family movie set in rural background
into an urban setting would provide a similar success. He is also responsible
for all the deficiencies listed above, again due to excess of confidence and
infallibility. Sometimes, directors are hamstrung by weighty producers and
stars which also impacts their delivery on screen. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The CEO of an
enterprise wields a similar powerful role. The growth script or turnaround
script can only be in his hands. Those CEOs who do not exercise this right and
obligation or are not allowed to exercise such a role by the promoters and
boards could lead to sub-optimal, if not disastrous, results for their
companies. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Expectations management<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The modern
society grows on expectations. Expectations management which is relatively new
is different from advertisement management which has been age old. While the
latter largely explains what a product or service stands for, and only subtly
raises expectations, expectations management through a series of leaks, chats,
promos presents an alluring image of great things to come. That said, there
must be some link between the delivered reality and promised utopia. The issue
with Brahmotsavam is that expectations were driven to crazy heights by focusing
only on the good parts of the movie. Those who were exposed to such feel-good
promos expected that the entire would pan out like the promos and were highly
disappointed when things did not turn out as promised.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Companies are
well within their rights to promote their products. In fact, it speaks of the
collective confidence of the corporate sector that they are able to openly
present futuristic features without concerns of copying by competition. That
said, expectations have to be set in realistic zones to be able to deliver on
them.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Customer supremacy<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Even after the
high profile debacle, the stars and the makers of Brahmotsavam must be
wondering what hit them and why things went wrong. The reason lies in the
possibility that all of them took the viewer for granted, and assumed that
flashes of brilliance would suffice to impress the viewers. The fact, however,
is that the user has his own way of feeling the experience which develops as
one sees the movie. While many reasons for viewer dissatisfaction can be
adduced as above there may indeed be no one reason why the viewers reject a
movie. It can only be related to rather qualitative phenomenon of user
experience.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Enterprises are
not immune to failing to gauge user experience. Apple has tasted many successes
by providing a great user experience on its iPod, iPhone and iPad products but
has failed to provide the same user experience with its Apple watch. The customer
continues to be supreme in judging a new product regardless of the past
successes of a firm. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Open to feedback<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">One can have
open-to-sky ambitions with a relentless focus and unremitting faith in the
goals and processes. In fact, such
passion is needed to fuel growth ambitions. However, as with many things the dividing
lines between healthy ownership of a concept and unhealthy possessiveness, and
between positive commitment and blind obsession are indeed thin. When a movie
is taken with a few overarching themes (eternal family sentiment, charismatic Mahesh
Babu, best-in-class departments, successful director etc.,) everyone believes
that the success is assured. The makers must, however, be open and sensitive to
feedback, which alone can course-correct disasters in the making.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Enterprises
tend to be far less interactive and open-house oriented as movie houses are.
Yet, if movie houses themselves suffer from myopic or obscured approach towards
open feedback, the asphyxiating situation in tightly run enterprises can only
be imagined. The need to facilitate and receive continuous feedback in an open
manner and respond to that meaningfully is quite evident.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Result not a sum of parts<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">We are all
aware of the constant exhortation that organizations must aim at synergy,
whereby the sum is more than a mere addition of numbers. As this blog post
illustrates parts are extremely critical but even the best parts cannot
automatically make for even a viable product, let alone the best product. Just as
in a mechanical watch all components must be fine-tuned for perfect assembly
and perfect operation, every product and a project whether it is moviemaking or
product manufacture must have parts that are fine-tuned in a success formula
that is, in the overall, cohesive, balanced and integrated. Without coherent,
balanced and unified thought as well as execution, the result of an endeavour
may not even be a sum of parts!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Hopefully, the
lessons of Brahmotsavam will be learnt. There was once a movie, Dil Se, made in
1998 by an ace director (Mani Ratnam ) with a star hero (Shahrukh Khan) and
some of the finest technicians ( A R Rahman and Gulzar, for example) which
raised huge expectations as a visual and musical masterpiece but turned out to
be a huge box-office disappointment. Both the director and actor (and, of
course other technicians) picked up the pieces and went on to make great movies,
individually and collectively, post-failure. All stakeholders of Brahmotsavam,
likewise, would hopefully bring out their collective best in their future movie
endeavours.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">That said, why
should anyone, movie makers or enterprise leaders, fail at all when success can
be assured with some sensibility and sensitivity as well as some reflection and
introspection? <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 27, 2016<o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-47595610004198505082016-05-25T10:30:00.000-07:002016-05-25T10:30:15.706-07:00Goals as Triggers: An Outcome-Process Matrix<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Goals are an
essential part of life for individuals as well as organizations. Goal setting
is an important mechanism for development. In individuals it reflects
leadership to take charge of one’s life and live optimally. In organizations it
reflects a leadership capability to drive the organization on development path.
Goals that are easy to achieve and will, anyway, happen in the natural course
are not goals truly in a developmental sense. Goals which require planning,
generation and deployment of resources, and which involve complex managerial
processes are usual goals in an organizational sense. Goals by themselves are
meaningless without they becoming outcomes, and outcomes are impossible without
dedicated efforts. Aspirational adrenalin and situational stress are two
important components of the journey towards converting goals into outcomes.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Goalsetting by
itself is an emotional trigger. For some, setting mild easily achievable goals
acts as a relief while setting lofty and tough-to-achieve goals could be
stressful. For others, the reverse can be true. Outcomes, apart from the
developmental satisfaction of achieving, involve emotional outcomes too. There
are many components that vest in goals the stress dimension or lack of it. Time
is the most impactful component. There is no linear correlation, positive or
inverse, between factors supporting goal achievement and actual achievement of
goals. It is not necessarily true that few is better for goals and more is
better for resources for smooth goal achievement. It is this complexity that
makes the theory of goals a challenging one. This blog post proposes a simple
outcome-process matrix to understand the goal theory.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Goal-resource conundrum<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Many advise
that fewer goals make for better accomplishment. In matter of practice, there
is nothing like being able to live with fewer goals. Even a singular goal has a
cascade of goals. A singular goal like “I should join medicine” has several
goals like “getting top ranks in certain qualifying subjects”, “getting top
marks in the qualifying entrance examination”, “arranging resources for the
costly medical study” and “preparing with the family for separation into hostel
life” etc. In respect of organizational goals, there is never anything like singular
goal. Something as singular as “we want to achieve the highest market share at
X percent” has to be viewed really as a cascade of goals even at business
level, let alone at each functional level. The goals would cascade into
revenue, cost and profit goals at the business level, and each of these will further
cascade into functional goals. Each organizational goal has a hierarchy of
goals. And, some of the goals could conflict each other too!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Resources are
also complex to decipher. The law of proportionality does not work beyond a
point. When a company has a design, manufacturing or quality issue just
throwing more people into the ring to solve the issues would not help. In
certain situations, quality rather than quantity would be more important. In
certain other cases, just giving more time (time being a very important
resource) would help. Resources are, more often than not, are shared. In most
cases, the impact of doing or not undertaking an activity or not providing a
resource allocation would have its impact much later. Relating goals and
resources uniquely, in a defined time frame, therefore is a problem in itself.
Budgeting is a process to regulate resource allocation but it is a set of
numbers. Achievement of goals, and the process thereto, is an emotional
ownership journey. The outcomes and process interact in a way that ownership
comes with a tinge of emotions.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Outcome classification<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Outcomes are
basically of two types; those that are potentially feasible and those that are seemingly
unworkable. For example, in a market duopoly where both the players have equal
share, it would be potentially feasible for one of the players to aim at a 75
percent market share. However, aiming at 95 percent market share would
certainly seem to be unworkable. On the other hand, in the same duopoly, if the
shares are 10 and 90 percent, it would be potentially feasible for the 10
percent player to become a 20 percent player or a 90 percent player to further
become a 95 percent player. It would certainly seem to be unworkable for the 10
percent player to become a 90 percent player, however. In a way, the
feasibility or otherwise of outcomes is contextual, depending on
organizational, technological, market and environmental conditions. More
importantly, it is a function of passage of time impacting these dynamics.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It would have
been impossible to conceive of a smart phone which can be assembled and
disassembled to suit different functionalities in user’s hands. The first step
towards that has been made with LG G5 modular phone which enables upgrade of
certain functionalities with addition of certain modules. Google Ara with its Lego like phone
construction which seemed infeasible prior to LG G5 suddenly becomes feasible
now. Travel en masse to other planets and setting up human colonies would seem
infeasible even today but could become feasible in a few decades. Visionary
leaders set goals which are not easily visible to people reasonably versed in
current state-of-the-art. Feasibility or otherwise depends on the processes
adopted to work towards such goals. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Process classification<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The processes
for achievement of goals are of two basic types; those that are carried out as
they are instructed to be performed and those that are performed with experimentation.
For example, most processes followed in most organizations by most individuals
are all instructed processes. The advantages of process instructions are
evident; they lead to repeatability and consistency with predictable results.
They allow quality checks to be performed at key stages. Instructional processes
promote learning, and lead to productivity. Well instructed people tend to be
compliant and focused. Certain goals benefit immensely by instructed processes;
in general, goals in industries with high safety risks or quality variations
are better off by following instructional processes. In goal setting, however, certain processes
have to be extrapolated or creatively constructed; yet in instructional
processes these are also codified.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Experimental
processes are those processes which are generally first time processes. In
certain aspects of business, experimental processes become inevitable. Most
R&D goals can be achieved only with experimental processes. Market
positioning of new products requires experimentation with consumer preferences.
Even in a manufacturing setup, certain experimental processes would have to be
gone through before standards can be established. Experimentation of even
standardised processes occurs in empowered organizations which seek continuous
improvements. Experimental processes which
are successful bring pride and ownership to the developers. Tolerance to
mistakes is an essential requirement for successful evolution of experimental
processes. When goals are lofty, resources thrifty and timelines tricky,
experimental processes are the better option. Typically, not all individuals
may be well suited to experimental processes.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Outcome-process matrix </span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">As mentioned
earlier, outcomes and processes constitute a matrix. Depending on whether the
outcomes are potentially feasible or seemingly unworkable and whether processes
are instructional or experimental, four grids get formed which influence the
emotional stress or satisfaction that gets generated. The four grids are: (i)
feasible outcome-instructional process, (ii) feasible outcome-experimental
process, (iii) unworkable outcome-instructional process, and (iv) unworkable
outcome-experimental process. Each of the combinations leads to different
levels of stress and satisfaction levels. A stress-free situation occurs when
outcome is considered feasible and people just follow instructions. In this
situation, the stress of failure is on the lower scale. When the outcome is
considered feasible but people need to experiment their way to the expected
outcomes, there would be a positive stress and joy of discovery through
experimentation. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">When the
combination is that of unworkable outcome and instructional process, there
would be dissatisfaction of failed goal but there will be lack of guilt that
the failure has occurred in spite of following instructions. The grid of
unworkable outcome and experimental process is all the more stressful and
dissatisfying due to outcome failure and guilt of failed process discovery. This does not mean that the feasible
outcome-instructional process grid is the best solution, and others lead to
stress and dissatisfaction in varying degrees. In fact, the driver for industry
leading growth is to be seen in terms of making the impossible possible and exploring
the unexplored processes through experimentation. </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Impossible to possible<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">There are two
simple steps to pursue the impossible to possible even when the route to
achieve is completely unknown. The first step is to put in place a base case
wherein an aspirational but feasible target that can be achieved in a well-planned
manner is set out. The next step is to stretch the feasible to seemingly
unworkable level and leave it to the team to explore their way to achievement. This
enables the team to bring out their best to achieve the impossible with their
ownership of processes, with the full knowledge and confidence that a backup is
feasible and permissible. This approach is particularly relevant in space
exploration, drug discovery, deep sea exploration, polar expeditions, and the
like, where the impossible and unexplored can be pursued with the fall-back in
play (space ship can be brought back after testing out the trajectory, exploration
targets can be moved after the unknowns are discovered, molecules can be
re-purposed after initial failures etc.,). <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Positive marginal
stress and emotional ownership are critical factors that differentiate industry-leading
teams from industry-average teams. Seemingly unworkable goals and hitherto
unexplored pathways are well in order if the leadership understands how to
inspire the team members on the discovery path. Ideally, if individuals are
also hardwired to be unguided achievers of the impossible from their early
educational and career days, the possibility of seeking and accomplishing the
impossible becomes real in an organizational setting. Leaders in organizations,
teachers in schools and colleges and parents in families have a responsibility of
standing by the goal seekers in this process. The dividing line between
positive stress and negative burnout on one hand and exhilaration of achieving
the impossible and the disappointment of slipping from the peak on the other hand
are too powerful to be left unattended.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 25, 2016 <o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-41858711558116191272016-05-21T09:39:00.000-07:002016-05-21T09:39:15.191-07:00Time as a Resource: Inevitable Erosion, Continuous Refill or Invisible Accumulation? <div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">It is well
recognised that in human life time is the most precious but most limited
resource. From the time one is born to the time one breathes one’s last, time
is the constant companion of one’s life. One ought to be conscious of this once
the cognitive abilities start developing but unfortunately few accord the
importance to time as one must. The importance of time in acquiring education,
gaining experience, developing relationships, promoting careers, preserving
health and delaying aging is well known. However, how to deploy and utilize ‘unit
time’ as a resource for maximal efficiency and effectiveness tends to be a
highly personal matter, varying from individual to individual and family to
family. Approach to time is a core value that one imbibes based on one’s family
and educational backgrounds.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It is not
unusual for kids to watch their parents and siblings at work and in undertaking
family responsibilities and imbibe certain values with regard to use of time.
Likewise, the educational systems of the institution a person joins and the
approaches of friends further supplement the approaches to time. Over time, a
person develops an approach towards life that could be ‘structured and systematic’, ‘flexible
and tactical’ or ‘fatalistic and philosophical’. Depending on which of the
three approaches govern a person’s view of life, his or her attitude towards
time also would vary. These approaches to life are not usually static, and
could vary with phases in life. Accordingly, one’s approaches to utilization of
time would also vary. Though this blog post is not life approaches, some
discussion on the topic would be in order.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Approaches to life and time <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Structured and
systematic approach to life is the ultimate planner’s and productivity expert’s
trip. This person is an industrial engineering expert of sorts, knowing exactly
what should be done when, how and why. Obviously, the structured and systematic
person knows the value of time the best. He or she considers life as a duty to
be fulfilled diligently and efficiently. Flexible and tactical approach to life
depends on sizing up each activity as it emerges and responding to it
accordingly based on perceptions of risk and reward for each activity and the
modality/time for fulfilling it. The flexible and tactical person seeks to
manage life for happiness than be managed by it as a duty. Fatalistic and
philosophical approach to life follows a minimalist and mindful approach to
life without exerting effort to seek more than what follows from circumstances.
The fatalistic and philosophical person seeks nothing other than emotional
fulfilment from life.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Typically,
during the educational phase of life, a person is likely to be and expected to
be structured and systematic. As one takes up a career job he starts
appreciating the utility of a structured and systematic approach to life but
also starts understanding the opportunistic benefits of being tactical and
flexible. Somewhere during the journey, and certainly after retirement from active
service, he starts giving up being in the race of life and begins to appreciate
the fulfilment of being fatalistic and philosophical in life. An ideal
calibration could be to see a phase-in of the three approaches as being
sequential. These approaches are not mutually exclusive. A fatalistic and
philosophical person may still be quite ordered and disciplined how he conducts
his daily chores. As one struggles in career despite being structured or
tactical, one may begin appreciating the benefits of being philosophical. It is
easy to appreciate that the approach to life influences one’s approach to time.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Time erodes<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Sure, time
ticks away from one’s life but one can try to gain a little by trying to live
longer, and by living healthier without loss of time. That said, whenever it
hits, time erosion as a concept hits one like a sudden fall of a ton of bricks.
People respond to this realization with a variety of emotions: from frustration
and desperation on one hand to recovery and urgency on the other. The former is counterproductive while the
latter could produce certain results. Both the types of responses lead to
needless stress, and if encountered continuously accelerate aging of
individuals. That time dissolves is a truism. However, if we fail to make good
use of time, negative emotions and stress are not the solutions. Improved
learning and enhanced productivity are the better solutions. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Learning
requires additional time even as the pressure of lost time mounts. That is
where time management as a concept comes up. By decluttering activities,
listing the uncluttered ones, prioritising them, and even delisting the low
priority, non-value adding ones, one would be able to release more time in a
day than lost. Time thus released can be utilized to learn and carry out things
more productively. Structured and systematic people, even when disrupted by
flexible and tactical approaches, can overcome erosion of time with the above
approach. There is, however, a more meaningful approach to understand the true
value of time, as an eternal clock. Life may freeze but time shall never
freeze. Therein lies a great awakening.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Time as continuous refill<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">We know the sand
filled hourglass as the classic depiction, and when well engineered a classic
measurement, of time. While time for an individual may be limited time as an
absolute resource is indeed timeless. The way to look at time is not to get
exercised that time is getting lost but also to be excited that time is getting
continuously refilled. In fact, compared to any other resource time is the only
resource that gets continuously refilled. For example, when we expend money it
will not be automatically recouped unless specifically earned. On the other
hand, even if we expend time, we can be sure that the next unit of time will be
available to be utilized. Time is therefore a continuous refill to be positive
and optimistic about. If we are unable to perform certain activity in a given
period of time, it can be performed soon after.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The concept of
time as continuous refill is not meant to cause complacency. In fact, it is
worthwhile for all of us to keep time logs to keep an account of time we spend
on different activities such as priority activities or vital-essential-desirable
activities, and if the time has been spent productively or wastefully. By linking
the time log to results in terms of happiness and satisfaction we could become
even better on linking time to our emotional wellbeing. This exercise is an
individual choice as each one’s goals, schedules and approaches vary. Many people
in work life believe that busyness makes good business. Research has established
that doing nothing and concentrating mind on serene matters has helped improve
productivity. The greatest support for this approach comes from the fact that
the moment a rejuvenated person is ready to take on work again, time will be at
hand. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Invisible accumulation<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Whether one is
productively work focused or meditatively leisure focused, time ticks by
alright but something invisibly accumulates. That accumulation takes place in
three categories; experience, wisdom and stature. Experience helps one manage
time effectively along with other resources. Experience helps one to come up with
the right recipe for mixing resources in a time effective manner for desired
results. Wisdom helps one identify whether certain endeavours are worth the
while at all or those facing neglect are the ones that need to be picked up
right away. Experience and wisdom together help a person in accomplishment of
results in a more effective manner than others could. Series of such
accomplishments based on experience and wisdom lead to stature. Stature again
is not something that can be metricised; it is also an invisible accumulation
that can be only felt by others.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Invisible
accumulation of experience, wisdom and stature ideally must remain invisible.
It is a completely personal achievement that is related to one’s approaches to
life and time as discussed so far. Any public display by one on what he
perceives as his wisdom and stature would only erode those invisible assets.
There is reference in Hindu mythology to mystic powers that are developed based
on continuous prayers and penances which must be utilized, if at all, for good
causes in a discrete manner. Utilization on inappropriate matters and boastful
references to such powers are said to lead to dramatic dilution of such powers.
Invisibly accumulated experience, wisdom and stature are akin to this. Interestingly,
those who are experienced, wise and statured realize the importance of time,
and its judicious use in vesting them with such invisible accumulation.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Kala chakra<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">As understood
so far, a typical accomplished person used to reach his or her full wisdom and
stature in his or her sixties, and thereupon lose it progressively as he or she
falters with age. If one were to see this evolution as wisdom and stature
travelling with time, the apogee is reached after six or more decades but thereafter
when it gets down to the final low varies with individual, given (a) the low and
uncertain longevity, and (b) the differences in longevity. However, with
increased longevity of human race, the journey from apogee to low point can no
longer be taken as an inconsequential, immaterial and natural decline. On the
other hand, with increasing longevity, there is an increasing need to preserve,
if not enhance, the invisible accumulation. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">As the human
race moves forward on better physical health (with more advanced healthcare and
nutrition), the need for better emotional health becomes self-evident. The approaches
to life and time discussed in this blog post, structured and systematic,
flexible and tactical, fatalistic and philosophical continue to be relevant over
a much longer time horizon, beyond the sixties. The need to think of time more
as a refilling rather than eroding resource is more important than ever. The
need to continue to nurture the invisible accumulation of experience, wisdom
and stature is also self-evident. The wheel of time, which starts from the
first breath will keep spinning till the last breath of a human. It is entirely
up to him or her to govern the speed to apogee and thereafter!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 21, 2016<o:p></o:p></span></i></b></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-43108112597563986352016-05-19T04:35:00.000-07:002016-05-19T04:35:29.054-07:00Testing and Homologation: ‘Make or Break’ for Firms <div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Recent news
reports suggest that certain Indian cars have failed to comply with the
standards of crash test conducted by Global Car National Car Assessment
Programme (GNCAP). On top of that, there have been news reports stating that
Japanese car manufacturer, Suzuki, found discrepancies in its fuel and
emissions testing but denied any cheating. Suzuki said that its testing method
did not comply with Japanese regulations but the results are not materially
impacted. About a month ago, Mitsubishi of Japan admitted that it had been
manipulating fuel economy record of its automobile models for several years, a
news which caused a serious erosion of its market capitalization. Only a few
days ago, Nissan of Nissan-Renault alliance announced a 34 percent strategic
stake in Mitsubishi to stabilize the company. These follow the infamous
Volkswagen emission scandal that came to light in February 2015 involving
tampering with of software code of engines fitted on millions of cars to show
the vehicles to be in compliance of regulatory standards. A few other
manufacturers are reportedly involved in such errors, discrepancies or
manipulations.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">These high
visibility cover-ups pertaining to product quality come on top of several
recalls that have been prominent in the automobile industry, covering both
vehicle manufacturers (GM, Toyota, Honda etc.,) and component makers (Firestone,
Takata etc.,). Nor is this a new trend. A review of available literature
reveals that automotive manufacturers including the Big 3 of USA and other
European makers were beset by problems of quality and non-compliance since the
1940s. India had its own incident when Standard Motor had to close shop in late
1980s as a result of alleged violation of fuel efficiency norms and
concessional customs duties. Most of the issues pertain to fuel economy and
safety. Flouting of governmental regulations is by no means confined only to
automobile industry. Nestle has been in the eye of a perfect storm in India in
2015 because of alleged non-compliance of its lead product, Maggie, with label
claim. These incidents which make or mar not merely reputation but even the
very existence of a company bring out the importance of testing and
homologation in industries.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Testing and homologation<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Testing is the
process of evaluating a product, system or their components with the intent to
find out whether they satisfy the prescribed specifications or not. Testing is
an integral part of an overall quality system which comprises a series of
policies and procedures to identify compliance to specifications, identify gaps
and potentially suggest measures to remediate and improve. Testing is just not
an internal commercialization requirement for a company. It is required for
homologation, usually of an end-product. Homologation is the official
confirmation and approval by the regulatory authorities of a country that the
product meets the prescribed regulations and laws besides the company’s own
specifications and claims. Every nation tends to have its regulatory agencies, rules
and procedures and testing agencies. A manufacturer based in India and
marketing in India must necessarily meet Indian regulations. The manufacturer
must also meet testing and regulatory protocols of all the nations to which its
products are exported.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In addition to
the above, in case technology is imported, the standards of the country
supplying technology need to be followed. In certain cases, certain desirable
global standards need to be met voluntarily for establishing product and brand
equity. In today’s globalized and networked production system, fine-tuning
design and manufacturing to meet the requirements of multiple nations is a
critical requirement. The requirements of testing and homologation vary across
industries. They are most complex and long drawn in the pharmaceutical industry
relative to any other industry. Regulators in pharmaceuticals, especially of
US, EU and Japan, focus on development and manufacturing controls through
physical inspections as much as product approvals based on exhibit batches and
dossier reviews. In other industries product certifications are all that are
required. That said, given the critical importance of testing and homologation,
and emergence of testing and regulatory agencies in various countries, companies
must evolve new approaches to the domain. Some suggestions are made below.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Six principles for effectiveness in testing
and homologation<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In most companies,
regulatory affairs, new product testing and homologation are parts of R&D
setup, mainly because of the developmental nature of these activities, and the
impact these three departments have on specification and product development,
and vice versa. That said, there should be strong interface between mainstream
functions such as manufacturing, sales and service with these three different
departments to ensure that results are interpreted in terms of actual site
manufacturing and field usage conditions. This collaboration needs to be more
than just baton passing but must be more in the nature of collaborative hand-holding,
while challenging the proceedings and providing solutions, based on every
perspective. Six principles for assuring effectiveness and integrity in testing
and homologation are discussed below.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Developmental quality
assurance<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">While quality
is generally considered paramount in companies, quality is not fully understood
and executed well in an R&D context. This paradox arises from the fact that
most of the R&D work is experimental and developmental, and not
standardised and repetitive, in nature. The paradox can be resolved through
developmental quality assurance (DQA) which understands the specific uniqueness
of R&D but imposes the rigour of quality on development and testing. To
ensure that testing and homologation absorbs the full rigour of mainstream
quality function, DQA professionals must be from mainstream quality function
but with an exposure to uniqueness of R&D. The focus needs to be on
calibration of equipment, prescription of standard testing procedures, cross-calibration
of equipment, processes and conditions encountered internal simulators,
external simulators and actual running conditions.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Concurrent quality
management<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The
developments with the automakers indicate the need for concurrent quality
management as a concept that is as important as concurrent engineering. Just as
quality cannot be inspected but needs to be produced, it also has to be an
integral part of design to delivery process, from specification setting to
homologation. This requires that the focus of concurrent engineering must
change from current ‘first to market’ to ‘right and first to market’. Most
designs involve incremental changes, with an eye on performance improvement or
cost reduction. Some of the best practices of change management such as
justifying a change and making an exception report when it fails to meet up to
the expectations would help in ensuring concurrent quality management. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Global product
development<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Many of
homologation issues are both a corollary and a fallout of globalization
imperatives. Globalization enables customization of products to meet different
markets but it also carries certain risks when cross-platforms are used across
countries. An evolved global product development system which designs products
for the minimal and maximal conditions of testing and performance, globally
relevant, ensures that such products are backed by globally sustainable product
platforms. These could relate to meeting more stringent crash tests, using less
evolved fuels, more punishing road conditions, and so on. Global product
development will also require a very strong global regulatory department which
is well-versed in the operating conditions, and homologation requirements of
different countries. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Software as
hard-stop<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Today’s
products, especially the automotive products, incorporate more software than at
any time. This trend is only likely to increase in future. As the examples
quoted in the early part of this post demonstrate, software is one aid for
manipulation too. It is important to develop not only bug-free and hack-proof
software to ensure safety and privacy of automobiles and their users but also
make it traceable and manipulation-proof. CXOs in charge of R&D and product
development must integrate software development and error-proofing, including
artificial intelligence, sensor technologies and robotics as part of R&D
tool kit.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Quality as board
audit function<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Importantly, there
is a need to make quality as an important responsibility of the functioning of the
board of directors of a company. All boards today have audit committees to
review finances and financial governance as also monitor internal controls in a
company. Keeping mala fide intentions aside, financial outcomes are nothing but
a resultant of operational integrity. Quality is the sentinel of operational
integrity. The link between quality and integrity is thus evident. It is,
therefore, important that the boards take upon themselves review of quality as
an essential board responsibility. Product testing and homologation processes in
global diversification strategies must logically merit attention in quality-centric
board functioning. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Organizational positioning<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The above
discussion brings out the importance of testing and homologation in making or
breaking the reputation of a company. As Volkswagen episode demonstrates,
slippages in this vital domain can put paid to global leadership ambitions of a
company. And, Mitsubishi episode demonstrates that the very survival and
ownership of a company could be at stake. There is every reason, therefore, to
bring testing and homologation, from the current side play in R&D
departments to the forefront of cross-functional commercialization of new products.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">This requires
that testing and homologation is treated as a high technology endeavour and not
as a tail end activity of R&D. This also requires that this function is
positioned with the brightest technical talent which is also exposed to requirements
of different countries, and is taken up as a key delivery by the chief technology
officer of a company. Integrity and competence in testing and homologation is
akin to the role of safety in operations. Its effective presence is the
greatest insurance for success and sustainability of both performance and reputation
of companies.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 19, 2016<o:p></o:p></span></i></b></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-36834676377663372492016-05-18T03:44:00.002-07:002016-05-18T03:44:57.994-07:00Continuing Education for Employees: Consistent Strength for Organizations<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Two things
never stand still in life; the first, of course, is time, and the second, less
recognized, is knowledge. Knowledge gained through education is the prime
ticket for career entry. Thereafter, consummate application of such formal
knowledge as well as experiential knowledge gained in one’s career is the key
to further progress in career. Industrial and business organizations are
paradoxical. At one level, they are at the leading edge of technology. At
another level, they tend to stagnate at past levels of knowledge, which is
attributed mainly to employees being engaged in repetitive jobs and not being
challenged to be at contemporary standards of knowledge. </span><span style="font-size: 12pt; line-height: 115%;"> </span><span style="font-size: 12pt; line-height: 115%;">A study of different companies reveals that
those companies which invest in continuing education for their employees tend
to be more competitive.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Continuing
education even in the best of companies is a misnomer. Usually, it is limited
to providing “canned programmes” to a proportion of employees, “allowing” a few
employees to pursue formal part-time degree or higher degree programmes, and “sponsoring”
even fewer to executive development programmes. Some companies eschew all of
these on the basis that there is no substitute for on-the-job-training on a
continuing basis. These policies cause a stagnation of skill levels and lead to
competitive decline. In some cases, companies which are impacted by competitive
decline engage external consultants at an aggressive pace and at great costs to
reinvent themselves. In contrast to such uncoordinated efforts, it would be
more appropriate to embed continuous learning in organisational culture, with
emphasis on contemporaneity and quality rather than just coverage.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Shared responsibility <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Continuing
education is a shared responsibility of both the company and employees. While the
company has a lead responsibility in articulating that it places a premium on
knowledge, and following it up with a learning environment, employees also need
to consider continuing education as their responsibility too. In fact,
continuing education is a very useful platform to align the career
possibilities that a company can offer and the career expectations that an
employee has. Continuing education helps in that it could derive greater
competitiveness through skilled-up employees and be in a position to offer them
better opportunities. For employees it
is an opportunity to offer a superior or different value proposition to the
company and seek career progression in the same or different track.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The extent to
which responsibility for continuing education is felt by company and employees
varies based on the business context. Start-ups by definition are innovative
and, where required, learn by experimentation; they are likely to have little penchant
for continuing education. Growing firms evidently are competitive and successful
but also cost conscious; they are likely to adopt a need based approach for
continuing education. Mature firms are engaged in defensive strategies and are
likely to be open to a skill based approach for continuing education. Declining
firms are engaged in survival strategies and are likely to have little time for
continuing education. While employees may like to prefer a degree or skill
based approach, the company context determines their approach. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Multiple approaches<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Companies could
adopt one of the three approaches in fulfilling their share of responsibility. The
first is a ‘qualification gap’ based approach. In this approach, the company
determines an optimal qualification for each role (as contrasted with minimal
qualification required for entry) and encourages acquisition of degrees or
certifications/accreditations for bridging the gap. The second is a ‘competitiveness
gap’ based approach. In this approach, the company maps people competencies to
company’s competitiveness and does whatever is required to make the company
competitive. The third is an ‘industry leadership’ approach. In this approach,
the company believes in a heady mix of superlative qualifications and competitive
competencies for a differentiated performance. While most companies would
follow the first or second approach, top ranking consulting firms, law firms
and investment banking firms appear to be following the third approach.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Employees’ approach
to continuing education, by and large, depends on the nature of the company. A technology
and research intensive industry will require skills that are typically offered
in leading educational institutions. Skills required for other industries may
be more easily sourced in the general marketplace. Regardless, in general the approach
tends to favour the acquisition of higher formal degrees. Whether employees do
it through part time education or by taking a break depends on personal
circumstances, company environment as well as career shift that is desired. Research
indicates that employees do not consider in-house training as being supportive
of career aspirations; they also consider external short term courses as little
more than of marginal support for either on the job performance or career shift.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Education as mind-set<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The primary objective
of industries and businesses is to provide products and services, and not to
educate. Similarly the primary objective of industrial and business employees is
to put their knowledge to use. To conceive, therefore, of a situation where
industries and businesses as well as employees focus only on education is
somewhat impractical. However, the need for continuing education as brought out
above is critical. The blog post suggests a few mind-set approaches to
accomplish the objectives.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Continuous as
lifelong<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The first is to
consider continuous as really meaning lifelong. As a concept, continuous
education has lesser emotional connectivity to an individual than lifelong
education. Once an individual gets into a mind-set that education is a lifelong,
value adding process, he or she will surely develop ownership. Similarly, it
focusses to the company that the continuous education initiative would need to
be a part of life skill development of an employee. The concept of ‘lifelong’
is humbling as well as futuristic, for both employees and companies. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Company as
campus<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Companies take
many structural approaches to supporting their versions of continuing
education. These include setting up their own in-house technical training centres
with pilot equipment for on-hands training and management development centres
for development of executive and managerial skills. These, however, tend to be
just a part of the company infrastructure and figure more as slots in training
calendar. The compelling proposition, on the other hand, is to consider the
company as a campus wherein every piece of equipment, every bit of procedure
and every interaction with a person provides learning opportunities. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Individual as
learner<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">While the
company has a lead responsibility to provide a learning ecosystem, it is for
and up to the individual to mould himself or herself as a perpetual learner. Being
a learner does not make one a novice; only the insecure would feel that way. Being
a learner and asking questions should never be seen as infra dig by employees
or management. Wise scientists learn from every reaction of an experiment, wise
operators from every rhythm of their equipment, and wise executives learn from
every interaction they have in the company. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Learning processes<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">When we think
of learning processes, things like classrooms, flip boards, audio-visuals,
presentations, course materials etc., come to mind usually. Some think of off-site
events and programmes as great learning opportunities. However, all these are
at best accessories and aids to the learning processes. The real learning, that
too perpetual learning, happens through the following personal approaches. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Listen, observe,
absorb <o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In keeping with
the prime responsibility on the individual to learn, the prime responsibility
for learning approach also shall be that of the individual. It is fairly simple
too. For a perfect learning process, the individual must listen intently, observe
closely and absorb earnestly. These processes must take place in all
interactions, peer to peer or boss to subordinate. In several cases, there
could be learning opportunities from the younger reporting staff too. Learning
environment is usually an expressive and empowering environment.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Follow, emulate,
excel<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The objective
of learning is to excel in performance. This is usually preceded by two fundamental
stages of following and emulating. Following is the process of merely implementing
the learnings as absorbed. It is task oriented learning, putting into effect
the ‘know-how’ learnt. Emulation is the process of thinking and acting like the
person providing learning inputs; it is mastery of both ‘know-how’ and ‘know-why’.
Excelling is the process of creative thinking and execution based on the
learnings imparted/ received. Excelling is the result of empowered learning. </span><span style="font-size: 12pt; line-height: 115%;"> </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Teach, share,
coach<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Everyone has a
responsibility to disseminate learnings as much as they absorb. This again
occurs through a three stage process. Most people who are well-versed in their
art tend to teach. Those who teach prepare their learners only for ‘know-how’. A
few others not only teach but also share their thinking around the subject
matter of interest. Such people help the learners absorb both the ‘know-how’
and ‘know-why’. A few go beyond both the stages and truly coach the learners overcome
their issues and limitations, and become what they can truly become.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The winning twelve<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">This blog post
has reviewed the ticker of continuing education that most organizations would
like to carry, and proposed that it should be considered more as lifelong education.
It has reviewed current shared responsibilities between a company and its
employees, and noted that while a company has the lead responsibility to create
a learning ecosystem the prime responsibility for learning must be that of an
individual. It has considered the multiple approaches currently adopted and postulated
that they serve to accessorize rather than elevate continuing education as a
lifelong journey.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The blog post
proposed twelve elements of a lifelong learning journey. On one plane is a true
learning platform that embeds the concept of lifelong learning, with
perpetually learning individuals considering the entire company as their learning
campus. It also proposes an easy and feasible multi-step process to learn
through listening, observing and absorbing to be able to follow, emulate and eventually
excel. It legislates that those with superior knowledge must endeavour to
teach, share and coach all the time. Lifelong learning is a humbling feeling and
a rewarding experience. It is a win-win for both employees and organizations.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 18, 2016 <o:p></o:p></span></i></b></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-31386150012567555292016-05-17T01:59:00.000-07:002016-05-17T01:59:15.382-07:00Digital Democracy: Decisive and Doable?<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Elections are a
costly, gruelling and time consuming process in any country. Yet, India has
been ahead of developed and developing nations in holding countless elections
nation-wide, and keeping democracy alive and vibrant. The just concluded
elections in certain States of India is one more endorsement of this tremendous
capability in India. India’s Election Commission, and other constitutional,
governmental and political structures and systems deserve a lot of credit for
the election engine that the country has fine-tuned. While there are many
criticisms that things could be better on key factors such as turnout, manifestoes,
practices, candidates and accountability, this blog post is not about either
those issues or solutions for them as the author believes that there are more
competent experts and agencies to communicate and work on it. </span><span style="font-size: 12pt; line-height: 115%;"> </span><span style="font-size: 12pt; line-height: 115%;">The purpose of this blog post is to consider
the concept of elections in a broader perspective and in a digital context.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Election is a
mandated right of all citizens in a democracy of expressing, individually and
confidentially through a structured process, their considered opinion on
performance and potential of a ruling dispensation. It is, in a sense,
applicable to every forum, organization or entity where a few leaders govern
the rest of the members based on either agendas or promises. Every organization
must start appreciating the election process for what it means to people and
introspect as to why they do not integrate the good points in their structures
and systems. The several theories in management literature on feedback,
accountability and leadership styles do not come anywhere near providing a
meaningful template for embedding the power and relevance of a formal election
process, in a manner contextually relevant for organizations. Despite huge
progress on digital technologies and social media, most organizations are yet
to work on, let alone realize, this promise. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Democracy matters?<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The fundamental
principle of extending an electoral process into an organization is that
democratic and inclusive feedback is an important aspect of competent
management and leadership processes. There are arguments for and against it,
which are based on the perceived behaviour of members. The author would like to call these Theory X
and Theory Y of Organizational Democracy (OD). For ease of reference, we will
use the nomenclature XOD and YOD, respectively. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">XOD runs on the
following behavioural assumptions of members, all of them in negative interpretation
of employee mind-sets and capabilities:<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<ul style="margin-top: 0cm;" type="disc">
<li class="MsoNormal" style="line-height: 115%; mso-list: l1 level1 lfo1;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Given a choice, a typical employee prefers to avoid
responsibility rather than accept it.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: 115%; mso-list: l1 level1 lfo1;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Not all employees are equally knowledgeable and responsible
to opine constructively.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: 115%; mso-list: l1 level1 lfo1;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Averaging equally expressed opinions misguides managers like
the average depth of a river does.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: 115%; mso-list: l1 level1 lfo1;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A leader’s job is to govern based on structured plans rather
than unstructured feedback. <o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: 115%; mso-list: l1 level1 lfo1;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Grassroots feedback places undue power in the hands of those
whose job is to follow directions.<o:p></o:p></span></li>
</ul>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">YOD runs on the
following behavioural assumptions of members, all of them positive about the
ability of employees to fulfil higher responsibilities:<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<ul style="margin-top: 0cm;" type="disc">
<li class="MsoNormal" style="line-height: 115%; mso-list: l0 level1 lfo2;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Given a choice, a typical employee accepts responsibility
rather than avoid it.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: 115%; mso-list: l0 level1 lfo2;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Irrespective of knowledge, employees will be constructive and
responsible for progress.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: 115%; mso-list: l0 level1 lfo2;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Collective opinions provide a powerful guidance on
organizational health and strength. <o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: 115%; mso-list: l0 level1 lfo2;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A leader can reinforce his plans, however thought out they
are, with employee feedback.<o:p></o:p></span></li>
<li class="MsoNormal" style="line-height: 115%; mso-list: l0 level1 lfo2;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Grassroots feedback empowers those who execute with
participative ownership.<o:p></o:p></span></li>
</ul>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">YOD assumptions
clearly are more positive and have the potential to energize an organization
towards a positive culture.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Digital deficiency<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Most
organizations are well equipped digitally. They have evolved information
technology departments. Every organization has an intranet which is open to its
members. People have regular access to computers, tablets and smartphones as
well as wifi and cellular data services. People attend meetings with their devices
invariably in toe, or mostly utilizing them. The digital infrastructure is
designed and operated typically as a one-way path from the management to
employees rather than the other way. Required information which makes a member
more knowledgeable and competent is provided through the intranet: messages
from leaders, codes of conduct, organizational policies, standard operating
procedures, training materials, team accomplishments, and so on. It is rare,
however, to see the available digital infrastructure being utilized for
equitable two way communication. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Intranet
invariably identifies responses and feedback with persons. Unless the feedback
process is entrusted to a third party surveyor like Survey Monkey, it is quite
possible that confidentiality is compromised and people will be reluctant to
provide candid feedback. If leaders and managers accept the YOD assumptions,
and members have self-worth to be confident and self-disciplined to be
constructive, an organization’s digital highways and intranet portals can be
effectively utilized to collect analyse feedback on a 360 degree basis. Some of
the issues of leadership conduct encountered in certain non-governmental
agencies and autonomous entities would have been discovered and evaluated in
time with digital democracy in such organizations. As with any transformative
exercise, the change for a culture of digital democracy and honest feedback can
begin with a few small steps. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Experimental steps<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">There could be
several small experimental steps to usher in organizational democracy. For
example, as one logs into his or her computer system, the administrator could ask
a set of five simple questions: what do you set out to do today, how motivated
you are to carry out your taks today, how supportive is your leader expected to
be, how confident you are with your team today, and how happy you are with your
organization in the overall today. These are pretty universally applicable
questions that would fit any business or operational context and any level.
These can be expressed in the past tense as day-end questions on the computer
before one logs out. Participation in the questionnaire could be made mandatory
by making login and logout impossible unless these questions are answered.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">These five
questions help the company answer the following central themes: goal focus,
self-motivation, leader support, team alignment and organizational morale. If
each organization can find a way to encrypt these responses one would feel more
confident to provide candid and authentic feedback. An organization and
business savvy data analytics group can pick up important perceptions and
suggestions from the feedback. While daily responses may not be conclusive, the
management will certainly get to know what is trending. As the organization tastes
success and builds confidence, questions can become more specific to issues,
businesses, projects and people. Over time, digital democratic highways become
great instruments of widespread organizational participation and ownership.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Governance<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Digital
feedback is especially useful in promoting corporate governance. Monthly
executive leadership committees, usually headed by the CEO of the company, and
quarterly board of directors meetings, usually headed by the chairman of the
company, are the key institutions that facilitate and influence governance. It
would be great if at the beginning of the respective meetings, there could be a
digital feedback session `which asks certain key questions: how prepared are
you in addressing today’s agenda issues, how collaborative the team has been
internally to discuss cross-functional issues prior to the meeting, how
supportive you expect the CEO to be with respect to your key concerns, how
confident you are with your team on execution, and how happy you are with the
overall direction of the organization. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In respect of
board meetings the key questions could be: how informative the company has been
in preparing the directors for board meeting, how prepared the directors have
been for the board meeting, whether sufficient time has been accorded for
discussions for all topics, whether all directors have had a chance to express
themselves, whether the board committees have fulfilled their roles, whether
there is satisfaction on the strategic direction and execution of the company,
and how happy one is to serve on the board of the company. At the end of the
meeting, the same questions can be asked in the past tense with appropriate changes,
for the executive committees as well as the boards. Taken together, the entry
and exit polls would enhance the members’ awareness of their and the company’s
conduct in furtherance of the company’s and their aspirations.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Leader elections<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The higher step
in an organizational setting would be to usher in total organizational
democracy through the digital means. Every leader may, in such a system, have both
the right and responsibility to seek feedback from the members. Would such a
radical system wherein leaders are elected by subordinates lead to loss of
authority to execute? Would it force leaders to downplay people performance
issues and reward members irrespective of performance just for leaders to stay
in position? The answers to these questions may depend on the level of maturity
in an organization, and the periodicity with which such leadership elections
are held. There could also be other less disruptive or threatening options to
the classical organizational hierarchy and power system, such as a collegium
system of leadership selection. However, as typically, intellectuals are
involved in organizations responsive and responsible electoral systems are
probably better.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The ultimate
step in a virtuous digital democracy is to elect national representatives
through digital processes, anytime it is required. Though difficult to imagine
now, a few decades down the road, wifi may be so pervasive that instantaneous
digital elections through smart devices may indeed be possible. A more
practical and intermediate step would be to create a huge national governance
portal, in all national languages, wherein citizens can post their likes and
dislikes, convey their issues and seek solutions, and provide feedback and
ideas. With the biometric based Aadhar gaining ground and newer end-to-end
encryption technologies emerging, it should be possible to ensure authenticity in
the digital feedback. A huge data analytics infrastructure would, no doubt, be
required to support this but it must be viewed in the perspectives of
generating its own higher level employment and organizations, society and
nation, creating higher value through better leadership and citizenry with
mutual accountability. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 17, 2016<o:p></o:p></span></i></b></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-71418630160867740112016-05-16T03:30:00.000-07:002016-05-16T03:30:46.361-07:00Indian Retailing and Shopping Challenges: Spatial Myopia versus Asset Hyperopia<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Indian retailing industry is one of the most important
pillars of the Indian economy, together with agriculture, manufacturing and
infrastructure. Without retailing, what is produced or value added can never
reach consumers. Indian retailing sector is one of the largest in the world,
and is estimated at USD 500 billion annually, together with its mainstay of
logistics. It is also one of the most unorganized sectors with over 95 percent
of the shops being in owner-seller format, and dotted all over the urban and
rural urban landscape. Most importantly, it is one of the most valuable
employment generators, providing jobs for as many as 40 million Indians. Over
the last couple of decades, supermarkets and large format markets and shopping
malls have made an increasing presence felt but it is unclear whether they are
any more planned and futuristic than the unorganized ones, as this blog post
brings out.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">What is retailing for sellers is shopping for buyers.
Shopping can be classified into two types; the essential daily needs and the
lifestyle needs. It can also be classified as planned and impulsive. Availability
of appropriate shopping formats is essential for generation of consumer interest
and conversion of interest into actual purchase. The shopping and retailing
process is so complex that it requires the best of management processes, from
supply chain management to customer relationship management, with data
analytics thrown in. While retailing is a growth engine for India with more
purchasing power being placed in the hands of the burgeoning middle class, with
cascade down to the indigent sections too, flux and mortality in the retailing
sector are a matter of concern. There is a need for a relevant hybrid model of
retailing and shopping in India. This blog post discusses a few issues and
proposes a few approaches based on certain examples from the Chennai retailing
and shopping space.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Off the mark <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Several years ago,
Landmark was the most popular bookstore in Chennai. Its first and most favoured
store in Nungambakkam, a downtown shopping district was truly a landmark.
Landmark no longer is a store there. Landmark’s other two outlets in Spencer’s
Plaza and City Centre have also disappeared. Many would attribute Landmark’s
disappearance to the emergence of online reading habits on one hand and the
departure of original promoters and indifference of the new investors on the
other hand. Part of the truth is that Landmark’s decline also corresponded with
the decline of the host-malls. Many book lovers of Chennai feel sad about the
disappearance of Landmark. Yet, a new bookstore called Starmark (of Emami
Group), established in Chennai’s premier and now popular shopping multiplex,
Express Avenue has become quite a favoured place for book lovers. This seems to
be a case of brand ceding importance to location.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Viveks had, for decades, a flourishing retail business in
whitegoods and electronic goods in Chennai, located strategically in important
traffic intersections. Once famous for its store expansion and thronging crowds
for New Year sales, Viveks seems to be scaling down its operations due to lower
customer visits. Tata Group has its Croma chain of electronics stores in all
major cities. Of all the stores in Chennai, it appears that the one located in
Nungambakkam has the least footfalls. In contrast, Croma stores in Mumbai
airport seem to have the highest footfalls. Landmark, Viveks, Croma and such
other brands continue to be well known with high recall. Some of them are also
well located. The declining consumer interest is, therefore, more than a matter
of ordinary concern. These trends are
not company or retailer specific but are symptomatic of an emerging urban
shopping crisis.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Urban constraints<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Surprising it may seem, Indian cities are not planned for an
expansive retailing and comfortable shopping experience. Indian cities and
towns are essentially mixed use districts with residential, office and
commercial entities located jowl to jowl. The concept, as in America, of
segregated shopping districts, residential communities and business districts
does not simply exist in Indian cities. The shopping districts in USA provide
for huge parking areas that can cater to parking of several hundred cars. In
contrast, old age shopping pioneers like Viveks have practically no parking
space while the newer ones like Reliance, Croma and Girias have very limited
parking space just for a few cars. Shops located in shopping complexes such as
Express Avenue and Phoenix Shopping Mall have general parking space of the
respective malls but it is all paid parking space. In other words, most
standalone city retail shopping places are designed only for walk-in shoppers
while in respect of newer shopping malls even window shopping would cost
something!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">While this restriction and bottleneck has not caused any
specific migration from physical shopping to digital shopping, the potential
for exploiting full shopping potential and enhancing shopping ease is
completely compromised. Logically, this restriction should lead to construction
of more shopping malls with adequate parking slots and the conversion of
standalone shopping spaces into residential or building spaces. Possibly, shops
located on roads with high parking space (like those in Pondy Bazar) may be
able to still manage but shops in arterial roads with non-stop traffic
(example, Anna Salai) or in traffic intersections (like Viveks) have little
hope. As several thousand jobs and lives are dependent on continued prosperity
of vintage shopping spaces, urban constraints need to be addressed. Radical it
may seem, firms like Viveks may gain business if they convert their ground
floors into parking lots and move businesses upstairs! <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Penny wise, …? <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">The Indian urban shopping crisis is symptomatic of lack of ‘design
thinking’ in planning and setting up social utilities. When Viveks acquired
additional land space in one of the showrooms, it has chosen to use it for
product storage and display rather than for parking. One of the leading
hospitals has been planned in Chennai with the least possible parking space
causing enormous hardships to doctors, hospital staff, patients and caretakers,
besides vendors. Even when a new hospital was set up by the same group several
years later, lessons of parking insufficiency were not incorporated. The way
facilities are planned in India, the premise is simple but not wise: land is
considered premium, to be utilized to the last centimetre to create business
assets. This is indeed a myopic view of business which does not put people
first. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">The purpose of business, depending on its nature, tends to be
one or more of the following, illustratively: caring, diagnosing, curing,
entertaining, provisioning and educating. People are core and central to all of
these activities. Unless people are able to enter the premises comfortably,
leave their vehicles securely and circulate purposefully, people would be diffident
to enter unless essential. In trying to maximize space for business assets
firms are only sub-optimizing their own business potential. Indian service providers as well as service
receivers believe in ‘touch and feel’ physical form of buying and selling. With
India set to increase its dependence on personal transportation vehicles, the
pressure on parking space is only likely to increase. This characteristic can
only be protected by better spatial planning that balances people and assets. </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Shopping districts<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Fundamentally, India should come up with its own native
concepts of shopping districts where roads are out of bounds for vehicles and
are dedicated for pedestrians. Chennai’s Pondy Bazar is an ideal example of a
potential shopping district. More such districts are possible with some
innovative thinking on creating parallel vehicular ways, having elevated ways,
mass parking lots and comfortable connecting paths. This will not only reduce
vehicular transportation, congestion and pollution but also provide a clean
shopping experience to citizens. In addition, all large format shops should be
asked to create free parking spaces at land level and move the business up
(both literally and figuratively). New malls and supermarkets should, of
course, come with either ample basement parking or supplemental vertical
parking.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">There must be special arrangements for direct to consumer
sales by setting up farmers’ markets and small and medium manufacturers’
markets in major halls, public grounds and stadiums in urban areas. This would
enable a significant level of disintermediation and give fillip to niche
producers, for example of organic products and handicrafts. As new highways and
industrial corridors get constructed, it should be part of the planning agenda
to construct integrated mini shopping malls and food courts alongside the
highways at critical points. Planned purchase and impulse purchases could be fully
exploited with such spatial planning. Taking a more conservative approach on
shelf space and planning more circulation and stay space for consumers and
their vehicles, retailers can create a win-win for themselves and their
customers.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Rural planning<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Shopping should not be solely for elite consumer needs in
urban areas. Rural areas require significant retailing and shopping emphasis.
In fact, rural areas offer considerable potential for creating exchange
platforms and shopping districts. As development is sought to be brought to
rural doorstep with adoption of villages, it makes sense to allocate certain
amount of expenditure to create producer cum marketing yards and retailing cum
shopping platforms. This again would
enhance urban-rural connectivity. It is today considered appropriate to create
bypasses that skirt villages and towns. This actually is cutting them off from
the highway of development. To mitigate the situation, recanalization of
highways to the newly proposed yards would be helpful.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">One of the many ironies of life is that space is not usually
where demand is. Yet, human habitats have grown as much horizontally (moving
demand to where space is) as vertically (creating space where demand is). What
is applicable for human living is applicable for retailing and shopping too. Any
new construction in city should provide for excellent parking avenues. Creation
of multi-brand retail stores in outskirts and earmarking a space in all gated
communities for shopping malls that meet captive and external needs are some
needed measures. A few decades down the road, existing urban areas will connect
with the existing rural areas. That should not be through existing unplanned
urban chaos, exploiting every square inch of space; rather, it should be
through a more scientific expansive spatial planning that puts people first. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Posted by Dr CB Rao on May 16, 2016 <o:p></o:p></span></i></b></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-50960115420410424652016-05-15T05:54:00.000-07:002016-05-15T05:54:47.828-07:00Last to Market but Smart to Grow: Five principles of Late but Latest Entry<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">As the mid-year
approaches, rumours of Samsung trying to be a month ahead of Apple with the
respective new smartphones have started doing the rounds. Samsung is reportedly
bracing to launch its latest generation Note 6 phablet ahead of Apple launching
Apple 7 Plus phablet. First-to-market is a time tested strategy; it helps a firm
capture market as it gets formed and take market share when no competitor is
around. If the product is indeed a pioneering product and captures user
imagination, it could become a monopoly and create formidable entry barriers to
other manufacturers. On the other hand, if the product is poorly engineered it
could help the follow-on players to improve upon their products and excel even
more.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Being the first-to-market
is not an easy task; it requires advanced engineering, smart manufacturing and
agile marketing. The DNA of such firms tends to be unique. Over time, however,
as technology becomes relatively more accessible, the market starts becoming
more populated with several follow-on players. As market expands and firms are
able to segment their markets based on unique features and combinations, the
first-to-market concept could morph into first-to-market-segment concept. Not surprisingly,
in a free market economy there would be firms wanting to enter an industry at
all times. While it is easy to appreciate that the first-to-market company, and
early followers will have the bulk of market share, what motivates firms to
enter an industry despite being the last or near-last to enter is inexplicable.
<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Last-to-market<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Being the first-to-market
is measurable and understandable as a well merited aspiration. Being the last-to-market,
however, is less measurable as it is difficult to forecast who else will join
the late party. Being the last-to-market is also less understandable and tends
to be arbitrary. For example, any share less than 1 percent could be one
measure in one industry but even 5 percent may not be the right one for being
the last company in the race. Any production level less than the minimum economical
production quantity could be another measure. As costs keep coming down, the
sustainable minimal production quantity and minimal viable market share could
be coming down. </span><span style="font-size: 12pt; line-height: 115%;">Still, it could beat one’s imagination as to why a firm should,
in a manner of speaking, be the 100</span><sup style="line-height: 115%;">th</sup><span style="font-size: 12pt; line-height: 115%;"> firm to enter a market when
the same effort could be expended to be in the first group of entrants in
another field. </span><span style="font-size: 12pt; line-height: 115%;">There are, of course, valid reasons for the last-to-enter firms.
</span><span style="font-size: 12pt; line-height: 115%;"> </span><span style="font-size: 12pt; line-height: 115%;"> </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">For example,
the industry itself could be so fragmented that there may not be much
difference between the first-to-market and the last-to-market. Secondly, the
entry barriers could be so low that there is enough scope for even marginal
players to make an entry. Thirdly, there could so much outsourcing and contract
manufacturing occurring in the industry that being the 100</span><sup style="line-height: 115%;">th</sup><span style="font-size: 12pt; line-height: 115%;">
manufacturer could be infinitely easy. Fourthly, certain firms have resources
that can be marginally deployed in easy-to-enter industries without big
expectations. Fifthly, managerial mind-sets of operating in highly established
market segments prompt such late stage entries. There are many examples with
varied technological and marketing characteristics that confirm to the above
criteria. </span><span style="font-size: 12pt; line-height: 115%;"> </span><span style="font-size: 12pt; line-height: 115%;">Examples are Indian formulations
market, global smartphone market, Indian processed food market, and so on.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Turning the tables<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Admittedly, a
pioneering company has many strategic advantages which can be further sharpened
to snuff out completion from late entrants. These include lowering of prices,
cross-subsidization, differentiation, geographical expansion, locking up
distribution channels, buying up retail spaces, aggressive advertising, product
extensions, product innovations, market segmenting, sales discounts, service
offerings, aggressive advertising and so on. As a result, the later one enters
a market the smaller one’s market share could be, empirically. A 1995 study by
Gurumurthy Kalyanaram and others in Marketing Science suggested that the new
entrant’s forecasted market share divided by the first entrant’s market share
equals, very roughly, one divided by the square root of order of entry of the
new entrant. It is evident as a market gets crowded, the last entrant would
have miniscule market share. Yet, empiricism may not always be the only
guidepost. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In normal
social life, we have countless stories of backbenchers in schools and colleges
becoming top rankers as well as the poor and underprivileged reaching top
careers. A combination of aspiration and optimism, diligence and commitment,
grit and energy, knowledge and application, positioning and a bit of luck helps
in such amazing accomplishments. Late entrants to industries and markets
similarly have opportunities to prove their mettle and turn the tables on the
incumbents. Admittedly, whatever ‘magic’ late entrants can spin the incumbents
can also carry out with their superior resources and manage to maintain or
expand their lead. However, performance is not always only a function of
increasing size and scale. Incumbency also leads to complacency of
invincibility while late entry is backed by the passion of the underdog to upstage
the favourite! <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Late entrants<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Late entrants are
of two types. The first type is a well-endowed corporation which has decided to
make a belated entry into an industry which is already catered to by the
existing players. Entry of Reliance Jio into telecommunication services is an
example. They have all the resources to use any of the pioneering advantages
despite the late entry, and secure a market space. Such firms are not a subject
of this blog post. The second type is a more humble entity or individual with
just the necessary resources to make a modest entry. They may not have the
resources to claim any of the advantages that large late entrants have but are skillful
in securing a market hold. They typically would adopt the following five
principles.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Smart outsourcing<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Every company
needs design, manufacturing and marketing capabilities to put a product into
the market place. Typically, each of these takes 25 to 30 percent of total
investment, aggregating to 75 to 90 percent, leaving 10 to 25 percent of the
investment for other activities. A late entrant deploys smart outsourcing in as
many areas as possible to reduce the typical investment to just a small
proportion of what an integrated corporation would need. The smartest
outsourcer would outsource all operations, close to 90 percent, and focus only
on strategy and oversight. The typical outsourcer, however, may choose to
invest in one of the three key areas, be it development, manufacturing or
marketing, and strategy. Smart outsourcing requires smart selection of the
outsourcing partner, and providing a compelling value creation to the partner
to break into the market together.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Smart costing<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It is not so
well recognised that costing, and consequently pricing, can make or mar a
product. Purist accountants who fully burden a product with all the functional,
site and corporate overheads and management inefficiencies literally kill the new
product. In a pioneering or first batch entry, there could be scope for
recovery prior to market growth but for late entrants to mature markets, fully
burdened costing is a sure way to defeat the very objective of entry. Strategists
must realize that market toehold and market expansion are the fundamental
requirements for a product to survive. It is necessary to secure an entry and
expansion, even at a loss, to be able to recover later. Smart late entrants
focus on smart costing and smart pricing, and in most cases carry their
outsourcing partners along in this strategy. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Smart differentiation<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Differentiation
is more common today than envisaged. Differentiation is confused with having
variety. Having just a few products does not lessen differentiation (eg., as in
the case of Apple) nor would a profusion of products provide differentiation
(as in the case of Xiaomi, Huawei and Meizu). Oppo’s selfie phone with industry
leading 16 MP front camera is an example of focused differentiation. Leveraging
the scientific validation of Indian herbs and spices, a late entrant to the
Indian masala product market could create new formulae for differentiation. An ice
cream maker may capitalize on seasonality of fruits to develop seasonal special
entries. </span><span style="font-size: 12.0pt; line-height: 115%;">Late entrants
would need to focus on micro differentiation to make a smart entry.</span><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Smart
communication<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">While incumbents,
pioneers or fast followers, may focus on aggressive advertisement, late entrants
must focus on smart communication to be seen as providers of products which are
qualitatively feature-rich, affordable and differentiated. Outsourcing helps
the late entrants to assimilate the best of breed product features, from
ingredients to packaging, and deliver them through multiple channels. Brand
recall can be maximized with smart communication rather than just aggressive advertising.
Out of several advertising campaigns, one normally recalls only those which
convey a central message in a creative fashion. Airtel 4G advertisement, for
example, says a lot without saying anything explicitly about the widest
cellular coverage.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Smart organisation<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In all cases,
organization is important to secure and sustain market superiority. Late
entrants, however, can bridge a lot of gap with an organization that is agile, flexible
and adaptive with the right culture. Managers of a smart organization will have
a first-hand feel for marketplace as well as manufacturing base. They should
have a keen understanding of what makes customers switch brands and select
outsourcing partnerships that provide such advantages. Smart organisation tends
to be lean and non-corporate in structure and systems. Their relationships with
product partners and retailing channels help the late entrants secure competitive
advantage for the firm as a whole. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Scaling up<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Late entrants
certainly have a chance to enter a crowded market, and grow up with the smart
formula discussed above. However, such firms have to contend with the fact that
the incumbents are bound to hit back after experiencing the initial
disequilibrium while even later entrants would try to replicate the success of
the (earlier) late entrants. The challenge for reasonably successful late
entrants is how they can move up to the next trajectory; solutions could emerge
from external support systems rather than persist with the same success formula.
<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Simple
successes lead to industry and private equity community taking notice. They are
brought into a higher trajectory through mergers and acquisitions and/or
external financing. The typical late entrant may thus gain huge power based on
the late entry success but could become a typical incumbent through the step-up
process. That would be a bit unfortunate for the firm but for the ecosystem it
would be a benefit; as late entrants turn incumbents, new late entrants join
the industry, keeping the ecosystem rich and bright. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on March 15, 2016<o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-33881056191641476612016-05-14T08:03:00.000-07:002016-05-14T08:03:31.734-07:00A Theory of Business Relationships: Five Principles for Success and Sustainability<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Relationship is at the core of social evolution. Relationship
is the way in which two or more people or things are connected with each other.
While relationships are usually interpreted in terms of family ties and friendly
moorings, relationships extend far beyond family cocoons or friendship circles.
In a broader perspective, relationship is the way in which two or more people
or groups regard and behave towards each other.</span><span style="font-size: 12pt; line-height: 115%;">
</span><span style="font-size: 12pt; line-height: 115%;">Many such relationships that are beyond the family system are
experienced by us; for example, the teacher-student relationship, the
doctor-patient relationship, the employer-employee relationship, the
landlord-tenant relationship, the people-government relationship, the buyer-seller
relationship, the multiple stakeholder relationships, and so on. In fact,
virtually everyone has a relationship with someone else he or she deals with,
in one way or the other.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">At the very basic level, awareness of one another results in
just a cognitive relationship. As it evolves into an acquaintance, a reciprocating
relationship develops. Reciprocation could just be in the form of exchange of
greetings or could extend to exchange of information or other material factors.
While one could experience hundreds of reciprocal relationships, only a few
would evolve into sustainable relationships. For a relationship to be
sustainable, the relationship must traverse through three stages. The first is
rapport, the second is credibility and the third is trust. Rapport exists when
two people or agencies have a close and harmonious relationship, understanding
each other’s feelings and ideas, and communicating well. Credibility exists
when one stands convincing, believable and capable of fulfilling the promise,
in a consistent manner. Repeated demonstration of credibility leads to a firm
belief in the truth, reliability and ability of someone or something. Trust has,
in most cases, a material fiduciary responsibility and accountability.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Business relationships<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Business relations are varied; from one-off casual
interactions to legally binding business contracts, there are many ways in
which business relations evolve. Some are business to business (B2B) while some
are business to consumer (B2C). There are others like business to government
which are legal and regulatory, and certain others such as business to society
that are more qualitative and abstract. Whatever be the nature of relationship,
the three step process defined above, and comprising ‘rapport, credibility and
trust’ is a must. Even in respect of one-off transactional relationships, the
process builds value for the present or for the future. Business managements have
traditionally seen financial ownership and/or commercial partnership, with
legal structuring, as the predominant basis to form and protect relationships,
but there is more to it.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Relationships are also subject to competitive dynamics. Exclusive
dealerships have, in the past, been the preferred relationships for sales and marketing.
Over a period, multi-brand dealerships have started appearing (whether in the
same dealer format or co-owned dealer format). Simultaneously, companies
started setting up their own selling plazas (for example, Maruti Nexa). Just as
social relationships are disturbed by dynamics of families and friends,
business relations are also disturbed by competitive dynamics. Any amount of
legal mandating may not help when competitive dynamics disturb. These influences
could be for cost and price advantages or growth compulsions. These could also
be due to lack of relationship between the people who manage the relationships.
<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Interpersonal
complexities<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<i><span style="font-size: 12.0pt; line-height: 115%;">Business relationships are far more
complex than usually imagined. It is not as simple as measuring performance or
profits as generally thought to be. Each business relation is, in fact, a
complex maze of interpersonal relationships.
There are three such principal complexities</span></i><span style="font-size: 12.0pt; line-height: 115%;">. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">The first is generational complexity</span></i></b><span style="font-size: 12.0pt; line-height: 115%;">. When first set up, later managed or
eventually terminated, it is people who interpret and endorse or negate a
business relationship. A business relationship has four distinct phases;
commercial discovery, legal templating, operational performance, and
performance review. All the phases are carried out by individuals on either
side of the relationship. As individuals change, not only the dynamics change
but the initial perspectives tend to get lost.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">The second is horizontal complexity</span></i></b><span style="font-size: 12.0pt; line-height: 115%;">. Although a transaction is fulfilled
at one end of a business value chain the actual utility could be far out in the
value chain. A typical example is a vendor relationship which could impact
manufacturing. If persons leading or operating at different points of value
chain cannot communicate holistically and meaningfully, even simple performance
issues could lead to enormous noise in the system and destabilize
relationships.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">The third is vertical complexity</span></i></b><span style="font-size: 12.0pt; line-height: 115%;">. Certain business relationships are initiated,
structured and signed off at the top between senior leaders, and handed over to
operating teams below to execute. While the jobs may be handed down, the
perspectives and the subtleties may never be cascaded down. In certain other
cases, a business relationship may be established at the operating level but
could come to the notice of, and review by, senior leaders at a later stage.
The juniors may not be able to explain appropriately, or even lack the
strategic approach the senior leadership now takes. This could also create
noise in the system. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<i><span style="font-size: 12.0pt; line-height: 115%;">Given that business relationships are
built on interpersonal foundations, the need for a systemic yet a people
oriented approach to business relationships is self-evident. Five principles
for successful and sustainable business relationships are discussed below.<o:p></o:p></span></i></div>
<div class="MsoNormal" style="line-height: 115%;">
<i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Five principles<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">There are five principles of trustworthy and trusting
business relationships that can be built with interpersonal trust model.</span><span style="font-size: 12pt; line-height: 115%;"> </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Strategic<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Not every business relationship is, or needs to be, made at
the CEO or CXO levels. Consistent with the nature of business relationship, the
highest leader must, however, be involved. A new green field expansion by a
component supplier needs certainly CEO to CEO partnership. However, an
arrangement for housekeeping will not require such intervention; yet, within
the boundary at least the functional managers must be involved from either
side. The involvement of senior managers and leaders helps in the avoidance of
‘penny-wise and pound-foolish’ approaches and instead focus on long term value
creation. Involvement of strategic leaders ensures that operating executives
are not threatened by self-perceived need to save the pennies at the cost of
long term value. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Risk based<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">All relations aim at rewards. It would be fallacious,
however, to assume that there are risk-free approaches to business
relationships. The more novel a business relationship is, the risk profile
could be higher even as its competitive advantage could be higher. If the
relation follows a beaten or established path, it suffers from another type of
risk of eroding margins. No amount of legally binding contractual language can
identify and provide for all current and future risks. Interpersonal rapport,
credibility and trust help in addressing risk professionally. One may have a
perfectly collaborative relationship with a competitor (like Apple and Samsung
have) when the risk and reward tracks are not intermixed, and respective
leaders are allowed to deal with competitive and collaborative aspects
separately.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Stage-gated<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Business relationships should not be founded on expectations
of immediate miraculous results. Adequate time should be allowed for
operational teams to strike rapport, prove credibility and establish trust. Leaders
have a particular responsibility in selecting lead managers who have positive
interpersonal approaches and sound fundamentals. Many times, conceptually sound
partnerships flounder due to cantankerous managers who are self-obsessed rather
than focused on mutual value creation. If the first stage of rapport does not
take place, the sponsor-leaders have a responsibility to either counsel the
lead managers or replace them with more harmonious ones. Similarly, if
credibility is not established with repetitive consistent performance, the
processes must be relooked. Normally, a
quarter of rapport building and another quarter of credibility establishment,
at the maximum, may be allowed to assess the precursors to trust. And,
transparency is the key to assessment of trust.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Transparency<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Transparency starts from the initiation of a business
relationship. Mature leaders realize that placing mutual expectations,
strengths, weaknesses and resource capabilities on discussion table help
establish the fundamental rules of transparency in a business relationship.
Many do not realize that understanding the weaknesses of partners helps build
greater strengths in the relationship as a whole. For example, when an Indian
outsourcing partner does not have global sourcing strength, and discloses that
weakness upfront the sponsoring client would be able to leverage its own global
sourcing network to meet the gaps. This
transparency may cost the outsourcing partner a pricing advantage, and the
sponsoring company an overhead burden but will provide to both greater business
value. Transparency helps in win-win alliances as well as in developing trust
to handle risks and share rewards equitably.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Codification<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">There are two ways to handle interpersonal complexities,
whether generational, horizontal or vertical. One way is to have the same
people handle the business relation, longitudinally in time, horizontally in
value chain, and vertically in hierarchy. In this case, institutionalized
knowledge and practice keeps building on established relationships. However, ‘people-perpetuity’
is hardly possible. People have to be moved in and out of positions, and
careers; and even if they stay static, changes in business environment with new
competitive dynamics induce changes in people. The only insulation can be
through codification of perspectives, processes and expectations with which a relationship
is set up, and the implicit and explicit value from the relationship. Partnership
codification must be a living document, enriched with progressive setbacks and
accomplishments.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Partnership as
relationship <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Partnership, in a legal meaning, is an association between
persons or entities which involves pooling of all resources and sharing of all
assets and liabilities, usually in the ratio in which respective resources are
brought in by the parties. Partnership, in practice, is the consummate form of
a relationship which brings in the concepts of sharing equally and equitably.
Relationship is a generic way of two entities connecting with each other while
partnership is a customized definition of equitable relationship. Partnership
signifies a shared future. There are times when partnership itself has to move
an even more sublime relationship. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Partnerships are challenged when one of the partners is beset
by serious business troubles for extended periods of time. Imagine the
relationship between a truck maker who makes only trucks and is hit by
recession and a component maker who caters to all types of automobiles, some of
them growing in demand. If the component maker agrees to price reductions to
support the truck maker and stays on through the cycle of recession
collaboratively without shifting capacity, it goes beyond partnership; it will
be companionship. Strange it may seem in a hardnosed business context,
companionship is the sublime form of business relationship, as in personal
relationships.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Posted by Dr CB Rao on May 14, 2016 <o:p></o:p></span></i></b></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-17242164166530097902016-05-13T09:43:00.002-07:002016-05-13T10:57:23.817-07:00A Business Leader’s Soliloquy: When Management Jargon Becomes Communication Bandwagon!<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<i style="line-height: 115%;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">People need language to communicate. Over time, management experts
have developed a unique business language; one interesting, it has now become
annoying. It helps communicate something
odd about them, rather than help them communicate evenly with their colleagues.
This business language comprises several phrases and epithets which have
achieved a cult status in managerial and leadership circles. Strangely, this
language is not affected either by gender nor generation. It is pretty universal.
Developed once upon a time (but not so long ago) for impact, much of the
business language has become cliché-like, annoying jargon. Not to be deterred,
self-appointed masters of business communication continue to revel in its use;
and some are sworn to it. Here is one such soliloquy!</span></i></div>
<div class="MsoNormal" style="line-height: 115%;">
<i style="line-height: 115%;"><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">As I wake up each
morning, peeping out of the window, I remind myself of my <b><i>high-flying</i></b> penchant for <b><i>blue
sky thinking</i></b>. Sure, I will be aided by my consultants landing today
with their own <b><i>helicopter view </i></b>of affairs here. While they may urge me to do
some <b><i>out
of the box thinking</i></b>, I will demonstrate to them how I can pick <b><i>low
hanging fruits</i></b> by myself ahead of their developing a <b><i>strategic
staircase</i></b>. As I take shower, I do get my <b><i>idea showers</i></b> too. I
realize my team does not have the required <b><i>bandwidth </i></b>but I consider it my responsibility
to <b><i>cascade</i></b>
all my ideas and create <b><i>core competencies</i></b> in my team. Surely,
I will <b><i>run up the flagpole</i></b> a couple of my ideas and see whether they
would help me <b><i>square the circle</i></b>!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Thinking of
teams, I would like to get all <b><i>my ducks in a row</i></b> but with the kind
of team I have, I am <b><i>as dead as a duck</i></b> in facing the
competition. I tell my Human Resources (HR) team members repeatedly to <b><i>look
under the bonnet</i></b> but they hardly are <b><i>able to move the needle</i></b>
on this. <b><i>Going forward</i></b>, I need to synergize with my HR head so that we
can <b><i>get
to the table</i></b> the best talent, but I am unable to get my message <b><i>over
the wall </i></b>even with him. I am unhappy that instead of <b><i>running
with this</i></b> concept my team keeps <b><i>moving the goal posts</i></b>. At this rate
zero revenue will not be a <b><i>ballpark figure</i></b> for my next budget.
I need to induct some really <b><i>best of breed talent </i></b>to achieve a <b><i>paradigm
shift</i></b> in our thinking and performance.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Indeed, I <b><i>touched
base</i></b> with my CEO about this troubling situation. Instead of facing the
issue squarely, he <b><i>dropped the ball</i></b> when he said that <b><i>we should take this offline</i></b>.
Much as I want to <b><i>take to the next level</i></b> my team’s performance, <b><i>pushing
the envelope</i></b>, here is my CEO who is <b><i>not even reactive, let alone be
proactive.</i></b> People think that he and I are <b><i>joined at the hip, </i></b>and
that I have a lot of<b><i> face-time with him</i></b>; but this episode shows our <b><i>convergent
divergence</i></b>! I am not going to be put off by this; I am going to <b><i>hit
the ground running, putting the pedal to the metal</i></b>. I want to <b><i>give
my 110 %</i></b> to my leadership role. I know that our company is debt laden;
all the more reason why I should <b><i>leverage</i></b> my intellectual capital.
That is a <b><i>win-win paradigm</i></b> for boundless <b><i>synergy</i></b> of intellectual
finance, signifying <b><i>deep-bonding</i> of </b>equity capital with bank debt. I know all our <b><i>stakeholders
</i></b>will be thrilled with the <b><i>ROI </i></b>all this will entail!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">I am one who
would like to <b><i>drill down, </i></b>in fact<b><i>, deep drill down,</i></b> on issues, <b><i>benchmark</i></b>
against competition and <b><i>crystallise</i></b> solutions. Some team
members may <b><i>play hardball</i></b> but I have enough support to <b><i>bulldoze</i></b> them. I want
that every one of my team members should <b><i>sing from the same hymn sheet</i></b> but I
know that there some who don’t still get that I am <b><i>results driven</i></b>. I have
decided to <b><i>bite the bullet</i></b> and take such people <b><i>out of the loop</i></b>. After
all, what can be a greater party than all of my team members toeing the <b><i>party
line</i></b>? The <b><i>bottom line</i></b> of my management is that when the <b><i>push
comes to shove</i></b> I will not be hesitant to look at the <b><i>one
throat to choke</i></b>. Actually, that is the <b><i>million dollar question</i></b>!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Each day, from
my <b><i>30
thousand feet perspective</i></b>, I look for the <b><i>ideas that have got legs</i></b>,
with the hope that even if I can’t sprint to my goal posts, at least my ideas
will! I know I do not have <b><i>enough boots on ground</i></b> but it is all
about <b><i>synergising </i></b>and<b><i> leveraging</i></b> available guys so that
we can do <b><i>more with less. </i></b>I am not a <b><i>micro-manager</i></b> but I have a <b><i>hands-on
style</i></b>; I would like to <b><i>put a record on, and see who dances.</i></b>
I view my people <b><i>in buckets</i></b>; performers and non-performers; mind you, I do believe
in <b><i>incentivizing
</i></b>performers. In all this performance appraisal process, however, I don’t
wish to wait the whole year as it is not good <b><i>to let the grass grow too long
under me</i></b>.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">I want to <b><i>engage</i></b>
with my people as they are my moving, and also removable, assets. Every day is
a <b><i>new
beginning</i></b> for me with them, and I treat every issue as a <b><i>new
horizon</i></b>. I believe in <b><i>root and branch review</i></b> that helps me
with <b><i>hits
and misses</i></b>. I am not married to my team irrespective of performance;
actually I believe in <b><i>asynchronous engagement</i></b> and <b><i>conscious
uncoupling</i></b>, as far as employee relations are concerned. I am <b><i>issue-focused,
data-driven </i></b>and<b style="font-style: italic;"> results-oriented, </b>with<b style="font-style: italic;"> a </b><b><i>stage-gated approach</i></b>. You see, I am a <b><i>visionary</i></b>,
and whenever my team members struggle to keep pace with me, I encourage them to
do some <b><i>white space thinking</i></b>, and try to <b><i>cross the chasm </i></b>to reach
me. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It is not that
I don’t encounter failures; every time we fail (as is usual most of the
times!), we <b><i>go back and sharpen our pencils</i></b> – so much so that on most
occasions we have no pencils left! That said, I know how to manage the <b><i>optics
of failure</i></b>. I believe in <b><i>disruptive technologies</i></b>, and <b><i>creative
destruction</i></b>, with a <b><i>fuzzy vision</i></b> as a <b><i>highway</i></b>
of growth. I know it is <b><i>radical philosophy</i></b> and there are not
many who can <b><i>step up to the plate</i></b> with the leadership <b><i>USP</i></b> I have. I believe in kicking
up a <b><i>perfect
storm,</i></b> every now and then. That’s my formula for a <b><i>balanced ecosystem, </i></b>whatever
it means. I don’t like people who keep saying that it is not our <b><i>core
competency</i></b> or that we should <b><i>stick to our knitting</i></b>. You see,
heart of heart, I believe I am a <b><i>one-off</i></b> leader. I take a <b><i>ready-aim-fire</i></b>
approach to problems.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Long back I worked
in a food corporation where I was told silos are very important (to store foodgrains,
of course!). Now, in this organization, <b><i>breaking silos</i></b> is my <b><i>thematic
template </i></b>and<b><i> cultural anchor</i></b>. I don’t mind <b><i>sounding like a broken record</i></b>
here (about <b><i>breaking silos</i></b>, that is!). I keep telling my people – business is
all about <b><i>building value</i></b> not <b><i>building silos</i></b>! Having failed in
that I coined a new <b><i>organizational mantra</i></b> – <b><i>bridging the silos!</i></b> We do face some <b><i>headwinds</i></b>
there but I am an <b><i>eternal optimist</i></b>; it is all a question of <b><i>seeing the glass half full or
half empty</i></b>! Transparency is always the <b><i>big elephant in our meeting rooms</i></b>.
<b><i>At
the end of the day</i></b>, we as leaders need to <b><i>walk the talk</i></b>; if there
is no talk how can we walk? I <b><i>wear two hats,</i></b> therefore, one that
of an optimist, <b><i>seeing a door where there is a wall</i></b>, as I said earlier, and the
other that of a pessimist – <b><i>seeing a wall when there is a door</i></b>!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">I would like our
meetings to be <b><i>fun at work</i></b>! I want to keep an <b><i>open door</i></b> system and I don’t
want <b><i>hard
stops</i></b> but I can’t help being <b><i>time-titrated</i></b> as I am <b><i>busy
like a bee</i></b>. As we take up each problem, I want to <b><i>peel back all the layers of the
onion</i></b>. I wish to go <b><i>granular</i></b> in analysing problems and
be <b><i>scalable
</i></b>in providing solutions. I want my team to be chained to the concept of <b><i>value
chain, </i></b>on a<b> holistic basis</b>. I
want my people to be <b><i>intrapreneurs</i></b>. I admit that my
tenure has seen more problems than solutions but that’s how irony of life is!
My job is <b><i>managing the paradoxes</i></b>. I rely on my <b><i>80-20 rule</i></b> to action on
the right issue. Of course, I have <b><i>my 2 cents of opinion</i></b> on every issue
but I need to <b><i>manage expectations</i></b> that I can provide solutions to problems,
with <b><i>white
board</i></b> and <b><i>zero base</i></b> approaches. I want to <b><i>keep everyone in loop</i></b> and
<b><i>circle
back</i></b> even when I miss my meetings. At times, I feel that I have <b><i>too
many chefs</i></b> in the meeting room. I honestly want to do a <b><i>level-set</i></b>
of my team every now and then.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">I am the boss
but I am a team player. I don’t want my people <b><i>thrown under the bus</i></b>.
Yet, I carry <b><i>too much on my shoulders</i></b>, but mind you, my team members seem to
<b><i>have
a chip on the sh</i></b>oulders that they are the <b><i>victims</i></b>. I feel I am
actually the victim here! Probably, I am used to <b><i>drinking from the fire hose</i></b>!
I keep telling my people to <b><i>put our game faces on</i></b> but there are
not many who are ready for the game. They don’t realize that business is all
about <b><i>basic blocking and tackling</i></b>. I try to inspire people by talking
about <b><i>the next big thing</i></b>. I like <b><i>calibrating</i></b> me against myself!
Comparing me with anyone else is certainly not an <b><i>apple to apple comparison</i></b>
(of course, I am the apple)! Someone said that it is impossible for my team to
study me; he asked, after all, is it possible to <b><i>boil an ocean</i></b>?<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">I am a firm
believer that we should be more focussed on <b><i>go-to-market</i></b> and <b><i>first-to-market</i></b>
strategies each day, rather than be preoccupied with go-to-home and
quick-to-home habits. I want to be <b><i>customer-focused</i></b> and <b><i>technology
driven</i></b>. For that I look for <b><i>bleeding
edge</i></b> technologies; leading edge ones are passe’ to me. I believe firmly
that <b><i>Sunset
industries</i></b> require <b><i>Sunrise technologies</i></b>. Technology gets
us a greater <b><i>mind-share</i></b> from our customers. And with some <b><i>tailwinds
</i></b>in business, we can do great. I want my team to <b><i>get its arms around</i></b> the
technology animal. I know that technology is just one aspect, and that there
are <b><i>lots
of moving parts</i></b> in business management, but technology is the <b><i>burning
platform</i></b> for most companies, including mine. Sure, technology strategy
requires <b><i>crystal ball gazing </i></b>but I <b><i>punt</i></b> heavily on my capabilities in
this. <b><i>By way of housekeeping</i></b>, I keep a <b><i>laundry list</i></b> of all the
potential <b><i>growth triggers</i></b>, though. I may sound immodest but I would like
to be called technology <b><i>evangelist.</i></b> <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><b><i><br /></i></b></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">I have decided
to <b><i>solution-architect</i></b>
my organization to meet the challenge. I have the <b><i>‘D’</i></b> and <b><i>‘R’</i></b>
for this as the leader. First of all, I will deploy <b><i>horses for courses</i></b>,
keeping technology and business separate. I will create a <b><i>SWAT team</i></b> to identify the
technology direction, and a <b><i>Tiger Team</i></b> to actually source the
technologies. I will establish a <b><i>swim line</i></b> of communication. I will
go for <b><i>high-impact</i></b> technologies and <b><i>reach out</i></b> to every director
to support. I want my firm to have its own <b><i>silicon valley</i></b> even as it grasps
every external <b><i>window of opportunity</i></b>. But at the same time, I do not wish to <b><i>reinvent
the wheel.</i></b> If after all this,
there is no <b><i>buy-in</i></b> from anyone, so be it; <b><i>it is what it is! </i></b>I want
my organization move from <b><i>good to great</i></b>. If needed, I will <b><i>right-size</i></b>
it but I will also get <b><i>next-gen</i></b> people and practices. I
know it is not <b><i>plug and play</i></b> but I think I can have an <b><i>energising effect</i></b>, and <b style="font-style: italic;">electrifying
impact </b>for <b><i>empowering</i></b> people. This is my big challenge and this is where <b><i>the rubber meets the road!<o:p></o:p></i></b></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><b><i><br /></i></b></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">I keep telling
my people that if they are able to <b><i>wrap their heads around</i></b> my challenge
and <b><i>colour
outsides the lines</i></b>, they should do not be <b><i>keeping their ideas in the
parking lot. </i></b>I am eager to <b><i>monetize</i></b> their <b><i>inputs</i></b> with my <b><i>delivery</i></b>.
I will never make my employees <b><i>out-of-pocket</i></b> with me, I assure them.
Still, I am unclear why they do not appreciate that I am <b><i>putting a stake in the ground
here</i></b>. If only they are <b><i>aligned</i></b> with me, my performance can
indeed <b><i>go viral! </i></b>I just need a few <b><i>quick wins</i></b>. It is <b><i>no
brainer</i></b>, really. I am not clear why my people do not appreciate my <b><i>game-plan.
</i></b>I thought my communication is always <b><i>so crystal-clear!!! <o:p></o:p></i></b></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><b><i><br /></i></b></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 13, 2016</span></i></b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><o:p></o:p></span></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-4743784579611136122016-05-12T07:05:00.000-07:002016-05-12T07:05:52.705-07:00Banking to Bankruptcy: Systemic Solutions for Solvency<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Recent news
items in business dailies of India have carried two important messages. The
first is that India inc’s greatest ‘fire sale’ is underway to reduce the
colossal levels of debt accumulated by the Indian companies. The second is that
the India will soon have as a law, The Insolvency and Bankruptcy Bill 2015,
which was passed by the Lok Sabha as well as the Rajya Sabha (the “Law”). The
first is validated by speedy developments such as Tata Steel placing its assets
on the block, JSP striking a deal with JSW to sell off the former’s power plant
and GMR selling off certain stake to Malaysian entity. At the same time, a news
item on JSW trying to bid for Tata Steel’s UK assets makes one wonder whether
the lessons of leveraged expansion and growth have been fully appreciated.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The development
on the Insolvency and Bankruptcy Bill is welcome, in that it provides a more
contemporary definition of bankruptcy and insolvency, substitutes several
archaic laws by the new single Law, provides a safety net for workers, and
creates a board for regulating bankruptcy and insolvency. The government
believes that it would restore the balance between the companies and creditors
and also strengthen the debt recovery mechanisms. As per expectations, it will
reduce the time to resolve bankruptcy and insolvency issues to as low as one
year. It also proposes to set up the Insolvency and Bankruptcy Board of India.
It provides for setting up information
utilities to collect information on debtors and serial defaulters, under the
aegis of the Board. It is also hoped that the Law will move India up in the
global rankings in speed of doing business.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Cart before the horse?<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The whole
debate on current undeclared bankruptcies and future relief through the Law
begs certain basic questions. It is true that free market economy is all about
free entry and free exits of companies but it presupposes that all stakeholders
including the companies themselves will make their best efforts to establish,
manage and grow their businesses. It also presupposes that investors and
lenders conduct their due diligence prior to investing in or lending to
companies. In other words, a company, even in a free market economy, has no
business to fail except for reasons beyond the control of companies,
governments and nations. Poor management or ignorance of competitive dynamics
could also lead to failure but companies and stakeholders must be agile enough
to spot the creeping inefficiencies and take remedial action.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The current
excitement on fire sale of the stressed assets well as the Law on bankruptcy
and insolvency does not seem to address the root cause of the current malaise;
rather it focusses on the unsavoury endpoints. Given the way Indian companies
and lenders operate, quite possibly, there could be a flood of applications for
declaring bankruptcy and insolvency. The current excitement does not also
address why the earlier measures such as corporate debt restructuring (CDR),
strategic debt restructuring (SDR), national company law tribunals, debt
recovery tribunals, SARFAESI act or asset reconstruction agencies have failed
to deliver. Without addressing the root cause for the scale-down of performance
concentrating on winding up of companies may rank the country up in the ease of
doing business in the eyes of multinational corporations and multilateral
funding agencies but may not lead to overall business health. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Root cause<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The Governor of
Reserve Bank of India has stated that the root causes of bad loans or
non-performing assets are many, and all of them cannot be attributed to malfeasance
by promoters or mismanagement by executives. He opined that huge delays in land
acquisitions and revocation of rights and licenses by governments and courts are
two principal causes beyond the control of promoters and managements. The issue
probably is not one of assumptions going awry; rather the issue is why the plans
are not updated to reflect changes. More fundamentally, the plans as drawn up
originally tend to be highly optimistic, in terms of investments, lead times,
costs and prices with a view to satisfy banks and obtain funding. When the
environmental changes superimpose further unanticipated delays and changes, the
compounded impact would be extremely high.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Imperfect
business plans, failure to course-correct the plans, lack of flexible repayment
options in line with realistic business growth, and lenders’ anxiety to have
early paybacks, together, constitute the root cause for bad loans to creep in
at the first instance. What comes up in late stages as a CDR or SDR plan would
actually be the right one that should have been operating in the first place.
Also, the multiplicity of lenders with every lender trying to get some share of
the loan portfolio without really going into the fundamentals is another cause.
What normally is done at the endpoint, like establishing a joint lenders forum,
electing a lead banker, having strong bank nominee on boards and having third
party review of plans, should be done at the very beginning of a firm’s journey
on debt path. Rather than set up an insolvency board, the need is for setting
up solvency boards which objectively analyse the business plans at the
beginning.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Systemic solutions for solvency<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Businesses are fundamentally set up to grow and be profitable. At
the very least they must aim to be solvent. Attempting to be solvent is not a
conservative and defeatist approach; rather it attempts to correct distortions
that could arise in the mad scramble for scale, scope and market share gains.
The following principles of solvency are useful to consider in structuring and
evaluating debt proposals.<o:p></o:p></span></i></div>
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<i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Sector prudence<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Debt to equity
ratio is still the critical ratio that determines the net operational profitability,
along with operational performance. It is understood that certain sectors, such
as power, ports, construction and other infrastructure areas which are not
attractive to retail investors and certain categories of equity investors,
require long term debt. Higher debt allocation to such sectors from the banking
system is an economic imperative. That said, the economy cannot sustain a situation
wherein debt equity ratios of 7 to 1 and above are freely allowed. It is time
that independent institutions like National Institute of Bank Management conduct
research and come up with prudential debt-equity norms for all industrial and
business sectors, and provide guidance to banks as well as clients. These norms
may be revised each year based on performance of portfolio companies.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Strategic
perspectives<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It is not
sufficient for banks and companies to be guided just by prudential norms. There
could be an opportunity cost to the firm (and the economy) of not putting up a
project because of funding gap. It could be a global generic market entry for a
pharmaceutical firm or an import substitution project for high speed rail
coaches. It is important that the strategic perspective is understood and
funding support provided. Such incremental funding over and above prudential
norms should be provided through term loans and working capital loans bearing a
special nomenclature of strategic term loans and strategic working capital, and
structured with appropriate moratorium and back-ending of interest rates. These
should have a narrower tenor of 3 to 5 years, and reviewed half yearly. These
instruments would be, in a way, anticipatory strategic debt instruments. <o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Locational variations<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Locational
perspectives are especially important in certain categories of projects. There
should be a ranking of ease of doing business for different industries in
different states, and credit risk accordingly assessed. While this may ruffle
some feathers, in the long run there would be a virtuous impact on the business
climate. The need for such rating is clear given the differential levels of
incentives as well as hurdles faced by different companies in different regions,
especially in the fields of metals and mining as well as road and port
development. Many times locational hurdles are related to certain genuine
concerns related to environmental impact of projects; bank financing may,
therefore, be made conditional on independent environmental analysis prior to
full scale credit release. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Startup
perspectives<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Banks are now
being encouraged to fund startups. While a special financial institution,
MUDRA, has been established, the case of startup financing is not one of a
uniform financial prescription. Some startups which are technology oriented
require funds for experimentation, laboratory analysis or licensing while some
which are application oriented require funds for beta testing of products etc.,
In some cases, it could be better to fund the incubators and research parks,
and let them undertake the task of allocating financial support to their
constituent ventures. Extending the philosophy further, bank finance may be
made available to special vehicles such as alternative investment funds etc.,
which can have a cascading and ripple effect on more startups.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> </span><span style="font-size: 12pt; line-height: 115%;"> </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Turnaround
options<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">If in spite of
the best possible diligence and management, ventures turn bad, they should be
addressed through the endgame mechanisms. The endpoint, of course is the
insolvency and bankruptcy which hopefully will be addressed efficiently and
effectively by the new Law. Prior to that, the options of CDR and SDR must
still exist and be effectively deployed. However, unlike leaving all the reins
in the very same promoters and managements, CDR and SDR must be mandatorily accompanied
by high quality turnaround plans developed by truly independent agencies,
infusion of fresh professional talent and restructuring of boards. All of these
measures, including technology and business development as per turnaround
plans, would cost significant additional money but are worthy of inclusion in
the CDRs and SDRs. Banks must appreciate that not all turnarounds can be
achieved just by cost compression! <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">As this blog post brings out, maintaining solvency is far more
important to the economy than solving insolvency. At the core of India Inc’s
deemed insolvency riddle are two fundamental reasons: a propensity to bank
oneself (through overwhelming debt) to bankruptcy, and secondly, a reluctance
to take objective and competent professional help (before it is too late) to
turn things around. Hopefully, there will be a better appreciation of these two
factors, by the banks as well as companies, going forward.<o:p></o:p></span></i></div>
<div class="MsoNormal" style="line-height: 115%;">
<i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 12, 2016 <o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-79819317260972987292016-05-11T00:55:00.001-07:002016-05-11T00:55:08.716-07:00A Theory of Successful Startups: Ten Principles of Sustainable Success<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">The flavour of the past few decades has been entrepreneurial
ventures as the core of new business generation, and the most visible form of
not only self-employment but also generating employment for scores of people.
However, over the last few years, the word startup has been in increasing
circulation in business and social media. The last decade and this decade
clearly belong to startup as the more profound form of entrepreneurship. Strictly
from a dictionary point of view, a startup company or a startup is an
entrepreneurial venture or a new business in the form of a company, partnership
or temporary organization designed to search for a scalable and repeatable
business model. This definition hardly provides a distinctive or
differentiating colour to startups. A more practical and true-to-the-ground
definition of startup provides a different and relevant perspective.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">From a real life point of view, a startup is a company
working to solve a problem where the solution is not obvious and success is not
guaranteed. This is the fundamental characteristic of a startup, as
differentiated from any other venture that may be established by normal
entrepreneurs or existing companies. An example or two would make the concept
clear. The concept of exclusive retirement homes for senior citizens, usually
located in outer suburbs as gated communities, is gaining ground. An
entrepreneur may set up such a project in a new city or in the same city in a
different format. A startup, however, would try to find a way in which such
senior citizen services could be offered in the current mixed neighbourhoods,
without moving senior citizens out of their current homes. The former, while it
has its entrepreneurial risk, largely works on a proven business model. The
latter, a true startup, seeks to create a new business model out of the idea of
serving senior citizens creatively.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">More fuzzy, more valued<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Startups usually have a fuzzy or unclear texture. One can
certainly make out the shape of a fuzzy object but would find the edges hard to
describe. A startup is also like that; it is indeed easy to synchronize with
the startup idea but difficult to understand the details. It is this fuzziness
that makes startups attractive for investors looking for the next breakthrough
business opportunity to cash in on. In fact, the more fuzzy a start-up is the
more attractive the valuation could be, provided that the fundamental basis of
the idea has been validated in a pilot. Another example could make things
clearer. Providing microfinance to the underprivileged is by now a proven
concept. However, providing microfinance exclusively for drinking water and
sanitation purposes could be an idea that connects current governmental missions
with focussed needs of rural population. The concept could be understandable
but the business model by which the concept could be workable and viable is
fuzzy. </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">The skill and passion as well as the diligence and
determination of a startup founder make such fuzzy ideas work. To be realistic,
while they may work in most cases, they could also fail in certain cases. Once
the fuzzy idea is workable the market opportunity could be enormous. Unlike an
entrepreneurial venture which relies on a superior competitive strategy or
execution, the startup, once successful as an idea writes its own rules and
develops its own industry structure. The incentives to investors and employees,
in a successful start-up, are therefore more exciting compared to a normal
entrepreneurial venture. The incentives are compounded because a start-up tends
to pass on its ownership from time to time based on scale up investment
requirements and investor appetite opening up opportunities for founders and
employees (who have been issued stock options) to cash out periodically.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Ten Sustainable
Principles<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">While the theory of start-ups is, no doubt, exciting there
tends to be many a slip between the cup and the lip. The margin for error in a
startup is low while the temptation to err is high. This blog post summarizes
ten principles which could help start-ups be successful, and in a sustainable
manner.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Ideas from environment<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Startups do not necessarily require product discoveries or
process innovations. Startups, however,
surely require an inventive mind to understand the latent needs of
socio-economic environment and provide creative products and services. This has
been accomplished through either digital aggregation or disintermediation until
recently but could entail artificial intelligence and internet of things in
future. Startups succeed when they understand creative use of new technologies.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Strength through partnership <o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Startups are usually based on certain singular ideas and
unique core competencies of founders; competencies are, no doubt, critical in
converting ideas into reality. However, converting an inventive idea into a
successful business requires more than technical competence, organization
building or external interface, for example. Co-founders who work together,
share and synergize responsibilities have tasted higher levels of success. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Differentiated employees<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Just as founders of startups are different, employees of
startups are also different. They are not solely motivated by monthly salaries
or career progressions as understood in large organizations. They are also
willing to commit their efforts and time in advance to see the success of the
startup ideas. Heart of heart, some of them could be nurturing the idea of
becoming founders of future startups too. Selection of the first employees for
a startup with this zeal rather than with the comfort of prior association is
important to create the right startup culture in the organization.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Funding needs to be humbling <o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">The high point of startup ecosystem is the excitement of
exponentially escalating serial funding. Responsible startups view such funding
as a humbling reminder and positive reinforcement of their commitment to the
ideas, investors and consumers. There are, however, some not so responsible
startups which, carried away by such funding, expand operations adventurously;
some even splurge irresponsibly. Such startups fold up sooner than later.
Recent experience suggests that ‘down-rounds’ (current valuations being lower
than earlier valuations) would increase if spending out of funding is not
prudent. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Capitalism through socialism<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Startup is, in essence, capitalism in intellectual form. The
objective of making money is certainly a visible trigger for all startups.
However, they also need to have a socialistic fabric in that founders and
employees should be willing to put their ideas, efforts and time in advance
with low remuneration and are willing to wait for future wealth. The system
encourages sharing of wealth (or, the pain of lack of it) until at least a
particular stage is reached. Some startup founders also live a relatively spartan
life as their co-founders or their employees lead. Although the startup system
is capitalistic, the pathway is a trifle socialistic; to that extent it is
appropriate for emerging economies such as India. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">More sunrises than sunsets<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Startup ecosystem is inherently optimistic. It tends to take
failures in its stride and move on. Established businesses are influenced by
analytical data of successes and failures while startups believe in the success
potential of their ideas rather than the failures encountered by their peers.
What is unique is that entry into the startup ecosystem is not governed by
conventional strategic analysis of entry and exit barriers. It would,
therefore, be somewhat antithetical for a startup to work on a business plan of
classical mode; rather it needs a business plan that is idea-execution centric,
with no frills.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Sustainability, rather than shareholding<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Startups founder mindsets tend to be somewhat paradoxical;
they are at one level extremely passionate about their creative ideas but at
the same time they are willing to let go of their firms if sustainability is
better assured in new better endowed and more powerful hands. While cashing out
is, no doubt, a driver, startups have a more practical, and if one may say so
wiser, approach to sustainability than typical large scale entrepreneurs. The
ability of a startup founder to manage the paradox is a vital ingredient.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Self-promotion is vital
<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Self-promotion is seen often as a narcissistic trend in
structured organizations, and even in broader social interface. For a start-up,
however, self-promotion is critical as usually there is none other than the
startup who believes in the story of the startup. An ability to conceptualize
and articulate the startup value proposition and the competencies of the
founders is an essential requirement for startup success. If a startup founder
is introvert and unlikely to enjoy such self- promotion, partnership with a
co-founder who is an extrovert and a persuasive communicator could be a way of
overcoming the limitation.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">A sense of urgency<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Startups, unlike more structured entrepreneurial ventures, do
not have all the time in the world to bring their ideas to fruition. Cash
burnout is one issue in the initial stages; and even after the first success
the need to generate surplus cash is another. In a market waiting for ideas, if
an idea takes time to become feasible and commercial, there could be superior
ideas floating in with superior execution. A sense of urgency is vital;
however, it is not to be confused with a sense of recklessness or doing things
without thinking through. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Serialization<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">A startup is never a startup for ever; it fades or blooms.
Successful startups who stay on have a responsibility to steer themselves
seamlessly into a structured corporation. Those who cash out have an even more
primal responsibility to keep utilizing their core competences to establish new
startups serially. In both the cases, managements have a responsibility to
encourage startups in domains or activities that can be outsourced. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Disruption but not
self-disruption<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">One of the important factors for start-up success is their
ability to disrupt existing products and services as well as industry
structures. In this quest, start-ups also go in for maverick leaders and
leadership styles. The urge to be different and disruptive should not be
allowed to result in self-disruption. There are unfortunately many examples of
brilliant ideas and emerging models getting derailed by disruption. A positive
mix of the above ten principles could be a robust insurance against such
trends.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Startups also must be cognizant of the fact that disruption
could be a competitive tool in the hands of other competitors, startup or
established. Although not comparable, the manner in which tablets have
disrupted the laptop market but are now finding potential disruption from
convertibles illustrates that disruption is a good entry strategy for a
start-up but it also needs to guard against complacency, an in fact develop competitive
shields to protect itself through the proof-of-concept and growth phases.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Posted by Dr CB Rao on May 11, 2016<o:p></o:p></span></i></b></div>
<br />
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<br /></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-78580964031325014842016-05-09T12:09:00.000-07:002016-05-09T12:09:56.308-07:00The Theory of Decisiveness: Ten Principles of Decisive Leadership<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Leadership has
many traits to enable and support. The author of this blog post covered many
such traits in an earlier blog post. Reference may be made to the post, “</span><i style="font-size: 12pt; line-height: 115%;">Leadership Qualities and Skills:
Opportunities, Challenges and Enigmas”</i><span style="font-size: 12pt; line-height: 115%;">, Strategy Musings, November 6, 2010
(http://cbrao2008.blogspot.in/2010_11_01_archive.html). Amongst such several
traits, decision making, or decisiveness, is a key trait; so much so, decisive
leadership is referred to as a distinct category of leadership. Decisiveness is
the ability to take decisions quickly, resolutely and firmly. Decisiveness does
not mean taking random or snap decisions. Decisiveness means, in a leadership
practice, taking considered decisions. Leadership is all about converting a
vision into reality through an organization, which requires decisions to be
made by leaders all the time.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">While there are
several leadership styles, leaders are required to be decisive in all the
styles. Only the style of decision making varies across leadership styles. One
stream of thought says that apart from being focused and agile in decision
making based on available information, one can be flexible (adaptive to
situations), hierarchic (taking hierarchy based decisions) or integrative
(taking into account multiple points of view). The first approach makes use of
little or minimal information while the last approach tends to get weighed down
by enormous amount of data and information. The other two fall in between based
on the dynamics of context and the extent of hierarchy, respectively. While
there could be other ways of linking decision making styles to overall
leadership styles, decisiveness can be seen as being prompted by ten different
dominant competencies.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by nature<o:p></o:p></span></i></b><br />
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Certain
personality traits such as emotional dominance, self-belief, self-worth, social
boldness and task orientation imbue certain leaders with a natural tendency to
be decisive. Such people use internalized data and their personal predilections
to make immediate and compulsive decisions when they encounter new situations
or problems. They may not be intolerant but they will be certainly impatient. Such
leaders are unlikely to retract decisions or retrace their actions. Their nature
makes them pile up decisions on their teams in general. The unique nature of naturally
decisive leaders is that they can be decisive even in the face of little
information; a situation not too infrequent in real life situations. It could turn out to be a big advantage in
such situations. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by authority<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Some leaders
wield, and live by, abject power. Authoritarian leaders are almost like
military generals; whether they have strategized their actions objectively or
not, they make it appear that all their mandates stem out of their authority. They
are very conscious of their formal and informal boundaries of power. Authoritative
leaders struggle with millennial employees and knowledge workers but could excel
in domains marked by wide and deep spans of control, like infrastructure
projects by virtue of their resonant leadership. They are unlikely to be very
collaborative but could excel when organizations are structured to clearly
reflect boundaries of power and authority.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by intellect<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Some leaders
are very intellectually driven; they possess knowledge and respect
knowledge-seeking. They look to validate the data they receive, the
interpretations they make and the decisions they take through the knowledge
they possess; and if they find the knowledge at their disposal to be inadequate
they do not hesitate to collect additional knowledge to validate or modify their
decisions. Their nature makes their decision making slow but they tend to make
exceptionally sensible decisions in areas driven by intellectual matters such
as product and manufacturing innovation, patenting and futurism. They could do
exceptionally well in technology-intensive industries. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by experience<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Most leaders
have loads of experience. Only some, however, make their decisions purely out
of experience. Leaders who decide based on their experience are visualizers and
extrapolators of what it takes to achieve a goal. Such leaders are well suited
to taking follower firms on paths taken by pioneers successfully. Leaders of
this ilk are pretty quick in decision making but could also be failing to
respond to new situations due to their preoccupation with their previous
experiences. They could be needlessly biased by their experiences, both
positive and negative. Most leaders are likely to belong to this class,
thinking and behaving through their prior experiences.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by
intuition<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Intuition is
one of the important hallmarks of successful leadership. Leaders are able to
stand by their visions mainly due to their intuition. Leaders acting by their
intuition may be intellectual, experienced and task oriented but they may not
using any of these faculties unless they feel intuitively supported. Such leaders
surprise their teams as well as competitors with their intuitive decisions,
which not surprisingly pan out fruitfully. The author has posted a perceptive
post on intuitive leadership earlier: ”Educated and Experienced versus
Instinctive and Intuitive: From Conflict to Synthesis of Four Leadership
Essentials”, Strategy Musings, May 10, 2015 (</span><span style="font-size: 12.0pt; line-height: 115%;">http://cbrao2008.blogspot.in/2015/05/educated-and-experienced-versus.html)</span><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by goals<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Goals are the
critical drivers of company performance. Leaders who swear by goals tend to be
obsessively focussed and occasionally missing wood for the trees, especially
when business contexts keep changing. Such leaders are appropriate to drive
turnaround as well as growth in stable economic environment. Such leaders are
unlikely to be respectful of lead times required by diligent processes.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by incentives<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A whole lot of
leaders belong to this category. With emergence of variable pay, performance
bonus, profit commissions, stock options, and long term incentive plans as new
ways of incentivizing leadership performance, leaders tend to take decisions
and pursue actions which are incentive friendly. Leaders belonging to this
class tend to take speedy decisions and be oriented towards short and medium
term. Such leaders tend to excel in turnarounds and priming growth stories. Per
contra, it is unclear if such leaders help companies build long term value in
their businesses.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by process<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Leaders who
still have strong legacy of structured management stand profoundly committed to
processes. They believe in structured planning, guided execution and programmed
management. For them, process integrity is paramount; they believe that right
results follow right processes. Process oriented leaders particularly excel in
quality and compliance oriented industries such as pharmaceuticals, food
processing and semiconductors. Process oriented leaders also excel in ensuring
high standards of corporate governance in their firms.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by
recognition<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Some leaders
are inspired by the opportunity to carve a place for themselves in halls of
fame. While they are driven by some of the various faculties and traits
described above, and are motivated by goals and incentives etc., they are
literally actualized by the potential of standing out in the crowd of
leadership. Dhirubhai Ambani, who established the Reliance Group, belongs to
that rare breed of entrepreneurs who liked to leave a legacy of bringing equity
culture to the common man, dwarfing all other Himalayan achievements of his.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Decisive by
people<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">And finally,
there are leaders who are decisive standing by the people. Mahatma Gandhi is
the unparalleled example of leadership dedicated to people, and seeking final fulfilment
in serving people. Socio-economic equity, social harmony and equitable
distribution of wealth are their primary drivers. Nelson Mandela. Martin Luther
King, Mother Theresa, Ramakrishna Paramahamsa and Swami Vivekananda are other
notable leaders of this worthy, and hard to follow, leadership. </span><span style="font-size: 12.0pt; line-height: 115%;">Eminent entrepreneurs like Jamsetji
Tata established industries to generate employment.</span><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Leadership mix<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Just as no two
businesses are identical, no two leaders or two leadership styles are also
identical. Logically, multiple businesses require multiple leadership styles;
the same business may require different styles in various phases of evolution. All
of the ten decisiveness templates discussed are appropriate in one context of
the other. Admittedly, being decisive is only one, albeit very important, link
of the leadership value chain. Anticipating, evaluating, interpreting,
deciding, detailing, resourcing, aligning and executing are the other links of
the leadership value chain. It is worth noting that all the other links too
entail decision making in one measure or the other. A major responsibility of a
leader is not only being decisive but also ensuring that the rest of the
organization is decisive. Individual leaders always find it a challenge to
tackle institutionalized indecision. Optimal leadership mix lies in ensuring that autocracy and
authoritarianism are not deployed to break indecision or discussions and
debates do not stymie decision making. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Leaders should
not only set the tone but also utilize a whole set of traditional corporate
structures and systems to reflect a culture of decisiveness throughout the
organization. Structures such as executive committee meetings and processes
such as strategy and budget reviews can be utilized by leaders to demonstrate
how it pays to be decisive. Decision oriented dialogue, rather than either
hypothesis or theory oriented discussion, is a great way to embed a culture of
decisiveness in an organization. Boards and Founders who select leaders,
internally or externally, must be savvy to select leaders whose decision making
style matches the business context, in each case. A seasoned leader must also recognize
that he has as many as ten great endowments in him or her to be decisive. By selectively
and contextually deploying them he would make great contributions to a firm. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 09, 2016<o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-35763989157652772282016-05-08T06:52:00.000-07:002016-05-08T06:52:07.382-07:00The Theory of Procrastination: Ten Principles to Overcome Procrastination<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-size: 12pt; line-height: 115%;">Procrastination
is the act of putting off or delaying action on something which requires
immediate attention and action. Procrastination is often confused with
postponement. Both have in their meanings the words ‘putting off’ or
‘delaying’. Postponement is the act of putting off or delaying an originally
planned one to a later date. Postponement is relative to a plan, and indicates
de-prioritisation, merited or not. Procrastination, on the other hand, is
relative to the need for immediate attention. Postponement is often linked to a
reluctance to bestow effort, either due to laziness or otherwise. Postponement
on certain occasions tends to be benign, and on certain occasions, life threatening.
Postponement has many times a financial motive; individuals would like to
postpone expenses and advance incomes. Procrastination and postponement are
interrelated.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Procrastination
is postponing something needlessly and mostly indefinitely, without regard to
time, effort, resources or results. Postponement, on the other hand, tends to
be tactical opportunism to conserve effort and resources. Both make one lose
time, in essence, and delay or totally avoid outcomes or lose results. Procrastination
is said to be the thief of time by Benjamin Franklin. Mahatma Gandhi said, “The
future depends on what you do today”. Procrastination, it is said, is often due
to fear of failure. Here again, what Mahatma Gandhi said is relevant: “To do
what we fear is the first step to success”. Dick Cheney, former Vice President of USA
is reported to have said, “I think I was able to survive five heart attacks
because I never postponed going to hospital when something didn’t feel right”. On
certain occasions, postponement provides unanticipated results, like landing on
a better job relative to the one in hand. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Procrastination is universal<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It is imagined
that procrastination strikes only certain people who are wired to be
procrastinating. The truth is that even apparently productive people tend to
procrastinate. People who seem to multi-task effortlessly or seem to be putting
every idle minute to productive use (for example, working on laptop while
waiting in the airport lounge) could also be procrastinating on a few vital
things. In fact, such visible fury of productive working could be a subtle
cover for the ongoing procrastination. Procrastination would well have been
left to an individual’s choice but for the adverse impact it has on one’s own
and others’ lives. While occasional procrastination may be inevitable, regular
procrastination as a personality trait could have underlying behavioural
implications.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">There are three
principal causes why people succumb to procrastination. At one end of the
spectrum, an individual could be so opinionated that he or she is unable to
judge the importance of the action he or she must take as well as the rewards
of taking the action and the pitfalls of not taking the action. Some of the
critical lifestyle issues, like doing proper exercise or taking proper diet, fall
into this category. At the other end of the spectrum, an individual could be so
obsessed with perfectionism that he or she would never embark on anything for
fear of outcomes being not to expectations or receiving criticisms. Most people
fall between the two ends of the spectrum, weighed down by a whole range of
issues relating to time management, emotional burdening and mood swings.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Loop of procrastination<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Procrastination
is a continuous loop which takes hold of an individual the moment he or she
enters the loop once. The usual entry point into the loop is delay in acting on
something due to a lack of awareness of its importance, and the essence of
timeliness. As one avoids taking action on the matter, the negative
consequences of inaction start becoming apparent, both by comparison and by
self-evaluation. A student putting off studies or a software engineer putting
off the testing of his code fall into the same category. As the hopelessness
caused by the delay becomes evident, the individual slips into a negative mood which
could lead to one of the three outcomes; he could entirely give up with total
nonchalance or helplessness, he could try to complete it by leaving everything
else with total burnout or do what he can with a low level of self-worth. In
any of the routes, the emotional consequences are negative.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Procrastination
typically leads to more procrastination. A student who burns midnight oil to cram
everything prior to the examination deadline would be leaving out all other
extracurricular activities, and even may be skipping the day classes. The
software engineer who defers testing to the penultimate day may fumble to
remediate even small errors. As the
negative emotions start taking charge, one would start distancing oneself from
peers and others, and avoiding carrying out even daily chores, be it reading a
newspaper or checking an email. The feeling of guilt associated with not being
oneself only worsens the mood. Depending on the emotional personality of the
individual, the feeling of guilt could be manageable or unmanageable. When
procrastination starts weighing down on one’s life, one must start taking
external help for structured approaches to break the loop of procrastination. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Ten helpful principles <o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">This blog post
proposes ten principles which are fairly simple in logic but complex in terms
of behaviour for an individual to control, overcome and eliminate
procrastination. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Openness<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The first step
in beating procrastination is being open; open about the required actions and
the likely consequences. Openness also includes taking a broader view of life
than a myopic view of just one event. For example, starting an exercise regimen
should not be seen allocation of 30 minutes a day but rather as a component of
total lifestyle. We tend to receive inputs all the while. One should be open to
receiving them, analysing them and absorbing them, including those that seem to
be critical.</span><span style="font-size: 12pt; line-height: 115%;"> </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Reflection<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The second step
in overcoming procrastination is being reflective; understanding one’s own
reluctance to apply oneself to the task even though the requirements and
consequences are known. One must figure
out whether it is a question of time and effort or of mood and ambience.
Figuring out the reasons for procrastination is the most important step towards
conquering procrastination.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Clearance <o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The third step
relates to carefully identifying the obstacles in the path that are related to
one’s own body, mind and personal ecosystem. Releasing greater time out of the
limited time available could be the most effective way to overcome the barriers.
Uncluttering of one’s assets, be it home, desk or inbox could be one way; in
some cases, becoming an early morning person could be the solution, and in some
cases being a night owl could be the answer. In all cases, being ahead of the
curve in terms of time and effort is the key.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Dive-in<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In most cases,
the unknown does give trepidation, even to the otherwise accomplished
individuals. Learning to ride a bike or drive a car is a simple example. Until
one faces the challenge of balancing on two wheels or driving through a crowded
street, the first move is necessary to address the concerns squarely. The
moment the first step is successful, trepidation leads to exhilaration, and
exhilaration leads to further execution. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Perseverance <o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Not in all
cases, dive-ins help; in a few cases there could be failures leading to
deepening of negative emotions and moods. Perseverance backed by an evaluation
of what went wrong and execution of a remediation plan is the answer. However,
it is easier said than implemented. This is one area where help from the
immediate environment would be very helpful. Openness to seek help would be
important, though.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Right-sizing<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Failure is
often related to aspirations being far more than what resources can support.
Having more on the plate than what can one chew is one of the primary triggers
for procrastination. One would be better off doing a few things right rather
than staring blankly at a long laundry list of things to do. Unmanageable
projects intimidate any person. Researchers eventually discover that a simple
pilot experiment or a synopsis of the research project provides greater
confidence than trying to execute a mega experiment or script a thesis right
away. </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Celebration<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">While activity
is never an achievement, celebrating key activities reinforces one’s ability to
overcome procrastination. As one sets about constructing a huge website, developing
a homepage itself deserves a celebration. Celebrations linked to successes
trigger the androgen, serotonin and norepinephrine receptors in one’s brain to
elevate one’s mood. Positive mood is the most important aid to overcome
procrastination. Celebrating results is, of course, the ultimate success in
overcoming procrastination.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Optimization<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Perfection has
a place but not everywhere, every time. Perfection is also contextual. In the
early phases of conquering procrastination, perfectionists would need to
reappraise their penchant for perfection. There is an insightful quotation in
journalism: “You can edit a bad page, but you can’t edit a blank page”. An
optimized result that can be celebrated is worth more than a perfect aspiration
which may never see the light day.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Self-motivation<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Self-motivation
is the last of the final two steps in decisively overcoming procrastination. Ability
to forgive oneself for one’s failures and motivate oneself for next success is
important in the fight against procrastination. As Mahatma Gandhi said thoughts
become words, words become behaviours, behaviours become habits, habits become
values and values become destiny. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Ecosystem<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The ultimate
support and insurance for eliminating, and even avoiding procrastination, is an
ecosystem that supports all the above principles. Having right friends and
right colleagues who operate in an environment of decisiveness, timeliness and
goal orientation is an extremely important determinant. At times, one would
need to move to a better environment as a systemic antidote to procrastination.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB Rao on May 08, 2016 <o:p></o:p></span></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-54233102372417354852016-05-07T08:47:00.000-07:002016-05-07T08:47:14.118-07:00Lessons from Indian Utility Vehicle Segment: Five Principles of Market and Market Share Growth<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">India, from
just 30000 passenger cars and utility vehicles about 30 years ago, currently absorbs
over 2.8 million passenger cars, utility vehicles and vans; a number set to increase
steadily, say, around 10 percent. In 2015-16, the total sales of passenger
cars, utility vehicles and vans increased by 7.24 percent to 2,789,678. Sales
of passenger cars increased by 7.87 percent to 2,025,479 units while the sales
of utility vehicles rose by 6.25 percent to 586,664 units and of vans by 3.58
percent to 177,535. The share of utility vehicles in total passenger cars,
utility vehicles and vans has reached a record 21 percent.</span><span style="font-size: 12pt; line-height: 115%;"> </span><span style="font-size: 12pt; line-height: 115%;">The utility vehicle segment has become
diversified with multi utility vehicles (MUVs), sports utility vehicles (SUVs)
and crossover vehicles (COVs). With certain excise duty concessions for utility
vehicles less than 4 meter length, a new breed of compact SUVs has also
emerged. Typically MUVs are 7 to 8 seaters while compact SUVs are 5 seaters. UVs
are offered in both petrol and diesel versions; with diesel being the preferred
mode in this segment. However, the Delhi developments on emissions and
particulates, diesel has lost some sheen as the preferred option in this
segment.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">In the utility
vehicle segment, Toyota with its Innova MUV remains a segment choice (against
other MUVs such as Mahindra Scorpio and Bolero, Ford Endeavour, Tata Safari and
Chevrolet Captiva) although a number of
other car manufacturers such as Renault, Nissan, Hyundai, Honda and Maruti have
succeeded in building new franchises around their sleeker and more compact
SUVs. Renault Duster and Nissan Terrano helped popularize this segment a few
years ago but Hyundai Cresta and Maruti S Cross and Vitara Brezza have represented
the recent challengers. The battle of utility vehicles is far from over. In the
space of a few days this month, Toyota has introduced Innova Crysta as a new
generation of MUV, phasing out the decade plus old Innova while Honda has just
introduced its new compact SUV titled BRV. With these two introductions, and
more in the offing from other manufacturers, the utility vehicle segment will
keep growing strong. Notwithstanding the Delhi troubles for diesel vehicles,
the utility vehicle segment will continue to grow. The Indian utility vehicle
segment offers five interesting and relevant principles to drive market growth
and market share growth, as discussed below.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">New products make new markets <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The first ever
(and the only) utility vehicle ever known to the Indian market was Mahindra
Jeep which was sold in a few numbers from the 1940s. Bajaj Tempo (now, Force
Motors) introduced a desi version of Jeep, Tempo Trax, in 1998 which was not a
great success. The first ignition in the utility vehicles market came when Tata
Motors introduced the elegantly designed (by the 1990s standards) Tata Safari
in 1998. Thereafter, Mahindra introduced its own designs such as Balero (2000)
and Scorpio (2002). The real impetus to the Indian vehicle market came when
Toyota introduced Innova, in 2004, as its successor to its first entry in 1998,
a boxy Qualis. The next revolution took place when Renault introduced its
sporty Duster in 2012 which caught people’s fancy as an urban SUV, an image
fortified by Nissan Terrano further. Thereafter, other manufacturers jumped
into the fray with sleek looking urban SUVs, including a steadfastly small car
and sedan oriented Maruti doing so (with Ertiga in 2012. S Cross in 2015 and
Vitara Brezza in 2016). Today, the utility vehicle, whether MUV or SUV, has
become the preferred family car or second car option.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The Indian
utility vehicle market which has grown from 2 percent of the passenger vehicle
market to 21 percent of the market is another endorsement of the business truth
that it is only new products that make new markets. The initial trepidation
that existing players have when a competitor launches a new product is actually
misplaced; as they themselves follow up the launches with their own similar or
new products, new market segments will be created and expanded. This is true of
utility vehicles as proven above, and would be true for any other segment or
business too. In fact, the more aggressive such new product entry is the better
it would be for market growth. Patanjali’s aggressive Ayurvedic product foray
in India, long considered the home of Ayurveda but traditionally dependent on
Western personal hygiene products, is bound to create a totally new market of
AFMCG (Ayrvedic Fast Moving Consumer Goods Industry). The Indian automobile
industry should logically look forward to utility vehicles more than doubling
in sales every five years, until they reach an equilibrium with sedan sales.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">New themes make new products<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Newly
introduced products will be perceived as new products only when they have
novelty. Thematic novelty is one of the brig drivers of new product acceptance.
In a utility vehicle scenario monopolized by World War vintage Jeep designs,
Tata Safari offered a fresh thematic breeze. In a utility vehicle design space
that was characterized by boxy exteriors and cramped interiors with low regard
to finish, Innova brought car-like comfort and quality to the space. In a
segment which catered to large families, Duster brought urbanism with easy navigation
of crowded urban drive as a new theme. Ford Ecosport (2013), Hyundai Creta
(2015), Maruti S Cross (2015) and Vitara Brezza (2016) and Mahindra TUV (2015),
KUV (2016) and Nuvo Sport (2016) brought youthfulness and sharpness to utility
space integrating more carlike features. At each turn of design philosophy,
thematic novelty helps establish new designs as new products.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">There is never
an end of the road for novelty. Just as the customers would think that the
choice is between a 5 seater urban SUV and a 7 seater family MUV (if
spaciousness is desired in both options), Honda through its latest launch of
BRV brought in the concept of a relatively spacious 7 seater urban SUV to
commercialization. Through Innova Crysta, Toyota has tried to provide higher
power and torque as well as advanced features and finishes with additional
safety to family users. The challenge is to combine improvements in such a
manner that they stand out together for thematic novelty. The next level of
challenge is to bring in such novelty that would make an SUV, the first car
rather than the second car. For example, cars that have inbuilt arrangements
for child safety, including child car seats could be the next evolution to
cater to urban couples with small families. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Global style with local substance <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Indian
automobile industry is unique because of the strong presence of both Indian and
foreign players. Companies such as Tata Motors and Mahindra & Mahindra have
gone global with JLR and Ssangyong acquisitions (2008 and 2011, respectively).
They have also continued their indigenous development efforts. Companies such
as Maruti, Hyundai, Ford, Honda and Toyota have been essentially global
companies with Indian presence; however, having seen the potential of Indian
market, they have started designing products for India with Indian engineers.
Despite having formidable global automotive engineering capability through JLR,
Tata Motors just went through a completely ‘lost decade’ by not accessing
modern global design thinking from its JLR engineering centres and persisting
with dated approaches from its Indian development centres. Despite having
strong global executive controls, Maruti, Hyundai and Honda have been able to
engineer India specific but globally stylish designs that have found quick
resonance with Indian customers. On the
other hand, some of the world’s largest automotive makers present in India such
as GM and VW failed to make the grade in the Indian market due to reluctance to
customize. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Indian
requirements are stringent as acknowledged by Renault Nissan global chief
Carlos Ghosn. In terms of durability, life expectation is almost perpetual
while in terms of style, expectations are contemporary. The real
differentiators for India are the requirements for high ground clearance and
low turning circle, coupled with spaciousness to meet Indian body
configurations. India also places considerable emphasis on fuel economy and low
lifecycle costs. What adds competitiveness is localization. An Indian made car
could cost a fraction of a similar imported car. Going forward, those
manufacturers who can combine global contemporary styling with Indian cost
competitiveness by working with Indian engineering teams would have a
significant competitive advantage. It is indeed gratifying that Renault Kwid,
Maruti Brezza, Hyundai Cresta and Honda BRV have been products of Indian
engineering, albeit with global guidance. After a decade long hiatus, it
appears that Tata Motors is also finding the right fusion of global and Indian
engineering as demonstrated by Zest and Tiago cars. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Segmentation drives share<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The traditional
theory of market segmentation continues hold relevance in market share play.
The more a company is able to segment its markets perceptively, the more
dominant it can become in the overall market. From a time when utility vehicle
category itself was seen as one segment of the passenger car market, today the
utility vehicle category itself is seen as a total market with a few
sub-segments of its own. As a result, there
has been a complete rejig of the market share pecking order. In the early days
of the utility vehicle product expansion days, Tata led the duopoly with Mahindra.
Later it was Toyota with Innova that led the market share charts. Today, the
top five players are as follows (with market share percentages in the brackets):
Mahindra & Mahindra (38), Maruti Suzuki (16), Toyota (12), Hyundai (11) and
Ford (7). These five manufacturers have captured an overwhelming 94 percent of
the utility vehicle market, elbowing out the once market leader, Tata and
pushing down the subsequent leader, Toyota.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The above
statistics also illustrate how the SUVs of M&M and Ford (assumed at 70
percent of their UV sales), Hyundai and Maruti captured close to 70 percent of
the total UV market. More importantly, market segmentation and product engineering
geared to segmentation has propelled Maruti Suzuki and Hyundai, both
predominantly small car players, as the second and fourth largest players in the
utility vehicles market at 16 percent and 11 percent market shares respectively.
Segmentation and product introductions helped a traditional player like M&M
retain its market dominance. By the same token, it is also evident how Toyota
lost the game to an extent by refusing to play in the SUV segment despite the
existence of a sprightly RAV4 in its product range and several others in the
associated Daihatsu range. Interestingly, in the total UV space, M&M have 5
products, Maruti Suzuki 3, Toyota 2, Hyundai 2 and Ford 2 (overall, there are
over 60 SUV models, past and present!). Clearly, with others such as Honda
noticing the importance of thematic segmentation, there is still huge potential
for market share growth for late stage entrants.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It is never too late<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The Indian
utility vehicle market provides a few important insights for leadership which has
the responsibility for corporate strategy, marketing and product decisions of a
company, usually the CXOs, CEO and boards of companies. Some insights are
evident from the above discussion and are not repeated. A few additional
insights are as follows. The larger and more global a company is, the greater
is the risk of skirting opportunities. Several companies that were covered in this
blog post would have triggered better market expansion and achieved better
market share for themselves had they made proactive and region-specific
decisions in a timely manner. Only two companies, M&M (in utility vehicle
segment) and Hyundai (in sedan segment) have demonstrated such decision making capability.
Secondly, customisation to local needs is not a concept that can be taken back
to global boards and executed in overseas design centres. Rather it is a
concept that needs local decision making, and local execution with local
engineers and with local validation.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">While
timeliness makes a significant difference, it is never too late to make an
entry and score success and sustainability. While Toyota would have been so
high in the pecking order had it entered India along with Maruti such delayed
entry has not prevented the company from creating a niche for itself years
later. Similarly, Maruti would have had a great presence in the utility
vehicles segment had it entered in the segment along with Toyota but the delay
has not stopped it becoming the second largest player in the utility vehicles
segment even after a highly belated entry with the highly acclaimed Ertiga, S
Cross and Brezza. The same has been true of Hyundai Creta, and is likely to be
true with Honda BRV. Delayed market entry can be offset by innovative product engineering.
It is never too late to dominate markets with creative positioning of high
quality products with thematic novelty. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 07, 2015<o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-29265357144639859902016-05-06T06:37:00.000-07:002016-05-06T06:37:17.950-07:00From Specialization to Diversification: Five Essential Principles of Successful Evolution<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">In business, it
is reassuring to be specialized while it is exciting to be diversified. Human
heart is shaped to be committed; a business person’s heart, not surprisingly,
would stay anchored with his or her first business even decades after its
maturity. Human mind is wired to wander; a business person’s mind would, not
surprisingly, seek to explore new business opportunities. The balance (or the bridge)
between specialization and diversification (or between heart and head) is
dictated by each business person’s risk taking ability (or guts). The swing between
specialization and diversification is also dictated by global commodity and
economic conditions. In periods of continued oil price stability, for example,
it would be prudent, equally, to be specialized in either oil exploration or
oil refining. In periods of declining oil prices, it would be depressing to be
solely in exploration business while in periods of booming oil prices, oil
explorers would like to do nothing but drilling.</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Times change,
and so do business and profit considerations. Nothing that is cast in stone can
guarantee success. Even assuming one were to have endless resources,
diversification into all sectors need not fetch better returns than staying in
one specialized sector. Even if one were to be well balanced in both oil
exploration and oil refining what if alternate energy unsettles the fossil fuel
scene? The energy industry and the governments may be required to consider
solar energy or battery energy sooner than later. These decisions are neither
easy to make nor quick to execute. What once seemed an allied domain to the
core business could become a millstone to the core business in later years.
There have been steel mills which saw mining on one side and power generation
on another side as a great infrastructure play. Today, reeling under the burden
of unserviceable debt, such businesses yearn to be specialized. Yet, the move
towards diversification is a natural and necessary enterprise view, provided five
essential principles govern such moves, as discussed below.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Principle of sustainable core <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">One of the popular
concepts is that diversification should be resorted to when the core business stares
at an uncertain or unviable future. The truth is the other way; the core
business of any diversifying business must continue to be successful for such diversification
to be successful. Even technological obsolescence of the core business products
need not necessarily be the trigger for diversification. As long as the basic
usage requirement of the core business products or services continues, even
specialized firms can have continued prosperity by substituting obsoleting
technology with emerging technologies. A relevant case is that of light product
companies. By shifting from incandescent bulb technologies to fluorescent technologies
and later to LED technologies, the light products companies continue to be
specialized yet successful. As long as the society needs artificial lighting,
light product companies would be sustainable.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">That said, a
light products company may consider diversification as a deliberate strategy to
scale up and scope up. Such diversification could be in terms of other electrical
products like switches, cables and other accessories or in other areas of usage
of electricity such as fans, air conditioners and voltage stabilizers. Whenever
such diversification takes place, a sustainable core business is as important
as an attractive new business. The huge problems of market capitalization faced
by conglomerates without any of their core businesses being viable is proof of
this hypothesis. This principle teaches that diversifying companies should
continue to nurture the core businesses, and the teams deployed therein, and
also commit to continuing investments in technology updates in the core
business. Core competence arising from the core businesses can be extended to
new businesses only when core businesses themselves are competitive.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Principle of dedicated organizations<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The fundamental
mistake of diversification usually relates to organization design. It is
tempting to divert the organizational resources of an existing business to
develop new businesses. The assumption is that the existing core businesses are
on ‘auto pilot’. This is hardly the truth in most cases. Every business continuously
faces disruptive technological and market trends and would need full-fledged
dedicated teams to cope with them. Any diversion of resources would starve and
fail the core. Many acquisitions also tend to be suboptimal because of the
delayering of teams in either the acquired or acquiring companies, or in both. A
well designed business, whether it is an established core or emerging new, must
have a right sized as well as right talented organization which must continue
to nurture the corresponding business. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Successful diversifications
in India have been a result of dedicated teams; while organizationally leveraged
diversification initiatives have not been as successful. A study of diversified companies and
conglomerates in US, Europe, and Asia supports the dedicated organization
concept. The companies/conglomerates are GE, United Technologies, Sarah Lee,
Honeywell, Tyco, Philipps, ABB, ThyssenKrupp, Siemens, Hitachi, Samsung,
Toshiba, Mitsubishi, Sumitomo, Tata, Reliance, Birla, Hinduja, and L&T.
Each of these firms may have a common ownership or at best common board
representatives but each of the firms or conglomerates have distinctive
business units, organization structures and talent profiles. Failed diversified
companies in India (failed diversification in brackets) such as Unitech
(telecom), Videocon (telecom), AB Nuvo (Retail), SPIC (pharma) illustrate the
perils of underestimating the need for dedicated organizations for the core as
well as the new.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Principle of progressive gestation<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">A popular
(mis)conception is that efficient capital allocation for a balanced business
portfolio helps support a successful transformation. The capital efficiency
theory distorts capital allocation for diversification projects based on certain
preconceived rules. In most cases, short gestation projects are favoured even
though longer gestation projects may build longer term value. Traditional discounted
cash flow and internal rate of return techniques do take into the life span of
each project but are heavily dependent on assumptions. In contrast, a portfolio
management approach based on the gestation periods of different projects
provides better insight. </span><span style="font-size: 12.0pt; line-height: 115%;">Gestation
period is the time taken from the incorporation of a business to first
commercialization. </span><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Prior to diversification, the
leadership must focus on analysing the gestation periods of different projects
and classify them into different gestation buckets. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">For those
companies which are marked by successful core businesses, a gestation period
not exceeding 3 to 5 years is probably the period that can be supported. Established
core cannot diversify into projects which have gestation periods of 10 years or
more (like power and ports) or completely uncertain domains (like oil and gas
exploration). A more relevant approach would be to first consider a 3 year
gestation guidance for diversification; as the group becomes successful in its
first diversification it could take on projects with progressively higher
gestation periods such as 5, 7, 9 and higher years sequentially. A relentless
focus on gestation management in each of the diversified entities provides
managerial inputs that are appropriate besides making both capital allocation
and capital accountability processes efficient. <o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Principle of cultural diversity<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">It is
understood that each organization tends to have its unique culture (although
desirable cultural factors would be common across organizations). However, not
many appreciate that each business has also its unique way of functioning,
creating a sort of cultural filter through which cultural factors of an organization
must pass through. Information technology, for example, requires a highly
flexible, globally communicative, round the clock global delivery structure. It
also requires significant on-site working when required. Similarly,
construction, oil & gas exploration, logistics, hospitality, healthcare and
several other businesses have their unique ways of conducting and delivering
business through employee practices. It is important that the intrinsic
cultural aspects of each business are understood by group CEOs and founders.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The essential
feature of successful diversification is not managing different businesses but managing
diversity. Diversity is the understanding that each business is unique and each
employee will be unique not only as an individual but also as a business
employee. The management of diversity will be very effective when the Group
looks at core cultural values like ethics, collaboration, transparency, and
leaves the business specific cultural nurturing to the respective business
heads. There is, otherwise, no way an automobile-specialized group can
successfully operate with a diversification into software, and vice versa. There
could be similar cultural hurdles in a design firm in one sector becoming a
manufacturer in another sector. Specialized firms undertaking diversification
would be better off by avoiding cultural straightjacketing. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Principle of corporate governance <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The fifth, and
quite a critical, principle is the principle of corporate governance. The standards
of corporate governance one adheres to in a firm builds long term equity for a
firm in its stakeholders. As a firm moves from being a specialized
mono-business firm to a diversified multi-business conglomerate, the challenges
for corporate governance increase manifold. Some will be structural like
establishing legal entity boards, finding the right number and mix of whole time
and independent directors, setting up operating executive committees, and so
on. These are items that can be handled; the systemic challenges are the ones
that will be challenging with conglomeration. Diversification offers additional
avenues to derail governance; more opportunities for fund raising, related
party transactions, and so on.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">More subtly, just
as group corporate thinking influences diversification decisions it also
influences thinking of individual companies within the conglomerate. A major
Indian conglomerate had several years ago decided to become global with
overseas acquisitions, and made three big ticket acquisitions, in the
beverages, automobiles and steel spaces. The first yielded indifferent results,
the second astoundingly positive results and the third painfully negative
results. If each of the firms were independent, specialized firms their
decision making would have been more circumspect. This is not to hypothesize
that conglomerate groups make inherently adventurous decisions; but certainly
they become more powerful and more risk-prone, from a governance point of view.
Robust corporate governance, at firm level and group level, as well as from
structural and systemic angles, will help well-governed specialized firms evolve
seamlessly as well-governed diversified entities and conglomerates.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 06, 2016 <o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-10540788016399539172016-05-05T10:46:00.000-07:002016-05-05T10:46:54.347-07:00Speaking Up to the Boss: Not a Matter of Diction but a Model of DICTION!<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-size: 12pt; line-height: 115%;">Young professionals as well as accomplished leaders have one
issue in common: “how to speak up to the boss”. Granted, young professionals
are likely to be on cleft wicket in dealing with their bosses, given that they
are at the start of their career but it is strange but true that even leaders
who have made their mark need to be circumspect in how they speak and what they
speak. Even the CEOs and founders of companies are accountable to investors and
society. Of course, in the final analysis, all of us are accountable to our
Supreme Boss, God Almighty! Such divine accountability being separate, in the
normal human situation one tends to be reporting or accountable to one or more
bosses. And, unfortunately, once one joins a firm, it is the boss who plays God
till the very end of career. To aggravate matters, bosses may change but
bossism won’t!</span><span style="font-size: 12pt; line-height: 115%;"> </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
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<span style="font-size: 12.0pt; line-height: 115%;">Leadership style is the modern day euphemism for the earlier
era bossism. While management experts have tried to make it appear as though
bossism is limited to only the authoritarian or task oriented leadership
styles, bossism has now become such a subtle but equally punchy concept that it
permeates all leadership styles. Some may be lucky to get an apparently nice
boss while fewer numbers could be exceptionally lucky to get to choose their
apparently nice bosses. Most, however, have to endure bossy bosses! Bosses may
be exceptional but there cannot be any exception to bossism. Under some
leadership styles, bossism could be gross and crass while under some leadership
styles it could be subtle and suave. As one starts his or her career journey at
the bottom of the career pyramid, or recalibrates the career later on in life,
one needs a robust capability to handle bossism.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Bossism defined<o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Bossism is closely associated with political organizations,
from the times such organizations took shape. Bossism is a pejorative typically
applied to leaders who control the selection of their political party’s candidates
for elected office and dispense patronage without regard for public interest.
It is unclear how this concept seeped into business or service organizations
but the fact of the matter is that bossism is a reality. The origins of
industrial engineering concepts such as supervision, management, centralization
and span of control as well as the power of authorities to dispense rewards and
privileges could have also created a helpful climate in organizations for
bossism to entrench itself. Excessive bossism has led to rebellious pushbacks
from the working class in yesteryears, bringing forth a host of industrial
relations issues. Bossism, over the recent years, has moved from being a
visible blue collar issue to becoming a latent white collar concern too.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">In the modern day corporate context, bossism has several
connotations. Leaders who demand implicit loyalty, expect blind execution and
brook no discussion from their teammates (or, even from their peers) are a
personification of bossism. Bossism is reflected in a failure of leader to
appreciate work-life balance and the determination of a leader in achieving
success at any cost. Subtle shades of bossism include being narcissistic in
style, playing favourites, and promoting a ‘yes’ culture. In oriental cultures
which deify authority, bossism and its implicit acceptance come naturally.
While bossism thrives in servile teams, the ultimate satisfaction for a bossy
leader is getting a candid team on to its knees and making it servile. Bossism
is not necessarily synonymous with aggression. Aggression is not necessarily
harshness or selfishness, and can be displayed by teams in camaraderie as much
as by leaders driving obedient teams to hard tasks. Per contra, soft-speaking
leaders with facilitative charades could be quite bossy in persisting till
their teams wilt without a whimper in the leaders’ apparent kindness! <o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Perils of bossism<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Bossism has many perils; it sniffs out free speech in
organizations and denies the benefit to organizations of the benefits of
multiple viewpoints. To be competitive and successful, organizations need to
master and execute on the best of the several pathways. In a way, bossism is
worse than authoritative or task style of leadership because bossism has no
intellectual point of view, per se. Bossism is particularly hard on the
millennials generation which is brought up in a rather free information society
but is cramped into bossy organizational cultures for want of choice.
Leadership development in organizations takes a big hit with a bossy culture.
Bossism has an infectious facet of seeping into the broader organization, with
subordinates sulking under bossy leaders also turning bossy themselves. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Organizations exist to deliver value to society through
competitive superiority. Competitive advantage comes with superior decision
making. There are three essential steps in decision making in organizations.
First is conceptualization, second is analysis, and third is solution
development. All the three phases are dependent on a free and fertile mind, and
an open and free expression. As bossism curtails these free processes, team
members also, over time, find it convenient to acquiesce, and shift the blame
to their leaders. One wonders if the great leaders of the past and present did
not have the DNA of speaking up for positive things and against negative things
whether national transformations would have occurred. It follows, therefore,
that professionals should have the ability to retain their independence of
thinking and have the ability to speak up.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Speaking up <o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Speaking up in bossy organizations, or for that matter in any
organization, does not happen naturally and easily. Speaking up is not just not
just about language skills to construct sentences or having personal guts to
deliver difficult statements. This blog post proposes that speaking up to the
boss is not a matter of just diction; it requires a model of DICTION! Diction
is defined as the choice and use of words and phrases in speech or writing. It
also reflects the style of enunciation in speaking. Diction, no doubt, enables
communication, and the right diction adds value to the communication. However,
for individuals to express themselves constructively and effectively, a model
of DICTION is required. DICTION refers to Discipline, Intellect, Courage,
Tolerance, Insight and Novelty as the six component synergistic combination of
skills and attributes that is required for not only for constructive expression
but for cultural transformation. DICTION as a model is relevant for leaders as
well as the led, across all levels of an organization.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Discipline<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
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<span style="font-size: 12.0pt; line-height: 115%;">Discipline is the fundamental requirement of constructive
expression. In regimented organizations which curb expressions, the discipline
of speaking with responsibility makes it difficult for bosses to curtail
expression. On the other hand, irresponsible and undisciplined speech will only
provide handle to regimenting bosses to stifle any speech.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Intellect<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Intellect is what distinguishes the knowledgeable from the
flippant. Intellect is the faculty of reasoning and understanding objectively,
and building a body of knowledge. Intellect is the shield that protects the
speaker against unreasonable bossy onslaughts. Logic and reasoning have
historically been the factors that challenge the dictators and stimulate the
subjects. The organizational context is no different. </span></div>
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<span style="font-size: 12.0pt; line-height: 115%;"> <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Courage<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Courage is being fearless. Courage in an organizational
context does not mean daredevilry; rather it means a fearlessness to speak
one’s mind based on one’s courage of convictions. Many times, speech is
replaced by silence for fear of annoying others or facing retribution in terms
of holdbacks in career. On the other hand, only courageous people can translate
their intellect into actionable ideas that would make sceptical bosses take
note.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Tolerance<o:p></o:p></span></i></b></div>
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<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">As one prepares to confront, in a constructive manner, their
intolerant bosses and peers, one may only expect severe and stubborn opposition
which may be open or discrete. It is easy to lose one’s cool in such
situations. Tolerance of such opposition and trying to conquering it through
discipline and intellect helps the speaking up process. <o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Insight<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">In organizations, there is only so much that is open while
tends to be a lot that is unsaid. Those who are in the forefront of the ‘speak
up’ change must possess insights of what works and does not work for the
business. It is this capability for insights, when expressed responsibly and
intellectually, that make people take note. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Novelty<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">All popular products and services make their mark with their
novelty. The novelty of speech makes even the sceptics and diehards take
notice. Novelty is the signature tone of a tradition-defying speech. A quest
for novelty results in a creative culture and vaccinates organizations against
regimentation.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">DICTION as a model<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">DICTION is an integrated model for responsible, intellectual,
insightful and novel speech that is delivered with courage as well as
tolerance. It is relevant for bosses as well as team members. It has to be
practised as an integrated formula. It is not that always only the bosses need
to be convinced; peers and team members also need to get convinced. DICTION, as
a model, helps change the culture of an organization. One of the important
points to deliver in any organization is to replace legacy systems and
processes such as ‘command and control’ centralized administrative models with
genuinely facilitative decentralized collaborative models. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">DICTION as a model is a leadership responsibility. Leaders,
themselves, must practise DICTION as they deal with their boards and investors.
Internally, leaders must move from being monitors and controllers to mentors
and coaches. It would emerge, therefore, that the first and decisive speak-up initiative
must start in the domains of organizational design, organizational behaviour,
and leadership development. The human resources culture verily defines the
overall organizational culture. Freedom to express is not just an individual
need; it vests in the organization the power and energy to grow. DICTION provides the predilection for an
organization to excel over itself, and the competition. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Posted by Dr CB Rao on May 05, 2016<o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-20317048066657785762016-05-04T10:11:00.000-07:002016-05-04T10:11:44.618-07:00Five Sequential Facets of Effective Execution: Integrating Events, Outcomes, Results and Accomplishments, and Actualization<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Execution is the key to competitiveness. Even a suboptimal
strategy can be made to work with superior execution while even a great strategy
can be rendered suboptimal by inferior execution. There is lot of management
literature on planning, strategy and the like but very little on execution. Two
books</span><span style="font-size: 12pt; line-height: 115%;"> </span><span style="font-size: 12pt; line-height: 115%;">merit mention: the first is “</span><i style="font-size: 12pt; line-height: 115%;">Execution: The Discipline of Getting Things
Done</i><span style="font-size: 12pt; line-height: 115%;">” by Larry Bossidy and Ram Charan and the second is “</span><i style="font-size: 12pt; line-height: 115%;">The Four Disciplines of Execution: Achieving
Your Wildly Important Goals</i><span style="font-size: 12pt; line-height: 115%;">” by Sean Covey, Jim Huling and Chris McChinsey.
Probably, execution is seen as simple as as following a set of instructions or
rules embedded in budgets and plans, developed pursuant to goals. The book by
Sean Covey focuses on the behavioural aspects of execution, and brings out
Focus, leverage, engagement and accountability are considered the four critical
disciplines of execution.</span></div>
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<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
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<span style="font-size: 12.0pt; line-height: 115%;">Execution at shop floor level or in construction site is
rather easy to monitor. However, execution of a business is more challenging
due to the involvement of countless agencies and people, both internally and
externally, operating under conditions not fully under ones control. One may
draw up an SOP for shop floor activity or a PERT/CPM chart for a construction
project but would find the idea rather out of place for a business initiative. Programme
management has emerged as a discipline for monitoring execution but it only
provides a partial and ineffective answer. The reason is simple. Just as
quality has to be embedded in production processes and operators, execution has
to also be carried out only by people entrusted with execution. Execution is
not a monitor’s job, although monitoring may be part of execution, and if
carried out by other agencies helpful to execution. This blog post proposes
five facets of effective execution.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Execution chain<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Execution is the practice of converting a plan into an action
to achieve a goal. Execution, therefore, starts with goal setting itself, as
Sean Covey’s book argues. If the logic is so clear, why is it that there tend
to be huge differences in the execution effectiveness of different individuals
or entities? Some attribute ineffective execution to inadequate goal setting
and insufficient planning. People
subscribing to this view believe that as long as goals and actions are
articulated clearly execution would happen automatically. Yet, execution tends
to be weak in high-planning companies too. Some believe that execution has a
significant behavioural content. Sean Covey’s book proposes that the four key
elements of focus, leverage, engagement or accountability can be ensured in
teams with appropriate behavioural conditioning. It advocates systemic
ownership around key goals with execution itself being both an action and
reward.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
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<span style="font-size: 12.0pt; line-height: 115%;">The planning based view is simplistic while the behaviour
based view is elaborate. It is important to understand execution from different
viewpoints, align them and integrate them under one execution value chain. At
the lowest end, execution can be seen as a series of actions or events. An
example of this is organizing a leader summit as an event that aligns the
leadership team. However, organization of the event is just a start. At the
next higher step, organizers tend to look for outcomes. In this case,
successful conclusion with 100 percent participation and no dropouts and with
at least 50 percent of participants providing active inputs could be outcomes.
Even this, however, is not complete execution. At the next higher level, one
would look for results, in terms of new collaborative networks being created or
platforms created for post-summit follow-up. Most execution experts believe
that the execution is completed with good results. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">There are, however, two other important milestones towards
the higher end of the execution value chain, namely accomplishment and actualization.
Results are metricised numbers of performance. Quarter after quarter companies
publish their results, and even if they are in line with goals companies may
not have a sense of accomplishment. A sense of accomplishment in execution
happens when the executing individuals and teams have sense of ownership, right
from goal setting to accomplishment of results. A sense of accomplishment is
not the final end, however. A feeling of actualization is the ultimate endpoint
of execution. Actualization is a challenging concept, and has been dealt with
by the author in his blog Strategy Musings on three occasions: “<i>The Journey of Self-Actualization: A
Leadership Process of Discovery, Development and Delivery</i>”, August 28, 2012
(<a href="http://cbrao2008.blogspot.in/2012/08/the-journey-of-self-actualization.html">http://cbrao2008.blogspot.in/2012/08/the-journey-of-self-actualization.html</a>),
<i>Self-Actualization by One’s Self for
Oneself: An Enlightened Process for the Elusive Goal”</i>, April 21, 2013 (<a href="http://cbrao2008.blogspot.in/2013/04/self-actualization-by-ones-self-for.html">http://cbrao2008.blogspot.in/2013/04/self-actualization-by-ones-self-for.html</a>).<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Leader reflections<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">If one has to travel the full length of execution value
chain, the journey would require leader-follower interactions that focus not
merely on any of the transition points of the execution chain but instead focus
on the actualization end-point. The leader would need to typically evaluate
himself or herself first; what would really fulfill himself or herself. A leader
who is considering a leadership position in a turnaround setting would need to
introspect or reflect which of the following could be the real trigger for his actualization:
revenue, stock price, employee security or hall of fame. While one may say that
all of the factors would be reflected in company valuation, the sense of
fulfillment could come from completely different factors. It could, for example,
be from a sense of learning that he has become a master of turnaround, which he
may not be expressed or measured at all. For the employees involved, it may
come from stepping that extra mile to give novel suggestions and have the
fulfillment of accomplishing them. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">A sense of actualization occurs by focusing on transformative
goals rather than mundane goals, and by focusing on a few prioritized ones
among them, rather than on every one of them. The leader should be able to
identify the goals which are predominantly individual dependent, team oriented
or business leadership specific. Delivering a lecture in the leader summit is
an individual accomplishment while organizing the summit is a team
accomplishment. Using the summit to transform the business is a business
leadership accomplishment. Leaders need platforms and forums to articulate,
prioritize, and focus on actions, and monitor outcomes and results on each of
the groups. Once the forums are in place, taking them seriously, and staying
engaged is an essential mind-set, for both leaders and followers. Continuous
engagement helps in mutual reinforcement of leaders and followers towards
fulfilment of goals. It also sets up mutual accountability which is a logical
culmination of ownership.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Follower reflections<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Admittedly, followers are unlikely to have the same
uniqueness of perspectives or levels of motivation that leaders would have.
Followers are generally a part of larger teams with significant interactive
noise. Each team tends to have its own group dynamics in terms of behaviour
towards performance. Followers tend to be of two categories; those who are
determined to be leaders and those who are content to be followers. It occurs
naturally for the first group to be highly execution oriented and for the
second group to be passively participative. The relative mix of aspirant
leaders and passive followers is not necessarily a driver of relative
performance differentials. It does not, for example, follow that if there is a
high proportion of aspirant leaders in a group, that group would automatically
perform better. On the other hand, such a group could be more fractious and
more energy dissipating. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Followers need to reflect on what could make them really a
fulfilled part of a group. Some may like their performance to be outshining
others in a group while some others may derive happiness from their group being
more effective overall. Be that as may, followers usually struggle to arrive at
a common understanding of the right dynamics for the group. This is partly due
to a lack of understanding as to how group success, rather than individual
success, can spell overall business success and partly due to a perception
linking individual performance to career growth. Those groups which have a
natural performance culture rather than a rewards driven performance culture
tends to have more harmonious group dynamics.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;">Leader responsibilities<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">Visionary execution is what sets out a leader from others.
Execution is a complex value chain starting with goals and ending with
fulfilled delivery. Most leaders see a high performance culture in their
organizations as an enabler for effective execution. That may be a necessary
condition but not a sufficient one. Some others see their own personal
productivity as a key driver of effective execution. Again, it may be an
inspiring factor but not a sufficient one. Most boards believe that linking
rewards to individual, group and company performance would motivate people
appreciate the value of performance. This helps but not without some rancour of
comparisons. Effective execution, like quality and safety, is a behavioural
state.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%;">A leader’s ability to mentor his organization on the various
stages of execution is an important condition for setting in place a natural
and inclusive performance culture for the company as a whole. From establishing
critical, top priority goals in focus to guiding the team on a journey that
extrapolates from actions, outcomes to results, accomplishments and finally
fulfilments is the essence of effective execution. Even institutions derive
actualization through effective execution. See the author’s blog post “<i>Institutional Actualization: The 5A Process
of Virtuosity</i>”, Strategy Musings, May 19, 2013 (<a href="http://cbrao2008.blogspot.in/2013/05/institutional-actualization-5-process.html">http://cbrao2008.blogspot.in/2013/05/institutional-actualization-5-process.html</a>).
There is a clear need for more contributions on effective execution practices
in management and leadership literature.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%;">Posted by Dr CB Rao on May 04, 2016<o:p></o:p></span></i></b></div>
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cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0tag:blogger.com,1999:blog-7790648712079591257.post-8146094935614386772016-05-03T09:20:00.001-07:002016-05-03T09:20:49.670-07:00Pyramid of Technology and Competitive Strategies: Drivers of Industrial Growth<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;">Technology is
the primary driver of industrial development. Generally, technology is viewed in
terms of two categories: innovative (or discovery) technologies and generic (or
copycat technologies). It is commonly understood that innovative technologies
open up new markets with first-to-market products and services, and generic
technologies thereafter follow with same or similar products, expanding the
markets further. The extent and pace of generic technologies depend on the
protection of intellectual property rights (IPR), and the attendant monopoly
rights that innovator firms enjoy. The sequence and balance between innovative
and generic technologies is well established in certain industries such as
pharmaceuticals and electronics while it is somewhat blurred in other
industries such as automobiles and Fast Moving Consumer Goods (FMCG).</span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Technology is
hard to develop innovatively for two intertwined reasons; innovation requires
intellectual capital which, in turn, requires an ecosystem that nurtures
innovation. Generally, innovation is considered technology, and investment
intensive and only financially very well endowed firms are considered capable
of performing in the innovation space. The real take on that is a bit
ambivalent. Fundamental research, no doubt, requires sophisticated equipment
and high calibre people, both of them costing a lot. On the other hand, some of
the brightest technological innovations be it genomics, epigenetics, stem
cells, artificial intelligence, drones and so on have been initiated on a small
scale in start-up or academic research formats. The fact of the matter is that
it is difficult to categorise technology in a binary format. This blog post
proposes that technology is complex and needs to be appreciated from multiple
angles.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Technology pyramid<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Pyramid is a
very graphic template to appreciate multi-layered activities or experiences. Regular
pyramid has a square base and an apex point joined to the base by four equal
triangles. Viewed from any angle of elevation, the pyramid would look like a triangle.
There are three separators in this triangle from a technology point of view. At
the very top lies the true innovator space. The middle space belongs to
improver-followers. The bottom space belongs to followers. While there is no
research body that points to clear statistics, the ratio of innovators to
improvers to followers tends to be 1:3:6 in technology oriented industries, and
1:1:8 in commodity oriented industries. The higher the complexity of innovation
of the top 10 percent, the greater will be the number of technology components.
This provides an opportunity for improver-followers (30 percent) to improve
upon the components, making the follower products similar but with some
improvements. Most players (60 percent) find even partial improvements
daunting, and are satisfied with being generic clones.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">The
relationship between technology and science has been age old. Science is the
foundation of technology. While classification of technologies as above tends
to be secular, depending on the edge of the base, there are four types of
industries, driven by four different types of sciences. The first is driven by
material sciences, the second by biological sciences, the third by mechanical
sciences and the fourth by computer sciences. Depending on the base scientific
driver, the proportions cited above vary. Semiconductors, medical equipment, wearables,
white goods are some examples of predominantly materials sciences driven
industries. Vaccines, ayurvedic products, pharmaceuticals, biologics and
regenerative medicines are examples of biological sciences driven industries. Robotics,
automobiles and machine tools are examples of industries driven by mechanical sciences.
Artificial intelligence, IoT and Cloud are examples of computer sciences driven
industries. In today’s world, though, there is significant cross-dependence and
convergence. Wearables, for example, are driven by advances in computer sciences
as well.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Strategy grid<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Given that technology
driven product strategy is the core of business strategy, the technology
pyramid influences the business strategy of a firm, which has two principal
components: investment direction and earnings potential. There are two
fundamental dimensions of investment; one of technology (including both design
and manufacture) and the other of marketing (including both selling and
distribution). Innovators need to be extraordinarily high on design and manufacturing
investments as well as marketing investments. Improvers need to be balanced in
terms of technical and marketing investments. Followers need to be high on
marketing investments but can afford to be low on design and manufacturing
investments. Only those products which are on phase-out can afford to be low on
investments on both technical and marketing dimensions. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">There tends to
be an earnings grid that corresponds to the investment grid and that has two dimensions:
the revenue grid and the (gross) margin grid. Gross margin (or, simply margin)
is defined by earnings before depreciation, interest and taxes. The innovator
firms would be high on both revenue and margin dimensions. Improvers will be high
on revenue grid and medium on margin grid. Followers would be low on both revenue
and margin grids. Clearly, there are logically strong incentives to be
innovators, followed by improvers and trailed by followers. The reality,
however, is otherwise. Most firms tend to prefer an improver strategy or a
follower strategy and only the strong hearted tend to pursue the innovator
strategy. One financial reason is that the investment intensity adversely
affects the net margin potential of a firm, because of depreciation and
interest. As a result, even innovator firms tend to follow a strategy of mixed
portfolio, with a fair proportion of improvers in their portfolio. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Competitive strategies<o:p></o:p></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">There are three competitive strategies of technology that firms can pursue based on the desired
positioning in the technology pyramid. These are innovation leadership,
improver differentiation and follower productivity. The classification has
relevance in terms of organizational leadership characteristics as well. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<br /></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Innovation
leadership<o:p></o:p></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Innovation
leaders are in the forefront of experimentation. Such firms tend to invest enormous
resources, including time and effort, not only in their primary scientific
drivers (say, materials or mechanicals) but also in exploration of how the
other drivers can also be leveraged for greater innovation. Microsoft acquiring
DNA sequence to store trillions of data bytes is an example. Another example is
driverless cars, combining car and computer technologies. Innovators are not disheartened by failures
and would press on with resource allocations until breakthroughs are achieved.
Innovation leaders are often driven by insightful and intuitive leaders who are
visionary rather than data oriented analytical leaders.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Improver
differentiation<o:p></o:p></span></i></b></div>
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<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Improver differentiation
looks at multiple components of a successful innovator system to develop a new
value proposition. Modular smartphone, for example LG G5 model, which enables
modular enhancers like DSLR camera which can be attached for performance
enhancement, reflects improver differentiation. Such firms tend to take off
where others stop. Fitbit, launching a fitness watch, is an example. Despite
the launch of Apple watch or Samsung Gear smart watch, Fitbit fitness band
continued to be popular. However, the firm recognized that getting a watch
bezel on to the band would be a key differentiator and portfolio enhancer. Improver
differentiators are driven by leaders who are observant and thoughtful leaders who
are creative rather than analytical leaders. </span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"> <o:p></o:p></span></div>
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<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Follower
productivity<o:p></o:p></span></i></b></div>
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<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></i></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Followers need
agility, accuracy and efficiency to play the generics game successfully. Wise
followers keep their generic follower templates ready even as the innovator
products are launched. They understand that the marketing universe is diverse,
and the bottom of the economic pyramid so large, that there would always be
scope for follower products. Generic pharmaceutical industry is a shining
example of how follower productivity enables me-too followers transform the
structure of an existing industry, and in the process virtually build a whole
new industry segment successfully. Generic followers succeed based on the
quality of management and rigour of operations. Leaders who lead follower
productivity tend to be operational and efficiency experts.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Crystallisation versus Commoditization <o:p></o:p></span></b></div>
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<b><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></b></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Those who are
familiar with solid-liquid physics and chemical engineering understand that
crystallization is a complex process. There are many natural crystallization
processes that are time scale dependent (examples, mineral crystals or snowflakes).
Innovation, likewise, is time dependent; leaders committed to innovation need
patience. Laboratory crystallization works on a number of parameters (concentration,
temperature, polarity, ionic strength etc.,) to ensure required
crystallization. Innovation similarly requires specialization, energy, passion
and persistence. More importantly, just as crystal growth happens with the
primary crystallization or the first nucleus formation (convergence) and then
develops secondary crystallization, innovation also starts with one unique idea
and then builds on to make a whole new innovative product eventually. Examples are electric cars built around high
performance electric batteries, smart phones around bright displays, driverless
cars on sensors, and so on. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 115%;">
<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Technology, on
the other hand, has a paradoxical aspect. Even highly sophisticated
technologies, with high investment intensity, are subject to rapid commoditization
so long as they are not protected by patent and monopoly rights. Commoditization
stimulates proliferation of competing products. Commoditization occurs when a
core or base product is recast into multiple end-user products as in the case
of iron and steel. Commoditization is an inevitable outcome of outsourcing of
design, development and manufacture. Outsourcing promotes diffused technological
entrepreneurship. As more systems developers and component makers get their
teeth into their own proprietary technologies, commoditization of technologies
tends to occur. This phenomenon, widely commonplace in white goods industry, is
now evident in electronics and other industries as well. Commoditization as a
phenomenon supports a wide base for followers, and works to the advantage of
consumers.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><br /></span></div>
<br />
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<b><i><span style="font-size: 12.0pt; line-height: 115%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;">Posted by Dr CB
Rao on May 03, 2015 <o:p></o:p></span></i></b></div>
</div>
cb@strategyhttp://www.blogger.com/profile/08830361140191018158noreply@blogger.com0