@ NCS

The essence of any entrepreneurship lies in its value creation. In product innovation there is a simple mathematics – you target a product at price X and manage to offer it at (X-Y) still being profitable. With technology some of them despite being huge innovation bring windfall profit for the promoters.

In the Service Industry HR mathematics for success is :
You normally get a productive at 20K. Through smart planning and organizational Eco-system you transform him to produce 50K and pay him 25K. That keeps everyone happy.

My question is – does a businessman actually create any value when a 20K-worth person produces just 20K for him ?

The answer lies in the quality of work culture of the organization. A well-planned team capability is many times more than the sum total of individual capabilities.

For example we can take the role of a salesperson of any company. As per normal practice he is to be given a set of targets defining price margins. His role includes sniffing opportunities down to closing the sales ensuring collection and delivery. If a company has 5 such salespersons, they should be working as parallel units thus making the accounting straight-forward and simple.

It really requires a skilled manpower to cover the whole spectrum of activities and deliver results. Hence we land up getting 5 people, say, in the range of 30K each.

While considering the involvement of time, we get to understand that about 60% time of each goes into activities, which can be done by a 10K range. It points to the ideal team composition to be – 2 people of 30K and 3 people of 20K range reducing the budget from 150K to 120K.

Now, can it produce bigger or even similar results ? How will the team work ?

The junior team should be moving and sniffing opportunities under the guidance of the senior team, which interferes with the junior team at the right time for better and faster closures. The junior team members should be handling the post-sales functions including delivery, collection and coordination while the senior team members should ideally be addressing 4 times the funnel than before.

Advantages -
Advantage of Productivity : The senior team shall be getting more bandwidth to address bigger and better cases with each team member producing 4 times more results than previously at 20% lower cost and 80-100% better result.

Advantage of Motivation : A person is likely to get more motivated in the works with intellectual challenges without which the works become dull and unexciting resulting in non-productivity and eventual attrition. Hence we are exploiting the capabilities of both the teams in a balanced manner retaining sufficient intellectual challenges for staying motivated.

Advantage of Bench Strength : Since juniors work in collaboration with the seniors, they get to learn the art from at a close quarter, which allows identification of talents and deploying them for expansion. For the seniors it becomes an advantage for climbing the ladder as team lead or manager.

Isn’t it self-explanatory as to why team capability is said to be much more than the sum total of individual capabilities ?

Same equation applies to Technical Support, back Office operations and any other organs.

Sometime when a company is on the boost, it keeps the customers smiling. The market gets crazy with the never-heard-before pricing. The customers are tempted to grab the deal.

So long as it is a pure consumer product with one shot value realization, Continue reading →

“ Knowing the job broadly ” and “ Knowing the job actually ” are two different things. While doing strategic planning “ Knowing the job broadly ” is sufficient but while executing “ Knowing the job actually” is critical. Team performance cannot be achieved without clarity in understanding the job.

As we move up the ladder and gain experience we claim, “We know” with alarming frequency. We develop a make-belief that we actually know everything about what we are managing. And it’s not a false claim as such, since at some point of time we have handled the said profile – be it sales profile, tech support, administration or accounting.

Still the jig-saw puzzle of the people’s performance is not getting solved. Why? Where is the gap then? Continue reading →

What differentiates between a frustrated and a great manager? A frustrated manager always complains of people, not able to deliver as per his expectation, while a great manager smoothly gets the work done from the similar set of people without much fuss and remains happy. Most of us being owner-cum-business managers frequently sound like frustrated managers, as if we are none but live complaint books.

Let us first accept the fact that a small entrepreneur cannot attract, retain and afford the quality talent (the IIT / IIM types). The quality of Manpower available to us would be those who find no takers in the top companies. It’s not that they are dull, dumb and flat. They are yet to be groomed to take up the challenge at that level. Their socio-economic background also does not help them to be there in the limelight.

As a result these people need to be under “Management by Direction” for a long period before moving into the state of “Involvement” and “Delegation” phases. Error in timing leads to frustration. “Management by Direction” is successful only with the properly defined job profile for the team members. Let us elaborate it with a few examples :

We appoint a salesman to approach customer for orders. Normally with the target he is set free into the market and asked to build the order book. Mostly the results are miserable. What happens actually is that the person is not able to make out where to go, whom to meet, what to say, how to say – all such embarrassing stuff giving him troubles. With no idea as to “how to do it” he is left with no other option than to fail.

To perform what he needs is a well defined direction, which includes specified area/accounts, movements and of course, the role play to understand the actual script as may be necessary during customer visits. Moreover, the basics of the product to be pitched and a clear guideline for escalation all these should be at his finger tips. The team lead (manager/owner in our case) should closely work with him on the cases followed by him and help him close them as far as possible. He should not be expected as one to close all the cases on his own. The salesman in course of time starts understanding the process and the pattern slowly.

Similarly a technical support person with no process of troubleshooting defined to him is sure to fail in most of the cases. He is supposed to be a technical artist attending and resolving cases, as are coming on his way. If we can define a process befitting for 75% cases and create an escalation point for deviation, we are going to get much better results.

In case of a back office executive who is asked to perform a fixed set of actions like filing and producing documents on demand it’s a world of puzzles with no clue as to what to do with multiple documents given to him on daily basis.

Out of fear he files it as per his understanding. In view of his intellectual capability expecting him to define a process all by himself is asking too much from him. A confused man cannot be the best performer.

Time and again we expect people to create process which is more of an art form. Going back to our basic assumption on the quality and background of the manpower we discover to our surprise that it is beyond their capability.

As a result we find one set of people with a well-defined process and job profile for each doing a much better job than the other set of people in the very same environment. The environment has its own set of long term challenges but for the starters it creates a situation where they can immediately justify their own cost.

The challenge is “Do I know the job that can well define the process at the micro level?”

Sometimes our impulsive reply is “Yes, Of Course!”

Wait and try to define it more clearly. We may taken by surprise to know that we are not in a position to reply many of the questions raised. May be for a few profiles we have clear replies but for the most of functions we are still blank. It seems to be loose threads; we have no idea what to do with.

Human beings feel uncomfortable when posed with question they do not have an answer to. We do not wish to face this reality and overcome the challenges. We wish someone can figure it out and resolve it for us. We expect the team members to deliver results and have the capability to do a few things which is even not known to me. Given our basic assumptions this is very unlikely to happen and probably the reason of our unhappiness.

Give some time pondering over various job profiles in the organization and keep posing questions “Do I know the Job?”

A genuine “Yes” soon starts coming from inside and you discover the same set of people doing wonders!

Driving business is like flying an airplane. A plan is “What to do” while a strategy is “how to do or the skill-set for execution”

A plan, therefore, defines when to fly, where to fly, which route to fly including its viability studies. It takes into consideration which Aircraft we own, its fuel capacity, strength and weakness. A good plan is all about taking extra advantage of the available resources while concealing weakness. Before we take decision for our business we need to consider:

Which is our main strength – Money or Skill?

If we have enough money power we may prefer to be in trade strategically corner stocks of certain category of products and control their prices; with CASH purchase from desperate sellers we may create a one stop shop having comprehensive range available with minimal spend in advertisement. Even investing on buying “Skill” and adding to the strength may not be a bad strategy, provided we are able to retain it. In the analogy of aircraft it implies that one can carry many passengers with one go flying long distance.

Some of us may have excellent understanding of technology, customers’ necessity and wonderful implementation skill but little money. A good strategy is, therefore, positioning us accordingly not to try and compete with the money power in our own space. “Value Addition” is the name of the game. Since the capacity of our fuel tank is limited, we need to take sorties with quick take off. Getting trapped into a single big order is sometimes suicidal. It is like being left out without fuel while still in air. Rather a strategic alliance with a financially strong partner without any skill is more advisable.

What is Market Maturity and how does it evolve?

Selection of products too much ahead of time and stocking heavily can be resulted in an air crash. Have an assessment of the Market Maturity around you and watch how it gets evolved:

Say for example, Cloud Computing is the buzz of the market exciting you. Ask yourself – is the market matured enough for that? Tablets are in but are the consumers around you comfortable with it? There are time lags, maturity lags between tech and market evolutions. A good strategy of product selection has to be in consideration with these lags. A sound strategy may be to devote our 80% resources on products and solutions which we feel market is ready for or would be in 3-4 months down the line. The balance 20% resources can be for the things we see getting on track in a few years from now. Finally a good strategy is not about just losing the game standing still, rather winning. It’s not about just wandering on the runway but taking off flying.

When we fly we are concerned about the local weather and the weather likely in the course of flight; but at the same time the weather forecast 10000 km away may not be material if we are on a short-distant flight of just 500 km.

How big and old are you?

This impacts the speed at which we can change and the way customer views at us. Our strategy and communication need be fine -tuned accordingly.

It’s not just about the communication; the whole work needs to be evolved around it. Remember that the customer gives us best business when comfortable with us.

On one hand being small and new has its own appeal. We can strategize to position ourselves as “Personally at you service, Sir!” along with the appeal of “I am young and born with the prodigy”. This makes a lot of customer comfortable to get hooked to us. But ensure that the customer expectation and experience do not vary.

Being old and large on the other hand has its own appeal too. It has to be the reliability factor. Position the cool headed approach of a seasoned player. Many customers want to go with the proven person and proven technology only.

This should open us up for further exploration and set up an interesting winning strategy for our business. But remember, the plan alone is not sufficient for success; it needs to be implemented with right strategies.

Tactic being the third factor in the game is nothing the skill-set of the Pilot for actual flight. It has to be flown overcoming lot of constraints and yet landing back safely before running out of fuel. In case one fails – the Man or the Machine –meets a crucial end.

I shall be covering some crucial tactical aspects in coming months.

Running business is tough. Building business is even tougher. As we see a business being set well finally, we tend to savor the magic moments of the past. The Heart wants Life to “Pause” and “Replay” the glimpses of success again and again. We come under an impression, though not far from truth, that we have finally cracked the DNA code of a successful business venture and this can be replicated now.

Why touch the winning combination and the success formula?

Reset and ask yourself a few questions sitting on your customer’s chair. Is he at all interested to know them all?
– How big you have grown?
- How successful you have been?
- What business challenges you face?
- How difficult it is to establish a service and distribution company?
- On and on and on.

But time and again we sit on our laurels and expect the world around us to listen to things they have no interest in. We expect them to be sympathetic and loyal to us just because once we have served them well.

What really interests the customer of this fast moving world is:
– What you have done recently for him.
- The quality of work matching his expectation.
- The Concern of the vendor for his future requirements

Now reset yourself and sit on your Vendor’s chair. He also has similar questions:
- Are you giving him sufficient market penetration?
- Are you offering value addition to his efforts?
- Does the market still perceive you to be the correct choice for carrying the brand?

Finally reset yourself and sit on your Employee’s chair. He also has similar questions:
- The Promoters have succeeded; what about me?
- Is the company offering me sufficient growth trajectory?
- Am I going to learn sufficiently to survive in the next round?

As we sit on our laurels we see the trust of the stake holders of our success slowly dwindling. The First victim is the team. Their excitement in the job starts dipping. The energetic look of the company slowly turns dull. The customers feel the changes and slowly they also start drifting away. Vendors are left with no choice than to leave you for their own safety.

The blame game begins. There is no reward for royalty. We created market for the vendors but they left us. We offered job to people, made them learn but they deserted. We served customers at odd times and they simply went ahead with the new vendors.

The root cause was our inclination to continue with the “Winning Combination”. What is considered safe bait is actually the death trap. Be bold and mess up with the Winning Combination.

- Change the job profile of your key team member at regular intervals to give them more growth opportunity and challenging tasks.
- Change the strategy – Start strategizing to ensure that all your team members succeed.
- Work and Rework on your customers’ interaction or rather customer engagement strategies. It’s not just calling or gifting. It needs more innovation.
- Rework on the offerings. Experiment with a few new things twice a year. Keep some new stories up your sleeves always.

Just remember the fire you had once when you had started as an entrepreneur. There are many young guns moving around you with the same fire in their belly. They are competing head on with your team members at the customer’s place. Have you equipped your team members with sufficient ammunition – training and mental strength to take on those challengers?

Mess up with your success before someone else does it and keep on succeeding.

All businesses wish to grow. Width and Depth are the two directions in which growth can
happen.

Depth Model : If you have a legacy and set goodwill it is good to build strongly on that.
For trading kind of a business it is all about selection of new products and pushing it up is a
wonderful proposition. Probably selecting the correct vendors and offering the right king of
a service platform – logistics, after-sales, billing etc at times are good enough to enhance the business. Some new customers are automatically attracted in the process.

If you are into solution selling more customer engagement and using them as referral to acquire incremental customer base is known to work well. So you acquire small set of customers at a regular interval and also plan to sell more solutions to the relationship customers.

Success in the dept model needs a regular analysis of the buying & requirement pattern of your customer base as well as a sharp eye on the evolutions happening at the vendor ends in terms of new solution segments. At times it is difficult for us to scale up the requisite skill set to enter the segment. You should negotiate well with the vendor to offer you quality pre sales and after sales support to come up with a winner.

Width Model : It is about acquiring new customers through carpet bombing – targeting every potential prospect. This model is best suited for OEM kind of a working for acquiring market share and developing reach. If you are an exclusive representative for the product you have to do it to justify the exclusivity.

Width model requires advertisement, events, road shows, cold calls etc. It requires sufficient foot soldiers to be deployed to get the required penetration.

Hall mark of the model is the time lag between efforts and results. Most of the Width Model activities give results in a time lag of 3-12 months. Depending upon product to product it may even go as high as 18-24 months before you start getting sweet returns.

At times moving into underdeveloped market with even regular products can give a good Width expansion.

An aspiring business man would love to have something Exclusive in his kitty. It gives that
edge and the mental satisfaction – Only I have it. It is no doubt an excellent proposition but it is equally toxic and risky.

The Exclusivity Trap : A well known company with a new concept/solution approaches you with an exclusivity carrot. It looks so very interesting and rewarding. A target sheet is agreed upon and signed. Reflect:

Many a times we are attracted by the fantastic margins on the offer. Sometime we fail to
realize that the margins are for the Efforts required to make it happen. Lack of such consistent efforts leads to non achievement of the targets and finally breaks up of the relationships.

The OEM sales person knows that this is unrealistic. He deliberately appoints a new player
who is excited by the prospect of getting rewarded by the big guy. He gets you to work really hard and develop the ground. Lack of target achievement clause is then evoked at the right stage.

Under pressure of exclusivity many a times our working capital is blocked under wrong
inventory and it leads us to sink slowly.

So before you get excited about that yummy exclusivity proposal evaluate the what-if scenarios before jumping into the bandwagon.

Work out your expansion plan with this in mind.

Manohar Malani
Manohar.malani@ncs.net.in
FB: manohar.malani@gmail.com

Dear Friends,

Decided to acknowledge the contribution of those who make my daily existence possible. Here started my day.

Got up to a Glass of Water – Wait… need to acknowledge the contribution of Water Pump Operator, the Central Filter Unit Team, Team which built it, own building darban, Our Plumber, Our own house water filter…Oops probably a few hundred people behind this glass of water.

Went to toilet – Plumber to sweeper to the Corporation team in charge of waste management.Got my cup of tea with newspaper – the humble milkman, the newspaper wala, the team printing newspaper….Got to my breakfast table – The bread making team, the farmers, the traders, the Fruit wala and all in that chain.My breakfast is not over and I feel a strong sense of gratitude towards the social frame work.

Still I have not yet started counting the mental comfort the social structure offers. There is not further proof to this then the massive success of Social Media Networking – Facebook, Google Plus, Linked In and all in the space.

I awake to the fact that I am so much In-Dependence.

And Yes,  I also contribute to life and touch many people’s life day in day out. To make my life meaningful, I decide to befar more active in my contribution back to the society.

That’s my action resolution for 15th August. What’s yours?

Join our Initiative @ www.in-dependence.org