Sunday, November 13, 2011
Sunday, November 6, 2011
Small Business Lessons from the Eurozone Crisis
Our venerated Prime Minister, Dr. Manmohan Singh, delivered weighty comment, when asked for a prescription as a 'Global Guru', for the Eurozone Crisis, on the side-lines of the G20 Summit 2011 in the luxurious environs of Cannes.
Sunday, October 30, 2011
My Customer Management Amalgan-classic, new, and no longer relevant
The farmer in the picture above is from the Krishna District of Andhra Pradesh. I met his friends and him in June 2011, as part of a new farm input launch that I essayed for a major corporation.
I demonstrated my product to the farmers, recorded the proceedings on video and by way of still images, published a PDF, and asked my corporate client to publish and to use the communication throughout their distribution network, using the Internet.
I was first trained to do this kind of work in 1972. I must depend on my feeble memory for records of what happened and of what we did. Training was a massive exercise in logistics. It was hard to visit more than 2 villages a day on a sustained basis. Getting farmers together required entertainment and hospitality, much of which was consumed by volatile village children! Surface post took about as long as it does now; urgent long-distance calls had to be booked at least an hour in advance. Juniors such as I had inflated roles in bridging multiple steps in organizational ladders.
What has changed, and what endures? Here is my list:
1. Customers have more choices now. They are more demanding as well.
2. Marketing has become cheaper and quicker.
3. Not everyone adopts new technology at the same pace. You can take advantage of this, or become its victim!
4. You cannot smell or touch on the Internet-as yet. These two senses can be leveraged by 'brick-and-mortar' types.
5. Supervisors are nearly out. This applies to many staff functions and positions as well.
Marketing tends to be a controversial function because many professionals without formal and updated knowledge of the matter (such as I!) claim to be authorities. Most owners undervalue branding as it is so intangible. However, we can all agree that the Internet has changed Marketing substantially. There are new avenues for small and medium enterprises to build sustainable competitive advantage.
I would like to know your experiences and views on the matter.
I demonstrated my product to the farmers, recorded the proceedings on video and by way of still images, published a PDF, and asked my corporate client to publish and to use the communication throughout their distribution network, using the Internet.
I was first trained to do this kind of work in 1972. I must depend on my feeble memory for records of what happened and of what we did. Training was a massive exercise in logistics. It was hard to visit more than 2 villages a day on a sustained basis. Getting farmers together required entertainment and hospitality, much of which was consumed by volatile village children! Surface post took about as long as it does now; urgent long-distance calls had to be booked at least an hour in advance. Juniors such as I had inflated roles in bridging multiple steps in organizational ladders.
What has changed, and what endures? Here is my list:
1. Customers have more choices now. They are more demanding as well.
2. Marketing has become cheaper and quicker.
3. Not everyone adopts new technology at the same pace. You can take advantage of this, or become its victim!
4. You cannot smell or touch on the Internet-as yet. These two senses can be leveraged by 'brick-and-mortar' types.
5. Supervisors are nearly out. This applies to many staff functions and positions as well.
Marketing tends to be a controversial function because many professionals without formal and updated knowledge of the matter (such as I!) claim to be authorities. Most owners undervalue branding as it is so intangible. However, we can all agree that the Internet has changed Marketing substantially. There are new avenues for small and medium enterprises to build sustainable competitive advantage.
I would like to know your experiences and views on the matter.
Sunday, October 23, 2011
Names
It is nearly impossible to sustain and grow a business without names. We tend to focus on branding physical products. There is a relatively new and welcome trend to name services as well. Large corporations use umbrella branding. Entrepreneurs shy away from investments in such intangible assets. The value of a name is sometimes realized only when a business merges with another.
Formal management learning does not have adequate content related to the process of naming. This is an indication of the neglect of psychology by management teachers. My own exposure to the subject has been in the course of employment and my own business practice. I would like to share my recollections with you in this post.
1. Segmentation and targeting. I recall the case of a new systemic fungicide with which I was associated. France was seen as the prime market, so a sample of French farmers were surveyed for their choices of names. They settled on the French word for 'blood'. The latter reminded them of the new brand's ability to enter the sap systems of crops. This name made no sense in Brazil, so the brand had another name in South America. Large corporations can invest adequately to gain recall in global customer minds of novel names. Small and medium enterprises have to respond to the challenge differently. There is a risk of owners foisting personal choices on markets. It is important to allow typical customers to select names that suit branding best.
2. Values and passing fancies. My Mother bound copies of magazines in the 1930s in order to preserve knitting and crochet patterns. My generation has preserved these vignettes of a past age. Top cosmetics of this Millennium continue with names from nearly a century ago! The models change periodically, as do some physical features of the brands as well, but the name remains steadfast amidst such turmoil. It is tempting to pick fashionable names but classic ones will yield greater returns in the long run.
3. Life cycle management. This aspect is contradictory to the immediately preceding one. Brands for young people, and ones related to personal preferences, will become irrelevant in rather short periods of time. A business should develop and maintain a pipeline of brands that yield strategic flexibility. Perhaps this dimension favors large corporations over their much smaller competitors. However, a creative small-business owner can innovate streams of brands that appeal to changing customer tastes. There is a strong case for a range of brands covering as many possible future segments as possible. We can garner clues by careful observation of what customers do, especially with regard to emerging gaps in their baskets of needs.
4. Registration. I do not know about other countries but name registration in India is nearly impossible! The full process takes at least a decade, and unscrupulous elements are able to file prior applications for nearly every word under the Sun! Lawyer bills and threatening claims never end. The best compromise I know is to surreptitiously prefix all names with the founding one of a company or even a family. I think it also helps to establish widespread usage as soon as possible after the first name search and application.
5. Plagiarism, scope, and growth. This dimension is related to life-cycle management (outlined above). The best names are bound to be imitated. This can be an advantage when a proprietary name becomes a kind of generic for an entire product or service category. However, it is best to try and register a name with a statement and a graphic. Another tactic is to use goodwill for extensions, or better still, use just one name as an umbrella for numerous extensions. However, such an approach can become self-defeating over time if an enterprise begins to serve discrete market or customer segments. Clustering is more of an art than a management process, but it is invaluable in creating a fortress around a brand name.
I have avoided specific examples in this post since name owners might object, but can illustrate the concepts in my mind, in bilateral and private communication. Do write to me with your email address in the space below this post, if you would like my counsel and help in naming your brands.
Now for a practice case: the mango tree in the picture below is from Behat in the Saharanpur District of Northern India.
Formal management learning does not have adequate content related to the process of naming. This is an indication of the neglect of psychology by management teachers. My own exposure to the subject has been in the course of employment and my own business practice. I would like to share my recollections with you in this post.
1. Segmentation and targeting. I recall the case of a new systemic fungicide with which I was associated. France was seen as the prime market, so a sample of French farmers were surveyed for their choices of names. They settled on the French word for 'blood'. The latter reminded them of the new brand's ability to enter the sap systems of crops. This name made no sense in Brazil, so the brand had another name in South America. Large corporations can invest adequately to gain recall in global customer minds of novel names. Small and medium enterprises have to respond to the challenge differently. There is a risk of owners foisting personal choices on markets. It is important to allow typical customers to select names that suit branding best.
2. Values and passing fancies. My Mother bound copies of magazines in the 1930s in order to preserve knitting and crochet patterns. My generation has preserved these vignettes of a past age. Top cosmetics of this Millennium continue with names from nearly a century ago! The models change periodically, as do some physical features of the brands as well, but the name remains steadfast amidst such turmoil. It is tempting to pick fashionable names but classic ones will yield greater returns in the long run.
3. Life cycle management. This aspect is contradictory to the immediately preceding one. Brands for young people, and ones related to personal preferences, will become irrelevant in rather short periods of time. A business should develop and maintain a pipeline of brands that yield strategic flexibility. Perhaps this dimension favors large corporations over their much smaller competitors. However, a creative small-business owner can innovate streams of brands that appeal to changing customer tastes. There is a strong case for a range of brands covering as many possible future segments as possible. We can garner clues by careful observation of what customers do, especially with regard to emerging gaps in their baskets of needs.
4. Registration. I do not know about other countries but name registration in India is nearly impossible! The full process takes at least a decade, and unscrupulous elements are able to file prior applications for nearly every word under the Sun! Lawyer bills and threatening claims never end. The best compromise I know is to surreptitiously prefix all names with the founding one of a company or even a family. I think it also helps to establish widespread usage as soon as possible after the first name search and application.
5. Plagiarism, scope, and growth. This dimension is related to life-cycle management (outlined above). The best names are bound to be imitated. This can be an advantage when a proprietary name becomes a kind of generic for an entire product or service category. However, it is best to try and register a name with a statement and a graphic. Another tactic is to use goodwill for extensions, or better still, use just one name as an umbrella for numerous extensions. However, such an approach can become self-defeating over time if an enterprise begins to serve discrete market or customer segments. Clustering is more of an art than a management process, but it is invaluable in creating a fortress around a brand name.
I have avoided specific examples in this post since name owners might object, but can illustrate the concepts in my mind, in bilateral and private communication. Do write to me with your email address in the space below this post, if you would like my counsel and help in naming your brands.
Now for a practice case: the mango tree in the picture below is from Behat in the Saharanpur District of Northern India.
The orchard belongs to a friend. It is replete with the most amazing varieties of fruit trees. The produce is sold locally and the orchard is run nearly on a hobby basis. What if the owner wishes to expand? A name will become important as the fruit will have to compete with market arrivals from other areas.
How would you address such a challenge?
Sunday, October 16, 2011
A True Story on a Test for Business Viability
I believe that Revered Shri Shri Kantisen is an Avatar of Leonardo da Vinci. Kaka (uncle) to the world, I have abrogated additional kinship to his lustrous dynasty. This is not entirely inappropriate as Kaka has indeed been a father to me in my professional life.
Today, I would like to write about a true story he told me directly about the establishment of an industrial empire of vast social significance with his late father.
The founding family was an apparently average member of the employee community around the time of India's independence. Kaka's father (Papa) took a loan from his wife, permission from his employers, and began to recycle photographic chemical waste in to a useful product, the nature of which I forget.
Kaka says that he knew they had a viable business when a customer returned to make a repeat purchase.
Kaka is not a garrulous person. Hence, I have always strained to register every one of his gems of words in the permanent recesses of my mind. The term 'returning customer' is my memory hook for an acid test to know whether a business is viable.
Reticence in speech is no indication of paucity of thought. Kaki (Mother Chanda) has best demonstrated the values of intricate logistics that her immortal husband has consistently displayed, by emancipating vast swathes of rural women in her homeland of Kutch.
The most befitting tribute of which I am capable for the heavenly couple of Kaka and Kaki is to focus on the goal of returning customers, communicating minimally but acting for it without variation.
You can use this secret to establish and to grow an ethical and socially relevant enterprise.
Sunday, October 9, 2011
Management Principles and Practices for Sustainable Business
Vijay Mallya has set a scorching pace for his business peers since he inherited the mantle of leadership for the business group founded by his late father. His announcement that Kingfisher Red would wind down (http://www.moneycontrol.com/news/business/will-exit-low-cost-kingfisher-red-business-vijay-mallya_591574.html) has therefore been a deflation for many of his admirers.
Business closure is not necessarily bad. It is better than bankruptcy, loss of relevance, and to an extent, stagnation as well. Suppliers, distributors, financiers, and those who have shares, are vital considerations, apart from employees, when it comes to closing a business (this may not be an issue with the UB Group as a whole, but all enterprises that close down do not have branches to absorb people from a failed business).
It is popular to think of conservation in terms of the environment, but the long-term viability of a business is also important from society's perspective. What can a management team do to ensure that a business for which they are collectively responsible, thrives in to the foreseeable future?
1. Profits and reserves: it is tempting, even justified in some circumstances, to incur losses in order to enter a market. However, it is not a viable approach for any significant length of time. Profitability comes from high unit margins, volumes, and cost effectiveness. All legal approaches to protect and grow are worthy of consideration. Profit appropriation should also be conservative, building reserves in preference to the short-term gains of dividends.
2. Environment scanning and potential problem analysis: these processes are best left to independent domain experts. Environmental scanning and reviews of preventive and contingent actions against serious business disruptions should be annual if not ongoing. Environment scanning should be as broad-based as possible, searching for trends in politics, society, education, and international relations, to mention a few areas.
3. Regulatory relationships and compliance: cronyism and corruption cannot sustain business advantage. Politicians tend to fall from grace over time, and their eclipses can be unexpectedly rapid. There is a general impression that capitalist systems based on free enterprise are free from the influences of caucuses and other subtle forms of liaison, but the reality is that cunning people in power may wield their discretionary powers without obvious exposure. Politicians with legal acumen are especially adept in such matters.
4. Fixed commitments: permanent employees tend to become sinking stones around the necks of their organizations. This is glaring in the case of bureaucracies of poorly administered countries, but large and aging corporations can be just as negligent in keeping their fixed costs under control. Establishment and hospitality costs are other insidious areas that leak cash disproportionate to the net and combined values for all stakeholders. Anytime is right for a cost-effectiveness exercise: a management team should not overlook this aspect of long-term business viability during the 'good times'.
5. Life-cycle management: people, products, and services have phases of initiation, rapid growth, stagnation, and decline. Organizations revolve around people, whether they are in sales, research, manufacturing or general management. Customers also change over time, and are notorious for fickleness in their choices. Corporations have to juggle positions to keep streams of new people, products, and customers flowing. This does not mean that older cogs of an enterprise should be abandoned. The case of older aircraft cabin crew is typical of the conundrums management teams must confront.
Business viability is not limited to large corporations. Here is a picture from an evening in Saharanpur, a small but bustling town in Northern India:
You cannot miss this shop if you take a train in or out of Saharanpur. However, the area is choc-a-bloc with competition to assuage hungry and thirsty travelers. Here is an outlet selling hot milk. The service is most popular. The shelves of bottled drinks are no match for the man who dances as he stirs the cauldron and drops exotic spices in to the sea of milk.
Is this business viable in the long term? What if neighboring shops copy? The picture is from a chilly winter's evening: what can the establishment do to retain custom during the hot summer nights that Saharanpur experiences? There are droves of questions and ideas that come to mind as one contemplates the pleasures, profits, and future of retailing fresh milk.
As always, I would love to hear from you!
Business closure is not necessarily bad. It is better than bankruptcy, loss of relevance, and to an extent, stagnation as well. Suppliers, distributors, financiers, and those who have shares, are vital considerations, apart from employees, when it comes to closing a business (this may not be an issue with the UB Group as a whole, but all enterprises that close down do not have branches to absorb people from a failed business).
It is popular to think of conservation in terms of the environment, but the long-term viability of a business is also important from society's perspective. What can a management team do to ensure that a business for which they are collectively responsible, thrives in to the foreseeable future?
1. Profits and reserves: it is tempting, even justified in some circumstances, to incur losses in order to enter a market. However, it is not a viable approach for any significant length of time. Profitability comes from high unit margins, volumes, and cost effectiveness. All legal approaches to protect and grow are worthy of consideration. Profit appropriation should also be conservative, building reserves in preference to the short-term gains of dividends.
2. Environment scanning and potential problem analysis: these processes are best left to independent domain experts. Environmental scanning and reviews of preventive and contingent actions against serious business disruptions should be annual if not ongoing. Environment scanning should be as broad-based as possible, searching for trends in politics, society, education, and international relations, to mention a few areas.
3. Regulatory relationships and compliance: cronyism and corruption cannot sustain business advantage. Politicians tend to fall from grace over time, and their eclipses can be unexpectedly rapid. There is a general impression that capitalist systems based on free enterprise are free from the influences of caucuses and other subtle forms of liaison, but the reality is that cunning people in power may wield their discretionary powers without obvious exposure. Politicians with legal acumen are especially adept in such matters.
4. Fixed commitments: permanent employees tend to become sinking stones around the necks of their organizations. This is glaring in the case of bureaucracies of poorly administered countries, but large and aging corporations can be just as negligent in keeping their fixed costs under control. Establishment and hospitality costs are other insidious areas that leak cash disproportionate to the net and combined values for all stakeholders. Anytime is right for a cost-effectiveness exercise: a management team should not overlook this aspect of long-term business viability during the 'good times'.
5. Life-cycle management: people, products, and services have phases of initiation, rapid growth, stagnation, and decline. Organizations revolve around people, whether they are in sales, research, manufacturing or general management. Customers also change over time, and are notorious for fickleness in their choices. Corporations have to juggle positions to keep streams of new people, products, and customers flowing. This does not mean that older cogs of an enterprise should be abandoned. The case of older aircraft cabin crew is typical of the conundrums management teams must confront.
Business viability is not limited to large corporations. Here is a picture from an evening in Saharanpur, a small but bustling town in Northern India:
Is this business viable in the long term? What if neighboring shops copy? The picture is from a chilly winter's evening: what can the establishment do to retain custom during the hot summer nights that Saharanpur experiences? There are droves of questions and ideas that come to mind as one contemplates the pleasures, profits, and future of retailing fresh milk.
As always, I would love to hear from you!
Sunday, October 2, 2011
Pricing and Margins Along the Supply Chain
Demands to improve margins of all stakeholders never cease. Who does not want to make more money? It may be a cultural trait that Asians use the 'poor and small' vantage point with such persistence against business associates with connotations of wealth and privilege. The latter are often assumed to be natural and inevitable corollaries of better education, western mannerisms, and English fluency. Reverses are mostly true. Conservative Marwaris for example hide oceans of riches under simple garb, servile gestures, and loud displays of the vernacular.
A major obstacle in negotiating fair spreads of profits along the value chain is that everyone wishes to determine how much ultimate consumers should pay. The sticker price, like rack rates of hotels is rarely if ever realized. Much humor surrounds the price first quoted by a friendly seller from the unorganized sector of a market! Deep discounts have become 'force rigueur'. Links in the distribution chain downstream of a manufacturer ask for discounts primarily to manipulate the final consumer price. Organizations with bludgeoning inventories, fixed costs that are threatening proportions of projected cash inflows, crippling debts and top-line focus are easy prey for margin vultures.
Price is an integral link in the Marketing Mix. Consumers who gladly avail of deep discounts are also trenchant critics of brand owners who appear devious in their declared brand prices. A discount that is seasonal may be genuinely appreciated as a mark of goodwill, but expect no respect if you are not serious about your Maximum Retail Price. Discounts along the supply chain should also be linked with specific tasks and responsibilities rather than dictated by convention. The association of medicine sellers in India achieved much notoriety towards the end of the 20th century for blackmailing indulgent industry executives in to incentives entirely removed from the life-saving nature of the goods involved.
One should never negotiate under pressure. Hence, pricing and margin should be determined by consensus before a brand launch. This requires that all stakeholders take part in the planning process. Secrecy is an issue when members of a supply chain are not exclusively wedded to any one manufacturer. This is an issue for brand owners to optimize within the framework of national laws to foster competition.
Do write and let me know what you think about pricing, margins, and discounts. I would love to participate in your processes for these vital cogs of profitable and sustainable enterprise.
The picture below if of a meeting between an executive of a reputed farm input corporation and mango orchard owners. The person with the microphone is from the agro-input corporation. The host is on his right. The expansive cottage is his and he served a sumptuous feast as part of the event in the true tradition of Indian hospitality. The two people on the right are mango orchard owners. They want deep discounts and credit to buy farm inputs.
A major obstacle in negotiating fair spreads of profits along the value chain is that everyone wishes to determine how much ultimate consumers should pay. The sticker price, like rack rates of hotels is rarely if ever realized. Much humor surrounds the price first quoted by a friendly seller from the unorganized sector of a market! Deep discounts have become 'force rigueur'. Links in the distribution chain downstream of a manufacturer ask for discounts primarily to manipulate the final consumer price. Organizations with bludgeoning inventories, fixed costs that are threatening proportions of projected cash inflows, crippling debts and top-line focus are easy prey for margin vultures.
Price is an integral link in the Marketing Mix. Consumers who gladly avail of deep discounts are also trenchant critics of brand owners who appear devious in their declared brand prices. A discount that is seasonal may be genuinely appreciated as a mark of goodwill, but expect no respect if you are not serious about your Maximum Retail Price. Discounts along the supply chain should also be linked with specific tasks and responsibilities rather than dictated by convention. The association of medicine sellers in India achieved much notoriety towards the end of the 20th century for blackmailing indulgent industry executives in to incentives entirely removed from the life-saving nature of the goods involved.
One should never negotiate under pressure. Hence, pricing and margin should be determined by consensus before a brand launch. This requires that all stakeholders take part in the planning process. Secrecy is an issue when members of a supply chain are not exclusively wedded to any one manufacturer. This is an issue for brand owners to optimize within the framework of national laws to foster competition.
Do write and let me know what you think about pricing, margins, and discounts. I would love to participate in your processes for these vital cogs of profitable and sustainable enterprise.
The picture below if of a meeting between an executive of a reputed farm input corporation and mango orchard owners. The person with the microphone is from the agro-input corporation. The host is on his right. The expansive cottage is his and he served a sumptuous feast as part of the event in the true tradition of Indian hospitality. The two people on the right are mango orchard owners. They want deep discounts and credit to buy farm inputs.
It takes a decade for a mango sapling to become a productive tree. Intense annual agronomy starts a good 6 months before each year's harvest. Farm inputs have imported ingredients and scarce indigenous ones as well. Working capital is a major constraint for all stakeholders in agriculture and farming. This is heightened in horticulture from a farmer's perspective.
How would you spread costs and margins along the value chain in such a situation?
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| From SunoSuno Stock |
Sunday, September 25, 2011
Leadership Conundrums and Solutions
Why is leadership such a contentious issue in Management literature? There is only one way to calculate IRR (Internal Rate of Return), but innumerable theories and ways on how to lead. We have not seen the end of this subject! New articles on leadership continue to surface. Some of them appear to be controversial. Dhoni, India's current cricket captain for example, is highly recognized for his leadership skills. However, the following link indicates a different line:
Should practitioners of Management emulate Dhoni? I personally prefer other models, but respect the choices of others in this matter.
Perhaps there are multiple ways of leading people. I sense that the spread of education and financial security spawns new leadership styles. You cannot inspire the rich and famous in the same way as their less fortunate fellows. This applies to intellectual resources as much as to material ones. I suspect that most people want to emerge as leaders. Those who lack confidence and opportunities may exhibit servile qualities, but harbor ambitions of power and influence at the same time.
A mentor is a great help in getting opportunities to lead. The reverse is not always true however, because deserving people can move on from circumstances in which they feel oppressed.
I suggest that integrity is at the core of leadership. People flock to those they trust. However, no leader can take followers for granted. That is why the fall of leaders is so inexorable over time. Even Mahatma Gandhi has trenchant critics. A friend recently counseled me to listen to my inner voice when I confronted him with an issue related to spiritual leadership. I have concluded that this could be an optimal approach, and the one adopted by relatively successful leaders as well. Be consistent and transparent in thought. Those who wish to follow you will do so automatically if gradually.
Such an approach cannot work in an organizational setting, which brings the nature of leadership on the table. There are inherent differences between obedience and sharing values. No mortal can force others to discard their thinking and analytical faculties. It is safe to keep these aspects in mind when ordering others around or wallowing in the apparent adulation of those who wish to curry favor.
Communication skills are efficient substitutes for leadership. We can use the principles and methods of the Personality Grid and of Transactional Analysis to influence actions and even perceptions of others. These may lead to positions of leadership if transactions focus on a homogeneous group of people. I suspect that modern and self-promoted Gurus use such approaches, even if largely by instinct.
MBO (Management by Objectives) is another alternative to leadership. Let colleagues agree on roles, tasks, deadlines and resources. Why bother with leadership? This is my view. I would like to know yours.
I can help with using the Personality Grid, Transactional Analysis and MBO.
Who is the leader of the pack of children in the photograph below?
I suggest that integrity is at the core of leadership. People flock to those they trust. However, no leader can take followers for granted. That is why the fall of leaders is so inexorable over time. Even Mahatma Gandhi has trenchant critics. A friend recently counseled me to listen to my inner voice when I confronted him with an issue related to spiritual leadership. I have concluded that this could be an optimal approach, and the one adopted by relatively successful leaders as well. Be consistent and transparent in thought. Those who wish to follow you will do so automatically if gradually.
Such an approach cannot work in an organizational setting, which brings the nature of leadership on the table. There are inherent differences between obedience and sharing values. No mortal can force others to discard their thinking and analytical faculties. It is safe to keep these aspects in mind when ordering others around or wallowing in the apparent adulation of those who wish to curry favor.
Communication skills are efficient substitutes for leadership. We can use the principles and methods of the Personality Grid and of Transactional Analysis to influence actions and even perceptions of others. These may lead to positions of leadership if transactions focus on a homogeneous group of people. I suspect that modern and self-promoted Gurus use such approaches, even if largely by instinct.
MBO (Management by Objectives) is another alternative to leadership. Let colleagues agree on roles, tasks, deadlines and resources. Why bother with leadership? This is my view. I would like to know yours.
I can help with using the Personality Grid, Transactional Analysis and MBO.
Who is the leader of the pack of children in the photograph below?
I told these five boys about the five benefits of silica for crops and trees. The fellow next to me (second from left) rattled off all five benefits after me and won Rs 50 ($1). It was not a matter of memory alone for he seemed to wield some influence over the others, especially the guy on his left who seemed to know the answers just as well. He was also instrumental in keeping the girls at bay! This probably won him the support of the male chauvinist village elders. Leadership can be situational. Perhaps each of the boys in the picture as well as all the excluded girls could be popular leaders in the right circumstances.
The picture is from Malihabad in India (Uttar Pradesh-close to Lucknow).
Can you think of ways in which introverts and followers can transform in to positions of authority and influence?
Sunday, September 18, 2011
Zero Based Budgeting
A book on Zero Based Budgeting (ZBB) changed my professional life. I think I came across it at an airport bookstore in the early 1980s. President Carter used ZBB during his administration. Perhaps the Washington of today should return to it!
ZBB does not allow established costs to continue without fresh justification. We tend to extrapolate historical costs and revenues as well in to the future. Jobs are the most sensitive of fixed costs. No one can propose losses of own jobs and those of close friends. However, ZBB requires that all positions in an organization are looked at afresh during a budgeting process. Task consolidation and suspension of fresh recruitment are common though less invasive outcomes of ZBB.
It is easier to apply ZBB to outsourced services such as advertising. Travel budgets are favorites targets of all cost cutting exercises, but ZBB is a potential exception in this respect. One can retain or even enhance any cost proposal that has credible, specific, and probable prospects of gain. Lateral thinking is an important corollary to ZBB. Confrontations with binary choices plaque ZBB.
An excellent way to initiate ZBB thinking is to apply it to yourself, especially if you are in a senior position of influence. One of my former colleagues did this by flying internationally in economy though he was entitled to First Class luxury and privileges. Another voluntarily downgraded the standard of hotel accommodation for himself.
ZBB has useful applications in personal life. There are a number of fixed expenses such as vacations on which we cut back instinctively in lean times. However, searching questions can lead to substantial reductions of energy costs and mundane things like frequent dry cleaning.
The ZBB process is relatively simple, though automation can consume some resources at the outset in large organizations. You have to make a detailed and written justification for each item of expense. All proposals are vetted, preferably by more than one person. No expense finds place in a budget if it is not proposed or if it is rejected.
Write to me if you would like to know more, or apply it in your situation.
What if you were in charge of Gudiwada in coastal Andhra Pradesh. A street scene from this busting town appears below:
Which kinds of budgets would you enhance? How would you link things such as garbage clearance with monies spent on paper for such essential services? Which budgets would you cut and how? Many people employed by corporations that work for profits criticize government employees and politicians for frittering away resources. Could any such critic do better in real life?
I would love to hear from you!
ZBB does not allow established costs to continue without fresh justification. We tend to extrapolate historical costs and revenues as well in to the future. Jobs are the most sensitive of fixed costs. No one can propose losses of own jobs and those of close friends. However, ZBB requires that all positions in an organization are looked at afresh during a budgeting process. Task consolidation and suspension of fresh recruitment are common though less invasive outcomes of ZBB.
It is easier to apply ZBB to outsourced services such as advertising. Travel budgets are favorites targets of all cost cutting exercises, but ZBB is a potential exception in this respect. One can retain or even enhance any cost proposal that has credible, specific, and probable prospects of gain. Lateral thinking is an important corollary to ZBB. Confrontations with binary choices plaque ZBB.
An excellent way to initiate ZBB thinking is to apply it to yourself, especially if you are in a senior position of influence. One of my former colleagues did this by flying internationally in economy though he was entitled to First Class luxury and privileges. Another voluntarily downgraded the standard of hotel accommodation for himself.
ZBB has useful applications in personal life. There are a number of fixed expenses such as vacations on which we cut back instinctively in lean times. However, searching questions can lead to substantial reductions of energy costs and mundane things like frequent dry cleaning.
The ZBB process is relatively simple, though automation can consume some resources at the outset in large organizations. You have to make a detailed and written justification for each item of expense. All proposals are vetted, preferably by more than one person. No expense finds place in a budget if it is not proposed or if it is rejected.
Write to me if you would like to know more, or apply it in your situation.
What if you were in charge of Gudiwada in coastal Andhra Pradesh. A street scene from this busting town appears below:
I would love to hear from you!
Sunday, September 11, 2011
Psychology in Business and Management
It is not common to spend resources in finding out how people think and why. Advertising types do worry about responses from their targets, but the use of formal psychology is rare. Some Human Resource Development functions do encourage consultants and advisers from the broad area of neuroscience, but this emerging field is not as sound as the established methods of psychology. Enlightened recruiters do use 'shrinks' of various hues to help find the right candidates for important jobs, but this is not repeated in developing the supply chain, or in strategic decisions related to areas other than personnel.
I was introduced to the field by my employers when I was a salesperson. I must say that the ability to type personalities of customers is the most significant skill I learned after leaving the cloisters of Management school. Later, I was exposed to Transaction Analysis and to the Jo Hari window, both of which I have also found to be extremely useful in professional life. Fortunately, it is possible to get a working knowledge of how to apply these concepts through the Internet. Let me know if you would like links to web sites that you can use to start.
Dr Zwicky was a Management Guru in an international corporation that I was privileged to serve. He taught me, with a gaggle of my colleagues, that an organization is made of humans with feelings, emotions, and thinking powers. I used to be very 'left-brain' about such things before I encountered Dr Zwicky. He also, on a personal level, told me to switch from dark and forbidding spectacle frames to gentler and flesh-colored ones. However, that did not work so well, for people still find me 'avoidable'!
I have found psychology just as useful in understanding parts of myself, as in dealing with others. I have also found that many people who may be generally thought of as mentally normal may in fact suffer from disorders and pathologies of their brain functions. Depression, anxiety, and attention deficits are most common in my personal experience. It is nearly insulting to tell someone in India to see a psychiatrist, but I must say that it could often be the most useful advice to dish out and to receive as well!
Psychology is very relevant for business. Since one does not have to invest colossal amounts in it, it is a path that small enterprises and individual professionals can follow with significant benefits all around.
The Internet does have an array of tests that people can take to assess their levels of mental health. Do write to me if you would like to try them.
Here is a picture from a voluntary service for cancer patients and their families:
I was introduced to the field by my employers when I was a salesperson. I must say that the ability to type personalities of customers is the most significant skill I learned after leaving the cloisters of Management school. Later, I was exposed to Transaction Analysis and to the Jo Hari window, both of which I have also found to be extremely useful in professional life. Fortunately, it is possible to get a working knowledge of how to apply these concepts through the Internet. Let me know if you would like links to web sites that you can use to start.
Dr Zwicky was a Management Guru in an international corporation that I was privileged to serve. He taught me, with a gaggle of my colleagues, that an organization is made of humans with feelings, emotions, and thinking powers. I used to be very 'left-brain' about such things before I encountered Dr Zwicky. He also, on a personal level, told me to switch from dark and forbidding spectacle frames to gentler and flesh-colored ones. However, that did not work so well, for people still find me 'avoidable'!
I have found psychology just as useful in understanding parts of myself, as in dealing with others. I have also found that many people who may be generally thought of as mentally normal may in fact suffer from disorders and pathologies of their brain functions. Depression, anxiety, and attention deficits are most common in my personal experience. It is nearly insulting to tell someone in India to see a psychiatrist, but I must say that it could often be the most useful advice to dish out and to receive as well!
Psychology is very relevant for business. Since one does not have to invest colossal amounts in it, it is a path that small enterprises and individual professionals can follow with significant benefits all around.
The Internet does have an array of tests that people can take to assess their levels of mental health. Do write to me if you would like to try them.
Here is a picture from a voluntary service for cancer patients and their families:
The people who use this service most often have no health insurance at all. They have to raise funds to keep their loved ones alive by wandering around philanthropic organizations with the proverbial begging bowl. The service is run by Mr Sanjeev Sharma (facing the camera and in a white shirt). Sanjeev was moved to start voluntary service after he lost a son to cancer. The service breathes new hope in to countless souls, like the two people on the left of the photograph, who come to Sanjeev and his colleagues.
Perhaps you have been in such a situation at some point. How did you respond? Could psychology help in such cases? No money changes hands between a voluntary service and the community it serves, but it is still an extreme manifestation of the contradictions we may face in business life. Participating in voluntary work can be a kind of practical approach to hands-on learning of psychology for business and management.
Sunday, September 4, 2011
Health as a Management Concern
It has been treated conventionally as a personal matter. Most corporations have marginal investments in keeping their employees fit, but they do not usually pay as much attention to it as to other aspects of Human Resource Development.
I regret not having taken better care of my health when I was a young professional. My family and friends occasionally warned me about this. I believed in immersing myself in work, and ignored established principles of preventive health-care.
Here are some outputs of my hindsight:
1. Have a complete medical review every year, and maintain a file on the subject.
2. Avoid business meals, and stick to clean drinking water or fruits during meetings, visits to associates, and discussions.
3. Have breakfast, lunch, and dinner on time. Do not drink socially, and try to eat alone. Stay away from buffets.
4. Make time for regular exercise.
5. Get adequate accident, health, and life insurance policies.
These matters are so basic that I write them at the risk of losing readers! Nevertheless, it will be worthwhile if even one person veers away from the path that I tread during my active days.
We can all agree that health is an invaluable business asset. It is worth leaving no stone unturned to stay fit.
Perhaps we should consider some careers that keep practitioners fit in the course of routine duties!
Sunday, August 28, 2011
Time
All resources have limits. Most of us are most constrained by time. My wife has a solution that a former colleague also used in the past: they do not use watches! This cannot work in an office situation, especially if you are not the owner or head.
Here are a few ideas from my memory of busy days; please add your own:
1. Separate the urgent from the important
2. Delegate
3. Put a time limit for a meeting; do not attend unless all participants agree to read detailed agenda notes in advance; insist on minutes.
4. Sleep in Shava-asana, at least 4 hours after a light meal; you can gain 2 hours over other people every day!
5. Create and update a manual of procedures. ISO certification is the best way I know.
I would love to expand on these points, and to discuss your ideas at length as well.
Now for a case study:
This picture is from Malihabad near Lucknow in Uttar Pradesh. The people on the tractor spray mango trees for a living for orchard owners like the gentleman on the right in a jacket. The spraying season lasts for about 100 days a year. These people have to get diesel and water, maintain the tractor and their equipment, get contracts, sleep, eat, rest, and also spray mango trees. This excludes their family and social responsibilities, to say nothing of ill-health and the uncertainties of life in Uttar Pradesh!
How can these poor youths make better use of their peak season and off-season times?
Your solutions can help all stakeholders in the world of farming.
Here are a few ideas from my memory of busy days; please add your own:
1. Separate the urgent from the important
2. Delegate
3. Put a time limit for a meeting; do not attend unless all participants agree to read detailed agenda notes in advance; insist on minutes.
4. Sleep in Shava-asana, at least 4 hours after a light meal; you can gain 2 hours over other people every day!
5. Create and update a manual of procedures. ISO certification is the best way I know.
I would love to expand on these points, and to discuss your ideas at length as well.
Now for a case study:
This picture is from Malihabad near Lucknow in Uttar Pradesh. The people on the tractor spray mango trees for a living for orchard owners like the gentleman on the right in a jacket. The spraying season lasts for about 100 days a year. These people have to get diesel and water, maintain the tractor and their equipment, get contracts, sleep, eat, rest, and also spray mango trees. This excludes their family and social responsibilities, to say nothing of ill-health and the uncertainties of life in Uttar Pradesh!
How can these poor youths make better use of their peak season and off-season times?
Your solutions can help all stakeholders in the world of farming.
Sunday, August 21, 2011
Communication secrets
It is like marketing. Everyone seems to be an expert, yet very few know the secrets of successful practitioners, and authoritative specialists.
It is not my claim to be exceptionally skilled at speaking or writing. I can point you to sources from which you can learn and improve, if you like. However, it may not be out of place to recount here, some of my most memorable lessons.
Non-verbal communication is significant though subtle. We all know that lawyers, hospital staff, airline crew, and police have dress codes, if not specific uniforms. Indian politicians have subtle conventions in this respect. Shrimati Indira Gandhi always made it a point to wear a handicraft from the area she visited (Prime Ministers were elected in those days, and spent most of their time amidst their votaries).
The impact of color on communication is not widely known, though we may exercise discretion in the matter without thinking about it. Westerners wear black at funerals, whereas Indian Hindus abide by white. Pink is thought to convey friendship and a willingness to compromise through negotiation. Red is a popular symbol symbol for passion. Green represented nature, even before conservation activists abrogated it. It is the same with brown. I personally love all shades of blue.
Young people of today think nothing of wearing jeans to a place of worship. They even appear for dinner at restaurants in shorts and shirts without collars. Inner wear is another, I believe, way of non-verbal communication. There are deep natural roots to such behavior, as any peacock or other bird out to make an impression will tell you.
Hairstyles, visible brand names, chosen transport vehicles, favorite places to dine, shop and vacation, are other ways to communicate with others, without saying a word. I know some people who write about their choices in these matters, to spread the good word far and wide. The welcome propensity of people to travel internationally, is celebrated more as an indicator of national economic progress, rather than of dropping air fares, hotel deals, and evolving services.
Hands and eyes have much to convey though they may have no voices or pens. Italians and some Indians are known to move their limbs more than conservative British and most Japanese (bowing excluded). These strong cultural dimensions must pose challenges for international corporations and the United States. There is little chance of Gaddafi chatting with Cameron, which is not such a bad thing anyway, but what if Berlusconi had to deal with Hina Rabbani?
I do not need to say as much about eyes as I have about other modes of non-verbal communication. Any docile husband such as I dreads the angry glance of a spouse. Dogs are best at interpreting looks though. Is this related to their sensitivity to waves to which humans remain impervious? I have a friend in Saurashtra who can even ask his family to serve tea, without saying anything. It certainly beats my rushing to the kitchen every time a friend drops in. Let me conclude by stating that 'look me in the eye' is a worthy adage. Use it to convey sincerity. Drop it like the proverbial hot potato when you have to lie. Fortunately, video calls are not affordable as yet where I live.
The stuff of this post should not suggest that I consider verbal and written communication to be unimportant. I would love to exchange ideas on how to communicate better in a speech, discussion, on paper, or online.
It is not my claim to be exceptionally skilled at speaking or writing. I can point you to sources from which you can learn and improve, if you like. However, it may not be out of place to recount here, some of my most memorable lessons.
Non-verbal communication is significant though subtle. We all know that lawyers, hospital staff, airline crew, and police have dress codes, if not specific uniforms. Indian politicians have subtle conventions in this respect. Shrimati Indira Gandhi always made it a point to wear a handicraft from the area she visited (Prime Ministers were elected in those days, and spent most of their time amidst their votaries).
The impact of color on communication is not widely known, though we may exercise discretion in the matter without thinking about it. Westerners wear black at funerals, whereas Indian Hindus abide by white. Pink is thought to convey friendship and a willingness to compromise through negotiation. Red is a popular symbol symbol for passion. Green represented nature, even before conservation activists abrogated it. It is the same with brown. I personally love all shades of blue.
Young people of today think nothing of wearing jeans to a place of worship. They even appear for dinner at restaurants in shorts and shirts without collars. Inner wear is another, I believe, way of non-verbal communication. There are deep natural roots to such behavior, as any peacock or other bird out to make an impression will tell you.
Hairstyles, visible brand names, chosen transport vehicles, favorite places to dine, shop and vacation, are other ways to communicate with others, without saying a word. I know some people who write about their choices in these matters, to spread the good word far and wide. The welcome propensity of people to travel internationally, is celebrated more as an indicator of national economic progress, rather than of dropping air fares, hotel deals, and evolving services.
Hands and eyes have much to convey though they may have no voices or pens. Italians and some Indians are known to move their limbs more than conservative British and most Japanese (bowing excluded). These strong cultural dimensions must pose challenges for international corporations and the United States. There is little chance of Gaddafi chatting with Cameron, which is not such a bad thing anyway, but what if Berlusconi had to deal with Hina Rabbani?
I do not need to say as much about eyes as I have about other modes of non-verbal communication. Any docile husband such as I dreads the angry glance of a spouse. Dogs are best at interpreting looks though. Is this related to their sensitivity to waves to which humans remain impervious? I have a friend in Saurashtra who can even ask his family to serve tea, without saying anything. It certainly beats my rushing to the kitchen every time a friend drops in. Let me conclude by stating that 'look me in the eye' is a worthy adage. Use it to convey sincerity. Drop it like the proverbial hot potato when you have to lie. Fortunately, video calls are not affordable as yet where I live.
The stuff of this post should not suggest that I consider verbal and written communication to be unimportant. I would love to exchange ideas on how to communicate better in a speech, discussion, on paper, or online.
I met these people in May 2009, very near the final resting place of Lord Buddha. We had assembled to discuss honeybees and honey. The seated crew came from Punjab to exhort the farmers standing behind them to start rearing honeybees. Most of us are afraid of getting stung. Honeybees can visit gardens in cities, just as they do with crops and farms. Can you think of a presentation that would persuade you to establish hives?
Empathy has much to do with effective communication. It helps to get in to the shoes of targets, and to try and think like them.
Sunday, August 14, 2011
Marketing muscle
One of my business Gurus, Dr Tarun Gupta, loves to say 'you can have a business without any resource or function, but not without a customer!
Marketing is a discipline that most of us think we know, but the reality is generally different!
Marketing is just as important for small business and individuals as for corporations. Top salespeople know that they must sell themselves before any product or service.
Imperfect competition covers up wasteful and erroneous marketing. This is especially true of India where scarce infrastructure and corruption can act as huge entry barriers. International companies have insidious ways of keeping domestic and small players away from vast swathes of markets.
Just as water finds its own level, so it is with market share over the long term. Profitability is another leveling factor since organizations with access to cheap funds can, in the short term, use predatory pricing to keep potential competitors away.
I value your contributions to how to find and retain customers:
1. Segment creatively.
2. Target with laser-sharp focus.
3. Check that you can fill a real market gap sustainably and with profit, before you enter.
4. Never take customers for granted.
5. Emphasize internal and interactive marketing; keep external marketing under-stated.
6. Ensure that each element of the marketing mix is in tune with all the others.
I can expand on the points above if you wish.
Now for an exercise. Here is a picture from the deep interiors of Northern India:
Marketing is a discipline that most of us think we know, but the reality is generally different!
Marketing is just as important for small business and individuals as for corporations. Top salespeople know that they must sell themselves before any product or service.
Imperfect competition covers up wasteful and erroneous marketing. This is especially true of India where scarce infrastructure and corruption can act as huge entry barriers. International companies have insidious ways of keeping domestic and small players away from vast swathes of markets.
Just as water finds its own level, so it is with market share over the long term. Profitability is another leveling factor since organizations with access to cheap funds can, in the short term, use predatory pricing to keep potential competitors away.
I value your contributions to how to find and retain customers:
1. Segment creatively.
2. Target with laser-sharp focus.
3. Check that you can fill a real market gap sustainably and with profit, before you enter.
4. Never take customers for granted.
5. Emphasize internal and interactive marketing; keep external marketing under-stated.
6. Ensure that each element of the marketing mix is in tune with all the others.
I can expand on the points above if you wish.
Now for an exercise. Here is a picture from the deep interiors of Northern India:
One of my colleagues, Kuldeep Singh Khushwaha is first from left. The others are farmers.
How would you go about making and executing a marketing plan to cater to these customers. We can exchange notes with what my colleagues and I have done with farm inputs.
Sunday, August 7, 2011
How to take decisions
Leaders of countries and large corporations have to make difficult choices. Some of them are historic. Most of them affect large numbers of people and families. Dramatic decision-making is not restricted to lofty people. Everyone has to make judgments on a daily basis.
It is useful to have a method to take better decisions. What is a better decision? I can think of the following:
a. Transparency: everyone affected by a decision should understand the process and the reasons behind it.
b. Participation: this is related to transparency. Everyone affected should have an opportunity to contribute to the construction of a decision.
c. Considered trade-offs: life is not perfect! There could be downsides to whatever path is finally chosen. A group or an individual probably has conflicting aims in any case. A good decision is an optimal one: it is based on deliberate priorities.
d. Creativity: decisions based on confrontation are unlikely to work. It is better to think of and to evaluate as many alternatives as possible. It helps if this phase is isolated from bias of participants.
e. Recording: an apparently 'good' decision may not look right in future. There are always lessons from taken decisions. Therefore, the process by which a decision is taken should be recorded in as much detail as possible.
f. Contingency: a decision relates to the future. Therefore, it is based on projections, most of which will not prove to be true. That is why decision-making should dovetail with potential problem analysis. Steps to prevent and to contain serious and probable risks are features of excellent decision-making.
Here is a link for more information on professional decision-making:
The people in the photograph above did not react to the unpleasant news of an interminable flight delay, in the same way. I love the person in the foreground, who is not bothered, and happy to delve in to his newspaper! However, most of us are not so calm. Should we try a train? Will we get something to eat? Can we get a refund? But most of all, what should I do?
What did you do the last time your schedule was seriously upset? How can you prepare for such an eventuality in future?
It is useful to have a method to take better decisions. What is a better decision? I can think of the following:
a. Transparency: everyone affected by a decision should understand the process and the reasons behind it.
b. Participation: this is related to transparency. Everyone affected should have an opportunity to contribute to the construction of a decision.
c. Considered trade-offs: life is not perfect! There could be downsides to whatever path is finally chosen. A group or an individual probably has conflicting aims in any case. A good decision is an optimal one: it is based on deliberate priorities.
d. Creativity: decisions based on confrontation are unlikely to work. It is better to think of and to evaluate as many alternatives as possible. It helps if this phase is isolated from bias of participants.
e. Recording: an apparently 'good' decision may not look right in future. There are always lessons from taken decisions. Therefore, the process by which a decision is taken should be recorded in as much detail as possible.
f. Contingency: a decision relates to the future. Therefore, it is based on projections, most of which will not prove to be true. That is why decision-making should dovetail with potential problem analysis. Steps to prevent and to contain serious and probable risks are features of excellent decision-making.
Here is a link for more information on professional decision-making:
I have practiced decision-making during my career, based on formal training by my employers. I can help you. Do write in the space below and establish contact.
Here is an exercise to end this post:
The people in the photograph above did not react to the unpleasant news of an interminable flight delay, in the same way. I love the person in the foreground, who is not bothered, and happy to delve in to his newspaper! However, most of us are not so calm. Should we try a train? Will we get something to eat? Can we get a refund? But most of all, what should I do?
What did you do the last time your schedule was seriously upset? How can you prepare for such an eventuality in future?
Sunday, July 31, 2011
Ideas
Fresh ideas have always been invaluable. Our ancestors have used them from the time of discovering fire to our contemporary times of the World Wide Web. We love to celebrate the artistic skills of singers, poets, composers, and painters. However, the ability to search inside the human mind for breakthroughs is equally important.
Creative thinking and deep introspection have helped Sages found new philosophies and faiths since time immemorial. Every brain has the potential to reach unknown heights in this regard. Nerve tissue is like muscle: regular practice improves function. A creative thinker can imagine new enterprises. Such mental processes are also helpful when we are in very difficult circumstances with no obvious escape.
Society promotes logical thinking in general. Wild ideas are actively discouraged. This is why the natural ability to think creatively is suppressed in most people. It need not be so. People of all ages and backgrounds can train their minds to foster creative processes. This can be done in an organizational setting, apart from on an individual basis. I learned to think creatively from the books written by Edward de Bono. The best way for you to do this is to visit the following link:
http://www.edwdebono.com/I can help you learn the methods of de Bono, though I have no claims to any special expertise or certification.
You can achieve new levels of success in your business, life, and relationships through creative thinking.
I end this post with an exercise: think of what you wish for your country. What kind of a future would you like for your coming generations? What if you were a leader of your country's government?
I ran an essay competition for children from some villages of Varanasi District in Northern India in 2009. The topic was "India of my dreams". A portion of the winning piece is reproduced below in the original handwriting of its brilliant author.
I can provide links to the full essay, and a translation from Hindi to English.
Compare your ideas with those in the essay above. Ask other people to contribute. I hope that you will discover the power of creative thinking.
I would love to help and to participate.
Sunday, July 24, 2011
Managing Enormous Financial Risks
I am relieved that some soul-searching has started amidst the community of proponents of capitalist free enterprise.
Visit the following link for an exposition of new thinking about the merits of the most established way of developing business:
Visit the following link for an exposition of new thinking about the merits of the most established way of developing business:
My focus at this forum is on small business and individuals. We are strongly influenced by the methods of banks. The stock market system is another powerful dimension that shapes the planning of potential and hopeful entrepreneurs.
Communists and assorted socialists are the only ones who do not celebrate instances of major enterprises being built from borrowed funds. Much of Management methodology revolves around developing persuasive business plans to woo investors. Indeed, this is a significant aim of the Planning process about which I wrote last week.
What happens when projections go awry?
Banks and other lenders cover their lending risks with aplomb. Stock owners can jump ship at any time. The borrower is alone.
I recommend Islamic Banking as a safer alternative to conventional ways of raising money from others to realize your dreams. Study the material at the following link to understand the tenets of a system that shares the risks business development through committed participation in management:
Suppliers, the downstream supply chain, and external customers, are three useful categories of stakeholders, who can help you build an enterprise through Islamic Banking principles.
What if you are unable to service debts that you taken already?
I do not know of anything that can bring on the kind of despair that such a tragedy unfolds. Nevertheless, most situations of this genre are not as hopeless as they may seem. There are no easy answers for the seemingly intractable problems of life-threatening debts, but here are some samples of the bitter medicine for financial reconstruction:
a. Save on recurring expenses
b. Liquidate assets
c. Negotiate realistic rescheduling of interest costs and repayments
d. Pursue every avenue to raise income
e. Seek one-off grants from well-wishers
None of these steps may work adequately or in time, but it is worth trying.
I am willing to help. Write to me in the space below, and I will do my best for you.
Here is a picture of rural youth from Northern India (Padrauna, Uttar Pradesh):
They are neither well-qualified, nor adequately-resourced. They are amazingly gifted artists. How can you help them become celebrities and stars, which they surely deserve?
Sunday, July 17, 2011
Management of the Planning Process
We all plan.
This may be by way of random thoughts, casual conversations with others, or even a rudimentary form of organized thinking.
Planning may be for a business, a family matter, a career, or a new enterprise that we dream to start.
Budgeting is a term related to Planning in Management terminology. Budgeting differs from Planning in three respects:
a. Budgeting is more quantitative, while Planning has large qualitative components.
b. Budgeting is normally for not more than 12 months, while Planning should have a time-frame of 3-10 years. Some large enterprises plan for two decades ahead.
c. Budgeting is a corollary to Long Range Planning. Some of us may rest content with informal monthly budgets for personal and household expenditure, but it will help to build a secure future if short-term budgets are derived from a longer-term plan.
Management has comprehensive tools for effective Planning and Budgeting. I learned some of this at the Indian Institute of Management, Ahmedabad. I have also served in the Planning and Budgeting function of the erstwhile Sandoz India Limited, which was an affiliate of an international, research based corporation in the Life Sciences and Industrial Chemicals sector. I continue to be an avid reader of the subject on the World Wide Web.
I would like to help anyone who is interested to make the transition from amateur or casual planning to a structured process, with outputs that can be put to good use. I should warn that Planning and Budgeting are dynamic processes. Plans must be reviewed every 12 months, and budgets not less often than once a quarter.
Let me give you a trailer of the full Planning and Budgeting process.
The first step is to make an Environment Scan. You can think of this as a kind of astrology! Why is such a strange step required?
The reason is that Planning is all about the future. Who needs a detailed plan for what to do today, or even tomorrow. Doubts arise as we delve further and further in to the future. What will the world look like 10 years from today. Politicians may paint rosy pictures, but can we count on them?
Professional planners consult domain experts in order to piece together images of the distant future. Technology drives many of the important changes in our lives, hence it is a common practice to consult leading scientists and specialists from various fields. One of the common methods for an Environment Scan is to use the Delphi Technique. We can do this together, or you can use the article at the link below (accessed July 2011):
www.unido.org/fileadmin/import/16959_DelphiMethod.pdf
The Environment Scan will provide leads to the following:
1. Disruptive changes that will affect our lives and business.
2. New opportunities for us to live better, and to earn more; also to advance our careers.
3. Threats that may emerge to our security, well-being, and wealth generation.
4. Possible challenges that our children may have to face.
5. Large opportunities for professions and markets that exist today, but which could decline tomorrow.
Tobacco companies of the 19th and early 20th century have diversified in to foods and hospitality in order to deal with the opposition to their original business.
Manufacturers of typewriters and related office equipment have jumped on to the electronic bandwagon, in order to continue to generate profits, and to grow in a new world.
Skin and Venereal Disease has never been the most glamorous arm of the medical profession. However, skin specialists and cosmetic experts, as some of them are now christened, are more respectable and sought after in elite circles, than in the past.
Please consider the following aspects:
i Small business and individuals, especially young ones, need Environment Scans just as much, perhaps more, than large corporations.
ii. There are long time gaps between a new technology or development coming to retail shelves, and the original idea generation.
iii. It pays to be a leader or at least an early entrant in an emerging field, rather than a laggard, or a simple follower.
I hope that I have persuaded you to take the first step in the Planning and Budgeting process. I would love to hear from you in any case: just write in the space below.
I sign off with a picture that you can use to practice an Environment Scan:
This is a farm family from the Saharanpur District of Uttar Pradesh. Everyone works on a small patch of land, and they grow a variety of vegetables around the year. They have reasonably assured irrigation, and the lucrative markets of Delhi and Chandigarh are nearby.
What do you think is the best course of action for this family to build its future?
What can the parents do for the children to have options for their careers?
Should they remain in agriculture?
An Environment Scan is just a first step in Planning and Budgeting. There is plenty to follow and to gain. Let me know if you would like me to continue.
This may be by way of random thoughts, casual conversations with others, or even a rudimentary form of organized thinking.
Planning may be for a business, a family matter, a career, or a new enterprise that we dream to start.
Budgeting is a term related to Planning in Management terminology. Budgeting differs from Planning in three respects:
a. Budgeting is more quantitative, while Planning has large qualitative components.
b. Budgeting is normally for not more than 12 months, while Planning should have a time-frame of 3-10 years. Some large enterprises plan for two decades ahead.
c. Budgeting is a corollary to Long Range Planning. Some of us may rest content with informal monthly budgets for personal and household expenditure, but it will help to build a secure future if short-term budgets are derived from a longer-term plan.
Management has comprehensive tools for effective Planning and Budgeting. I learned some of this at the Indian Institute of Management, Ahmedabad. I have also served in the Planning and Budgeting function of the erstwhile Sandoz India Limited, which was an affiliate of an international, research based corporation in the Life Sciences and Industrial Chemicals sector. I continue to be an avid reader of the subject on the World Wide Web.
I would like to help anyone who is interested to make the transition from amateur or casual planning to a structured process, with outputs that can be put to good use. I should warn that Planning and Budgeting are dynamic processes. Plans must be reviewed every 12 months, and budgets not less often than once a quarter.
Let me give you a trailer of the full Planning and Budgeting process.
The first step is to make an Environment Scan. You can think of this as a kind of astrology! Why is such a strange step required?
The reason is that Planning is all about the future. Who needs a detailed plan for what to do today, or even tomorrow. Doubts arise as we delve further and further in to the future. What will the world look like 10 years from today. Politicians may paint rosy pictures, but can we count on them?
Professional planners consult domain experts in order to piece together images of the distant future. Technology drives many of the important changes in our lives, hence it is a common practice to consult leading scientists and specialists from various fields. One of the common methods for an Environment Scan is to use the Delphi Technique. We can do this together, or you can use the article at the link below (accessed July 2011):
www.unido.org/fileadmin/import/16959_DelphiMethod.pdf
The Environment Scan will provide leads to the following:
1. Disruptive changes that will affect our lives and business.
2. New opportunities for us to live better, and to earn more; also to advance our careers.
3. Threats that may emerge to our security, well-being, and wealth generation.
4. Possible challenges that our children may have to face.
5. Large opportunities for professions and markets that exist today, but which could decline tomorrow.
Tobacco companies of the 19th and early 20th century have diversified in to foods and hospitality in order to deal with the opposition to their original business.
Manufacturers of typewriters and related office equipment have jumped on to the electronic bandwagon, in order to continue to generate profits, and to grow in a new world.
Skin and Venereal Disease has never been the most glamorous arm of the medical profession. However, skin specialists and cosmetic experts, as some of them are now christened, are more respectable and sought after in elite circles, than in the past.
Please consider the following aspects:
i Small business and individuals, especially young ones, need Environment Scans just as much, perhaps more, than large corporations.
ii. There are long time gaps between a new technology or development coming to retail shelves, and the original idea generation.
iii. It pays to be a leader or at least an early entrant in an emerging field, rather than a laggard, or a simple follower.
I hope that I have persuaded you to take the first step in the Planning and Budgeting process. I would love to hear from you in any case: just write in the space below.
I sign off with a picture that you can use to practice an Environment Scan:
This is a farm family from the Saharanpur District of Uttar Pradesh. Everyone works on a small patch of land, and they grow a variety of vegetables around the year. They have reasonably assured irrigation, and the lucrative markets of Delhi and Chandigarh are nearby.
What do you think is the best course of action for this family to build its future?
What can the parents do for the children to have options for their careers?
Should they remain in agriculture?
An Environment Scan is just a first step in Planning and Budgeting. There is plenty to follow and to gain. Let me know if you would like me to continue.
Sunday, July 10, 2011
Why Risk Management Matters
Risk Management is not taught very early in a curriculum. Some schools do not have this subject in the syllabus.
I suppose it is human tendency to hope for the best!
There are two common entry points for the world of Risk Management.
One is through corporate solutions for probable risks. Various forms of insurance are common examples of this route.
The other is a personal encounter with a disaster. Such an event forces us to think of improbable but serious risks. Earthquakes, fires, sudden death of a breadwinner, and industrial accidents, are examples of risks that fortunately occur rarely, but their consequences are shattering.
Each of us has to be prepared for the worst.
Some risks are both improbable and not-serious: unexpected rain is an example. We need not plan in detail for such minor interruptions.
Risk analysis is a useful first step in Risk Management. Everyone concerned should help prepare a list of all possible risks in a given situation. We can then divide the list in to likely, unlikely, and serious risks. We can eliminate frivolous risks by consensus. This paves the way for concerted plans on how to deal with significant risks. These plans can then be translated in to action plans with specific responsibilities that are rehearsed regularly. Large factories that make hazardous goods make such elaborate plans, but each of us can benefit from the process.
Here is an exercise: list all the risks that you can from the image below:
You are welcome to contribute your own picture or a description of a situation that concerns you, and we can learn Risk Management together from your contribution.
I suppose it is human tendency to hope for the best!
There are two common entry points for the world of Risk Management.
One is through corporate solutions for probable risks. Various forms of insurance are common examples of this route.
The other is a personal encounter with a disaster. Such an event forces us to think of improbable but serious risks. Earthquakes, fires, sudden death of a breadwinner, and industrial accidents, are examples of risks that fortunately occur rarely, but their consequences are shattering.
Each of us has to be prepared for the worst.
Some risks are both improbable and not-serious: unexpected rain is an example. We need not plan in detail for such minor interruptions.
Risk analysis is a useful first step in Risk Management. Everyone concerned should help prepare a list of all possible risks in a given situation. We can then divide the list in to likely, unlikely, and serious risks. We can eliminate frivolous risks by consensus. This paves the way for concerted plans on how to deal with significant risks. These plans can then be translated in to action plans with specific responsibilities that are rehearsed regularly. Large factories that make hazardous goods make such elaborate plans, but each of us can benefit from the process.
Here is an exercise: list all the risks that you can from the image below:
You are welcome to contribute your own picture or a description of a situation that concerns you, and we can learn Risk Management together from your contribution.
Live safe, and safeguard your enterprise, colleagues, associates, friends, and family.
Sunday, July 3, 2011
Sacred Start
The Rath Jatra (Chariot Ceremony) of the Hindu Deities at Puri in India, takes place today (July 03rd 2011). The date is not the same each year, as Hindus follow a lunar calendar.
Though I am a practicing Hindu, I worship Jesus, the Buddha, and respect all religions. Therefore, please do not be repelled by my choosing this auspicious day in the life of a Hindu, to start a new web log, if you are an agnostic, or belong to another faith.
You will find an update every Sunday, and a prompt response to every contribution. My Mission is to apply the principles and processes of Management to small business, and to individuals from all walks of life. I have a formal qualification in the subject, and have practiced it for some 4 decades.
It is never too late to start learning about Management. Even the best exponent has opportunities to improve, extend, and update skills and applications. The Internet facilitates learning about Management, and offers much content entirely free of cost. Each of us can apply such learning to improve personal performance, quality of life, and to build a successful enterprise.
I claim no last word on the subject. Do contribute your thoughts and experiences.
Management has fostered the Case Method of study. This makes learning fun, because we can derive principles by thinking of specific instances. There is a picture from Lucknow at the end of this post. The young person makes a living by sticking rubber panels to cars of the rich, so that the paint is not damaged by the skirmishes that are so common on city streets in places such as Lucknow.
Can Management help him secure his future? I would love to exchange thoughts with you. Just write in the space below.
I will also be privileged to help with specific cases that concern you.
Though I am a practicing Hindu, I worship Jesus, the Buddha, and respect all religions. Therefore, please do not be repelled by my choosing this auspicious day in the life of a Hindu, to start a new web log, if you are an agnostic, or belong to another faith.
You will find an update every Sunday, and a prompt response to every contribution. My Mission is to apply the principles and processes of Management to small business, and to individuals from all walks of life. I have a formal qualification in the subject, and have practiced it for some 4 decades.
It is never too late to start learning about Management. Even the best exponent has opportunities to improve, extend, and update skills and applications. The Internet facilitates learning about Management, and offers much content entirely free of cost. Each of us can apply such learning to improve personal performance, quality of life, and to build a successful enterprise.
I claim no last word on the subject. Do contribute your thoughts and experiences.
Management has fostered the Case Method of study. This makes learning fun, because we can derive principles by thinking of specific instances. There is a picture from Lucknow at the end of this post. The young person makes a living by sticking rubber panels to cars of the rich, so that the paint is not damaged by the skirmishes that are so common on city streets in places such as Lucknow.
Can Management help him secure his future? I would love to exchange thoughts with you. Just write in the space below.
I will also be privileged to help with specific cases that concern you.
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