From fortune hunting to institution building!

Happy is the Founder & CEO of 

NEMCO - New Era Manufacturing Company.

Happy had to drop out of school to start a business of his own. 

Unlike most of us, he could not go to college, graduate and take up a comfortable and steady paying job. 

He had to learn to survive the hard way. 

Everyday was an adventure in survival and he learned some very difficult lessons that were served up to him by  the school of hard knocks. 

Everyday was an examination he had to pass or face the prospect of failing with merciless consistency.

He grew up admiring the several companies that started around the same time as he did, but went on from being an ordinary, small and medium enterprise to becoming big and extraordinary. 

He wondered to himself, ‘After all, we all of us are in it to make money and hunt for our fortunes. All of us are braving the same battles of daily shortages, perpetual scarcity, endless queues for basic amenities, limited allowances for capital investment at painfully high rates of interest that discouraged enterprise.’

To cap it all, there was the  plethora of quotas, permits and licenses that were monopolized by the wealthy few and sold off at a premium to the underprivileged many. 

Curiously, while many fell by the wayside, a few not only managed to survive but went on to grow and become enviably everlasting. Could he also build NEMCO into an everlasting company?

Happy knew that great leaders were doing something differently to make their companies everlasting. 

When he asked his friends around, nobody would tell him. 

May be they did not know or want to find out.

Happy was undeterred. 

He simply had to know.

So, he resolved to find it out for himself. 

After all, ‘If they could, why can't he.’ he wondered to himself.

He wanted to crack the mystery and the magic underlying these everlasting entities.

Are we ready to graduate from being a mere fortune hunter to becoming an institution builder?  

DISCOVER THE EVERLASTING MANTRA?

Happy’s dilemma.

How to put the fun back into managing his business? 

Until sometime back, business was sheer fun for Happy. 

Not so now.

And therein lay the problem. 

Quite like owning a BMW, his misery or happiness originated from the choices he made.  He realized that unless he understood the consequences of his choices, he may never be able to make it worthwhile. 

First, he discovered that there was a dilemma to be dealt with: 

If he were to assume his business to be like the BMW he owned, it was no fun owning an expensive possession that gave him no joy. It simply made no sense owning something for the sake of owning and losing whatever we had. So,one choice would be to  suffer it and live with it. He could hold on to it! 

Miserably! 

On the other hand, he wondered it it was wise to continue when misery was the only guarantee. 

Was he so powerless that he could not find a way out of a boring routine? 

Second, he chose to think differently.

‘Imagine. What if I could break free from that dilemma? What if I could restore the pride of ownership without losing the joy of enterprise?’ he wondered to himself!

Is it possible to have the best of both worlds? 

Yes it is, indeed!

Business Twenty20 helped Happy make that mind shift. 

It can help us think differently and productively.

It may be challenging at first but can get seductively simpler and more enjoyable if we persist with the tough minded thinking it calls for. It encourages everyone, more particularly the owners of the business, to explore their options with an altered  perspective. 

From an either-or perspective, to a both-and perspective.  

Why should we be so concerned? 

Because it is our life and we owe it all to ourselves.

Because we are in competition with tough minded stakeholders. 

If we don’t think tough, we will merely work to our own disadvantage and help our competitors choke us out of our own existence. Our mindset dictates not only our own destiny but the fortunes of all those who look up to us to lead them. 

They trust us. 

The privilege of leading them comes with an obligation to out-think ourselves and vindicate the faith they have reposed in us.

Business Twenty20 is an illustrated business novel. 

But the subject is no fiction. 

It is real and, concerns all of us.

The novel is based on day to day dilemmas and offers insights on how to resolve them gainfully. 

THE OWNER’S MINDSET DICTATES THE FORTUNES OF THE ENTERPRISE! 

Who may the owners be? 

Founder business owners, Solopreneures, Profit center managers and country heads and Subject Matter Experts who offer techno-managerial expertise or provide professional advice to their clients. 

We may think we are not the owners. 

Think again! 

We all are, and it concerns all of us.

Let Harpreet ‘Happy’ Singh guide us through the journey of life and light up a joyous future!

READY TO DISCOVER THE EVERLASTING MANTRA?

Get ready to watch this space tomorrow!

Sharpen your business acumen

Why do it, if it is not for fun?

Imagine ourselves on our way to work, riding a nice BMW.

Everyone looks at us with envy while we try to hide our misery. 

Why should we feel so miserable inside?

Because, the traffic is thick and our journey is a series of stop-start-stop-start. 

We own the car no doubt, but everybody outside of us, controls the traffic.

We are on a journey we don’t enjoy performing any more! 

It is not what the highway cruise we dreamt about when we took delivery at the show room!

What plays on our minds at such moments?

That is the MIND GAME.

The game that goes on all the time in our minds.

Unless we rule the game in our minds, we will be thoughtlessly persistent and short change our own selves, at the cost of our own self respect.

Welcome to Business Twenty 20.

On the one hand, we cannot let go of the BMW. Out goes our asset, taking our self pride along with it.

Yet, we can’t suffer the BMW any longer because we feel cheated, unable to have the fun we were promised.

What to do? 

Would we continue doing anything if it is no longer fun? 

Probably not.

Still, how many of us continue to play on unwillingly, even when we feel bored, depressed and denied our legitimate dues.

Harpreet HAPPY Singh, the hero and the CEO of New Era Manufacturing Company was exactly in such a predicament.

He wondered to himself, "Why do I do and continue to do the things  that leave me powerless to do anything about it. 

Unable to think of a better way, he resigned himself to fate. 

He felt stuck. Trapped. Exploited and vulnerable.

He realized very soon that that was no way to live. 

He had always known himself to be capable of innovating himself under the extremes of pressure, to out-think his reality and reinvent himself.

Prisoners of war, illegal immigrants, jail breakers, terminally ill patients and revolutionaries managed to successfully break out of their mind barriers and broke free into a brave and bright new world!

If only he could think like them, he wondered, he could change the prospects of his bleak future.

It is my pleasure to welcome the readers of Thought Catalyst to a sneak preview into my maiden effort to publish a book on transformational thinking for breakthrough management!

BUSINESS TWENTY20: How to build an Everlasting Company

Happy is still celebrating BAISHAKI with his friends.

Happy will be delighted to connect with you as he returns to work tomorrow!

Karthik Vengatesan's: Non Value Creation - The Flipkart Way

Karthik Vengatesan's: Non Value Creation - The Flipkart Way: While I was introduced to Lean Concepts at Cognizant, there were three important terms that was explained. Value added activities - those a...



Karthik, just to supplement your wonderful observations on FLIP KART, here are the five ways to compute the arithmetic of Value creation.

1. Value addition - Employment - Input + value add= Value added output

2. Value erosion - Investment in any hardware that depreciates with time - Like a car : Real time resale value always less than real time purchase value

3. Value division - Tragedy of commons- Ancestral Property gets divided and subdivided with every generation until the value of the parts gets infinitely smaller than the value of the whole - Same applies to politics and brand equity.

4. Value multiplication - Customer loyalty that grows the intrinsic value organically with time and

5. Value exponentiation - Education -pay once and enjoy accelerated rental value for life.



I like the design of your website and would like to upgrade my blogpost to yourstandards from you when we meet today.

Please bring your laptop.



Congratulations again.



Shekar

Enjoy the freedom to do what you please - 3

The frog on the boil

By hindsight, all of us can justifiably claim to be ‘wiser.’

In the midst of a crisis, there will always be some who will claim that they had seen it coming.

Be that as it may, what stopped them from raising the alarm earlier on?

Welcome to the syndrome of the ‘Frog on the boil.’

During the 2008 sub prime lending crisis in the US, everyone expected the ‘home loan’ bubble to burst any time but continued to disregard the forebodings. They persisted with taking ever larger exposures thinking they will be the exception to the rule. Unable to size up the true dimensions of a reality, a few played excessively safe or while the majority were reckless in their choice. When the bubble did burst eventually, it spared no one.

Quite like the frog on the boil, some of us may be caught up in a maze.

For a while, we can blame the fate or the circumstances. We can hope for things to get better.

Eventually, we are compelled to realize the futility of holding on to options and choices that may have lost their relevance.

When is patience not a good virtue?

We reach a point of inflection.

A point of no return.

Where lies the secret to detecting that point of inflection?

It lies in the power to make a connection with the inner self.

At that moment, we let go the meaningless props we had mistaken to be our source of support.

We realize how much of an impediment they have become.

We restore our sense of ‘balance’ by connecting with the anchors within.

We learn to weather the storm by our own devices.

For Ram the internal anchor lay in his mastery of the science of numbers.

Dharam realized the significance of robust health above all else. He let go of the idea for IPO.

Suket, summoned the moral courage to do what had to be done, as always.  continuance in the job did not really matter any longer.

If that were so simple, why does it take a crisis to precipitate such a frame of mind?

The catalyst for fresh thinking lies in feeding the mind with challenges it needs to learn afresh to solve.

Intriguing?

Not really.

Research on the plight of prisoners of war, illegal immigrants, jail birds and stowaways show that they never surrender to the challenges thrown at them.

Instead they connect with the anchors of freedom, justice, equality or what ever value they hold dear to themselves and launch them afresh.

They do not wait for advice.

If any thing they defy the establishment, embrace the adversity and deal with reality.

Are you surrounded by insurmountable walls around you?

It is time to break free.

Enjoy the freedom to do whatever you please, responsibly - 2

Where lies your passion?

During my early childhood, it was always the youngsters who sought advice and, as a rule, the elders never failed them. Sure enough, the elders ruled and the youngsters obeyed them faithfully. For a long time, I equated wisdom with age and assumed that someday, I would also be considered senior enough to be consulted. 

Alas! By the time I aged enough in my seniority to offer some advice, the rules had changed.

No longer was any advice taken or accepted implicitly.

Often, the seekers of advice argued vehemently as to why the piece of advice I offered at their behest, was not the right one or the only one.

What was even more amusing was that they expressed a measure of disappointment with my inability to be creative or empathetic towards their predicament. 

Crestfallen, to save face, I resisted any temptation to tender advice no matter how sincere the invitation to do so.

Interestingly, a few months down the road, I discovered that they looked relaxed and enthusiastic. 

I was curious to know how they had resolved their challenge. Although their backgrounds and experiences were dissimilar, there was a near unanimity in their evolution. All of them had found the answers, entirely out of their own efforts, and from within. 

Ravi the wizard with numbers, found a third alternative that helped him make the best of both worlds. He set up a query desk in Chennai, for customers the world over to post their problems on that algorithms that run the backbone of the insurance industry. It was painful at start but leaves him highly energized today. 

He loved puzzles and challenges. 

That had always been his passion. 

He had managed to convert his passion into his profession now. 

Dharam discovered that the stock market was a beast with a voracious appetite. 

In trying to appease the market, he did not want to lose the joy of making steady and definite progress through internally generated funds. He could resist the urge for celebrity status and free cash that an IPO brought with it; he was also aware of the price it would extract in terms of his youth and creativity. 

Suket did the unthinkable. 

He identified several time tested ‘people practices’ from the Armed forces that the industry was unwilling to take note of. He met each of the board members individually. 

In absolute privacy, he appraised them of the need for expertise and maturity in addressing the challenges faced by the company. He cautioned them on the ‘low staying power’ of younger executives who may not have the ‘battle scars’ he had picked up along the way. Instead of buckling down under pressure, he had vindicated his value to his employers without closing the doors on fresh talent permanently. 

When the student is ready, the teacher, they say, will appear!

In each of the cases above, the teacher seemed to have appeared from within.

I was curious to know how they had managed to invoke the ‘teacher’ resident within themselves.   

Their determination to stay true to their passion, they said, had made all the difference.

How then, did they manage to discover their true calling or passion in life, I wondered.

What do you think?

Thought catalyst: Enjoy the freedom to do whatever you please, responsibly!

Thought catalyst: Enjoy the freedom to do whatever you please, responsibly!

Enjoy the freedom to do whatever you please, responsibly!

Fun work way

I grew up through my adolescent years very much envious of the grown ups. 

While I had to suffer through parental controls at home, peer pressures at the play ground and the demands of the teachers at school, the elders seemed to have all the fun. 

They had no one to approve of what they wore, ate or did. 

I could not wait to grow up faster. 

Now that I am a grown up entity myself, the idea of fun continues to elude most of us.

Strangely, I find that the children have all the fun today while it is the elders that lament most about not having the freedom to do what they enjoy doing most. 

Ravi has a brilliant mind and is a wizard with numbers. 

At 28 , he is not sure whether he is better off starting a new venture in India or accepting a six figure salary with a US based insurance company that wants him to set up an actuarial practice. 

He finds both of them equally attractive and yet, equally risky. 

He has been postponing the inevitable for over 9 months now. 

Reason: He is not sure which of the two will be the right decision. 

Dharam runs a successful BPO. 

He has built up the company in ten short years into a 100 Million $ enterprise. 

He is a workaholic and keen to go for a Public issue and join the half a Billion $ league by 2015. 

He drove himself so hard that he has been through two by pass surgeries before he turned 35 last December. His family and doctors want him to slow down. 

Instead, his venture capital appointed partners want him to speed up. 

Suddenly all the fun has gone out and no one else wants to carry the ball. 

He feels all alone and is shy to admit his state of helplessness.

He is too overwhelmed to decide what he should do with himself for the rest of his life. 

Suket was a brilliant flight instructor with the Indian Air Force. 

He coveted a PVSM from the President of India before his retirement in 2010. 

Upon invitation from his schoolmate, he accepted the job as a HR head for the company. 

Things seemed to go well until last Christmas.

His friends company was bought over by a larger firm. 

The management has changed hands. 

He knows that the new management team is actively on the look out for a younger HR Head but have not told him about it yet. Suket needs the job because he cannot maintain his lifestyle on the pension from the Armed Forces. He is too embarrassed to admit his dependence on a steady job in the public.

More importantly, he is totally unused to Monster. com and Naukri.com.

How does one make a resume, float it on the net and face the interviews conducted by people less than half his age? He is also afraid of upsetting his wife who has just about managed to get comfortable with Civilian life. 

Suket wonders if he can hope to put the fun back into his life. 

In the strictest of confidence they ask: ‘Please, give me some candid advice.’

Can you help them?

Curtains

A garden does not become great, merely by sprinkling it with enriched seeds and left to be taken care of by itself. It is great gardeners that groom them into a beautiful feast for the eyes and a timeless treasure to behold, for the future generations to savor.

Likewise, without the inspiration, nurturance and the guidance of the board members, it is almost impossible to build great corporations. I was privileged to share twenty-five illuminating instances from my work life, that highlighted the insightful contributions the board members made to their shareholders and employees.

From some of the queries, criticisms and generous comments from readers like you, I drew the inspiration to carry on with my notes. I do hope, the contribution here, however humble it be, was found useful. As I draw this series to a close, I do hope you found parallels in your own organizations too. I do wish that these ideas stimulate your future as much as they did to me.I wish to thank you for your esteemed patronage.

I conclude this series with the fond hope that these columns would continue to be a source of inspiration and wealth aggregation for the times to come.

What qualities to look for in the next Chairman to be ?

What qualities to look for in the next Chairman to be ?

The 35 year old company had gown into several divisions and exported the products to over 98 countries. The current Chairman was nearing 70 and the board wanted a relatively younger team at the top to head the business. With Gen Y constituting the bulk of their consumers, now, it was important for the company to think young.

What should be the qualification criteria for the new management team to be ?

The company invited a seasoned expert from the field of management to address the potential contenders who numbered over 70. What should they look for in the 70 people to decide who to hand over the reins of the company to?

“ If you have a visionary amongst you, then this company will be most safe," began Dr. Patel. He had served on the boards of several Fortune 500 companies and has been an advisor to many a CEO on the art of grooming their successors. “ Let us identify the visionary amongst your aspirants and ascertain the traits do they demonstrate for leadership,” said he.

Foresight: First, do they see the future ahead of the others? Akio Morita, of Sony created the phenomenon of Walkman that revolutionized the Music industry. Eiji Toyoda of Toyota created the luxury of a Mercedes Benz at half the price - Lexus went on to become a legend. Before laying down the office of the Chairman, Soichiro Honda wanted the world’s cleanest car, HONDA CIVIC to be created. Jeff Immelt at GE believed in reducing the energy demanded by airplanes, ships, railroad engines and power plants to 40% what they were consuming then. The consulting house of McKinsey believed in working like a single large family of business they called ‘One firm firm’ with knowledge as being the only differentiator of seniority in the company. The head of Royal Dutch Shell, Arie De Guys, believed in creating everlasting corporation that invented the way it learnt daily.

In India we have Kalaam, the missile man, Kurien, the father of White (milk) revolution, Thomas Thomas, who invented the use of non edible oils to make soap so that millions of kitchens could get an uninterrupted supply of cooking oils. MS Swaminathan helped self sufficiency in food by revolutionizing the way rice is cultivated . Quietly, Rajendra Pawar promoted computer literacy through NIIT and Janak Mehta introduced the TQM Revolution through CII way back in 1988.

All of them had the gift of seeing 20 years and beyond. Does your top team have the power of prophesy, the ability to look beyond? Does your CEO possess it?

Vision: Second, do they believe in something as a core message that needed to be reflected uniquely in every aspect of the offerings of the company, like the corporate signature. For Sony, it was the respect for nature (Mottainai- in Japanese)and miniaturization; everything had to get personalized and pocket sized! For Toyota their ability to grow the pie of the car market by making them cheaper and better was more important than fighting for market share. Environmental friendliness was the theme for Honda. Energy saving in every aspect of life is GE’s motto. Superior thinking was the motto for McKinsey. Corporate longevity was the theme for all of them; they continue to be in the top of Fortune 500 even today and have become timeless legacies for their investors.

The scientific temper promoted by Kalaam is as timeless as the success of cooperative movement among milk producers for Kurien. Indigenous R&D for Thomas was as significant as putting the nation through computer literacy and modern methods of production and management for Pawar and Mehta respectively.

All of them, not only dreamt big but were far ahead of their times. They placed an abiding faith in the power of India to renew itself and gave it one key ingredient to success; they sowed the seed and tended the garden for it to flower and flourish for generations thereafter. Does your CEO have such a message?

Staying power: Whenever any new idea comes, do people like it? No way. There is always entrenched resistance. Yet these people had the singular ability to appeal to the imagination and ignited the passions of the entire generation; inspired them to take on the hardship of change. They took on their successes and failures with the same level of ease as they endeared themselves to their friends and treated their enemies with respect. Charming their way through a crisis that was legitimate, they engaged the mind and spirit of the people to respond to a call to action that was very significant. Does your CEO to be demonstrate such a staying power?

I think as a senior team you will be failing your shareholders if you do not clearly communicate what you are looking for in the next CEO. So communicate first and get all the 70 of them contest of this position openly and fairly. Let each one of them paint a scenario for the future that we are would love to envision and hear about. Let them identify the message that will take us there. May they also demonstrate their tolerance for those who are unable to appreciate the future, by demonstrating the will to carry them along, without denigrating or dispensing with them.

If we found such a person, the current team would have discharged their debt of gratitude to the trust placed on them by the shareholders. Thank you.”

Dr,. Patel sat down having satisfactorily seeded his message for one more time in his illustrious life.

Shekarsan

Revenue scoping policy

Revenue scoping policy

The press were waiting for the press note on the annual business performance to be released. The release of the press note was delayed because the board had not yet approved of it. The board could not approve of it because the auditors had yet to sign off the balance sheet. The auditors will not sign off the balance sheet because the CFO was still to provide satisfactory clarifications they had sought earlier from the company. Whereas the press was to have got the note at 1100 hrs in the morning, they got it at 6 p.m. after a harrowing wait of over seven hours.

Ravi Ratnakar, Director appointed by the institutional investors was visibly irritated at having to cancel his flight for the night and go the next day morning . He pulled the CEO aside and told him that financial results must be published to him by the 3rd of every Quarter ending month. A delay of 20 days and doing it on the morning of the board meeting was simply not acceptable. The CEO, as if he had nothing to do in the matter, pointed to the CFO and asked the latter to get his act together.

The CEO and the CFO both knew what the problem was but were unwilling to face up to it. They both blamed it on the failure of the quality of the accounting Software that made the consolidation of quarterly accounts very difficult. Ravi Ratnakar was not prepared to be taken so lightly. Upon his return home, he called up the CEO and told him that an auditor friend of his will help them in the matter. Helplessly, the CEO was forced to accept the offer without protest.

Next quarterly board meeting passed off peacefully without any problem. The auditor had very little to do because the CFO, keen to avoid getting exposed, had already managed to address all the problems. How did he mange it this time?

Delay in release of invoices on customers: Usually, in order to show good revenues, the books were kept open for a week after the month got over. Consequently, the generation of invoices too were postponed by as much, flowing into the next quarter as receivables. The is time, it was closed promptly on the last working day. This, quite obviously improved the working capital situation but went down poorly with the customers who were denied the extra time to enjoy free credit.

Doubtful debts not recognized: The collections team likewise, was often given time well past the start of the next quarter to show that the status of accounts receivables were in very good shape. That once again was not allowed owing to the timely closure of the bank books. The amounts outstanding beyond 180 days were clearly highlighted as doubtful debts; each one had a clear status note explaining whether they will become delinquent and if they did, how they will be dealt with.

Delayed release of credit notes: Errors in invoicing and the issue of credit notes for goods returned back unsold was often kept pending. While it looked good artificially in the short term, by the end of the year it reflected poorly on the results of the last quarter. This too was remedied forthwith.

Adjustment of advances: Although the issue of travel advance and timely settlement was a mandated policy guideline, employees had the habit of submitting travel expense statements very late. With over 40 % of the employees traveling for as much as 100 days overseas, the amount shown under loans and advances was inordinately high. Worse yet was that much of it remained under suspense until the true levels of expenses became known much later on. In most cases, the employees had spent in excess of the amounts advanced, reflecting poorly on the cost of operations.

Surprise expenses incurred without prior approval: Although there was a strict guideline on discretionary spending towards unbudgeted expenses, every month, a substantial amount was incurred and justified post facto as a fait accompli. There was very little for the CFO to do except to accept the expense under protest.

Posting delays: All these factors resulted in inordinate delays that allowed very little time for the MIS department to post the vouchers into the system. When the automated MIS system released the provisional reports, there were obvious and glaring omissions and errors that required correction and reprocessing before the accounts could be clearly squared off.

The results of the next quarter were poor. But Ravi Ratnakar knew why. He was happy that his timely threat had resulted in a one time poor show; since all the accumulated problems of bookkeeping disciplines had been addressed, he was not unduly worried. Now that people had owned up to the bad news, he was confident that they will act more responsibly in the future.

Shekarsan

The hard side of addressing the soft issues

The hard task of addressing the soft issues

Everybody in the board loved Chandrasekhar. He carried himself with grace and was deeply human in the way he came across to people. He seemed unhurried despite his busy schedule and was always approachable. The CEO Ravichandran had assembled a team of great of experts who were quick to address technical challenges and redress customer complaints with remarkable ease. However, the workplace was very machine like and lacked any energy or enthusiasm. Where could he be going wrong? He valued the difficulty of keeping people motivated and was anxious not to allow the enthusiasm of the youthfully capable team to come down for any reason.

Chandrasehkar listened for a while.

He asked the CEO if he could be permitted to walk about all alone, unescorted by the senior managers, across the shop floor and the offices of the middle management? The CEO saw no reason to object and let it happen.

Chandrasekhar went about in his natural style shaking hands, meeting a cross section of the people enquiring them about their welfare and work. He apologized for dropping unannounced and took permission from people if it was all right for him to talk while they worked. In some cases, he waited until the operators and staff finished their work and got free to talk to them. He graciously accepted the insipid tea and soft biscuits that were offered to him and demonstrated enjoying it with great relish. After touring the workplace for almost three hours, he returned to the CEO’s room for lunch.

The CEO expected Chndrasekhar to say something about the mission he had undertaken in the morning but the discussion seemed to include everything but the topic that was far too dear to the CEO. That after noon Chandrasehkar asked for the services of the CEO’s secretary and dictated a brief note on his findings.

What junior employees wanted their senior to do:

1. State expectations clearly: Bosses are often vague about what they want and often fore away instructions to juniors without telling them the significance of the task they are being asked to undertake.
2. Be reasonable; do not expect miracles: Target are set so high that the seniors manage to raise the blood pressure and anxiety levels rather than the enthusiasm to exceed expectations.
3. Give us decisions with the same speed you want to get results: Avoid creating interruptions to work by delaying decisions making them wait in suspense.
4. Find the time to ask me how I am doing instead of pouncing on me in the last minute: Managers vanish from the scene indefinitely into meetings only to appear at the last minute and create excessive rework for them.
5. Do not set me up to fail or knowingly let me down: Sometimes they wonder if the boss is really their friend and would like to see them succeed.
6. Be honest: If yo do not trust me, say so: some of them believe their bosses merely suffer and tolerate them.
7. Don’t lie; we are intelligent enough to make out: This is self explanatory and erodes trust completely.
8. Shoot the messenger: “We are afraid to ‘bell the cat’ because we know we will be shouted at for brining, not creating, the bad news.”
9. Micromanaging: Sometimes, the boss better leave us to ourselves and not be hanging around waiting anxiously for us to complete the work.

What the senior managers expected the junior employees to do:

1. Inability to say “No”: Say ‘No’ if you mean NO. Don’t say ‘yes but’
2. Anxiety to please at all costs: Why do they say yes to everybody creating a lot of confusion?
3. Over commit and under deliver: Why be shy to admit what yo cannot instead of building an expectation and disappoint at a later stage.
4. Admit ignorance upfront: No doubts are raised when the instruction is given; all problems come up only when they sit down to execute; why not do some anticipatory thinking?
5. Withhold resources: Knowing full well they need resources, no one releases surplus and idling resources. People enjoy merely holding onto them.
6. I don’t know: Please do not pass your half baked opinion freely n every subject.
7. Allow problems to fester until it blows up: Let the boss find out culture has to go. Please should if there is ‘fire’
8. Safely stay in the middle: don’t be a middle of the roader and forever feel shy about taking sides.
9. Over communicate please, rather than holding back: If you do, err on the side of speaking more than not speaking at all.

When Ravichandran read it, he said, “This is fine; how do I implement it ?”

“Whenever bosses and juniors exhibit the right behavior, give them a chocolate. Count the number of wrappers at the end of each month to know how many of the positive behaviors they exhibited.

Measurements help change behavior.

Positive appreciation helps change happen faster.

It is easier to manage technology; the soft side of business is harder to walk on !”

Shekarsan

What is our intellectual horse power?

What is our intellectual horse power?

“Do we hire people in this company to think at all?” asked Raghu Parthasarathy who had assumed charge as the Chief Knowledge Officer. Raghu had returned to India after spending over 20 years in the US. He holds several patents and helps companies develop the capacity of the people to innovate and enhance the intellectual capital base.

He was making his observations known to the CEO and the board on why he is compelled to ask that question. He revealed some interesting statistics:

Against the 2.5% of the turnover the company was spending in R&D, it was ‘importing’ knowledge and outsourcing thinking that costed the company nearly 30% of the revenue! In other words for every one rupee spent on commercializing new ideas, the company was spending 12 times that borrowing it from elsewhere. Therefore the company’s ability to think, that he termed ‘intellectual horsepower’ was at mere 8.33% If the company was content to encourage so little thinking and do much shopping for ideas from external sources, why at all hire top flight engineers and MBA’s from Ivy schools at exorbitant starting salaries?

He reeled off examples:

The human resource department does very little thinking or even doing. They outsource everything from climate surveys, Employee satisfaction surveys, recruitment and selection of senior and junior personnel, annual compensation benchmarking, skill assessment for all new positions and even 60% of the training. The cumulative financial load of all these outsourced activities was equivalent to one month’s wage bill for the entire company, 20 crores! The HR department had become a buying agent of HR services. This does not include payroll processing and the HRIS platform under automation.

Marketing itself does very little thinking related to their function. Everything from creative advertising, to consumer research, brand equity assessment needed to be audited, analyzed and reported for market share gain and loss; all these were offloaded on to third party suppliers. All that Marketing did was to arrange them make presentations to the CEO and settle their bills. They gave away almost 30 crores of business in the previous year and felt the spending should go up higher! When will they learn to do these works in house?

The Director of Communication had appointed specialized agencies to bring out the company brochure, design the balance sheet, edit and print he monthly newsletter, convene all promotional events including press meets and the maintenance of the company’s Intranet. That cost another 24 crores; down the drain.

Information processing department outsourced all their data entry work and the related analytics to a specialize agency that is supposedly statistically more literate then us. No single agency within the company was capable of generating any special reports or analysis of our own.

Raghu parthasarathy highlighted the need for the company to institute a policy that will make the ‘import of thinking ‘abilities far more stringent. He went on to categorize knowledge work into five:

1. Internally developed proprietary know how: Ready made, tried and tested proven application
2. In house research and analysis: Confidential and tightly managed development program
3. Fully outsourced projects: Routine and cost effective to get done from the outside
4. Off the shelf bought out solution: Import ideas if they are it can be developed faster and better buy
5. Custom designed package development: What is needed to develop it in house?

The first and second should be actively encouraged.

The third and the fourth seriously debated.

The last one actively discouraged; it should either belong to the first two or the next two.

Else it will become prohibitively expensive to maintain and upgrade. .

Unless the estimated 80 crores on outsourced knowledge work is actively tracked and brought down, not only would the company be at a disadvantage, it will also affect the morale of the people who have to look up to outsiders for creative solutions. will that not be counter productive in the longer term?

Shekarsan

To trust or not to trust my deputies

To trust or not to trust my deputies

Coming from Singapore to take over the Indian operations, for Peter Chen gaining trust with people should be the least of the issues. Yet what he took most for granted turned out to be the most challenging for him. He had completed a few rounds of meeting all his deputies and was reasonably pleased with each of them, the spirit of professionalism they demonstrated and the self assured way they carried themselves about the office. It should be a professionally challenging and intellectually stimulating to grow a market that offered so much diversity at such a scale he could never have imagined Singapore to offer. However that was not to be.

Peter’s family could not relocate to India. So the board allowed Peter to be in India Monday through Friday and return to Singapore for weekends. One such weekend, he was surprised to run into one of his deputies in Singapore. He let it pass thinking that people are entitled to their privacy and made no effort to make any connection with her. A few weeks later he received a confidential call from one of his Board members asking Peter if he was aware of the concerned employee being away from the country, as was required by the company policy? She, Meenakshi Khatri had obviously not done so.

Peter approached one of his long time India based Director, Gopalan, and expressed his displeasure at employees not following company rules and setting a poor example of themselves to the rest of the staff. Gopalan thought for a while and suggested that he cannot go by hearsay. Peter must possess an irrevocable evidence; when confronted the employee concerned must have no choice but to realize and own up the default. If they are given an opportunity to explain, it will drag the organization into a loop that they cannot afford to create.

Gopalan knew of an ex Army officer who was reputed for carrying out confidentially checks on the conduct of a sample of the employees and table it to Peter for him to take action. When Peter called up Col Preetam Singh, the head of the surveillance agency, Preetam expressed happiness to undertake provided the company had an explicitly state policy note being put out to all employees on the need for them to observe the code of conduct and obtain their signature on it. As a first step, Peter should give the employees an opportunity to voluntarily disclose any anomalies either they are aware of or are currently engaged in. By getting them to disclose, Peter was fortifying his stand. Peter would be better off forming a sub committee of the board of Directors looking such cases of voluntary disclosure and making a recommendation for the board to approve of. By doing so, Peter would be above board and not get pulled into the political repercussions such decisions are bound to have.

Peter faithfully went by the advice of Col Preetam Singh. Two weeks later, he received a dossier, passed on to him by the subcommittee with their recommendation on the disclosures made by his closest deputies.

Sunil Shah, Manager-Transport and Logistics admitted taking a fee for allotting loads on a priority basis so that the transporters did not have to idle their trucks outside the factory gate. A faster turnaround time for trucks need a premium to be paid to him and his staff. In turn they would ensure that the transporter’s bills were passed with minimum of delays.

Bikash Kalra, Manager distribution accepted that he charged a premium whenever the products were shipped to dealers prior to a price increase. The differential between the new price charged to consumers and the old price at which the goods were shipped would be passed back for a consideration to Bikash.

Deepak Battacharya: The ad agency and printers were mandated to pad up the fees charged on their services in order to accommodate the princely life style maintained by Deepak.

Sunil Srivatsava’s popularity with the dealers stemmed from his arbitrary division of territories and induction of new dealerships for a consideration of course. He was always kept in good humor both ways; existing dealers rewarded him for not further fragmenting their territory while the new ones were fed the hope that their allotment was imminent any time.

Kishore Rajavanshi, made a cut on every real estate deal and government liaison, while Om Prakash Gupta, Head of Procurement and import licensing collected a fee for faster goods inwards and acceptance past the income QA. Raj Sekhar, the Head of HR ran his own private agency for testing candidates and intake of temporary and full time manpower. Meenakshi Khatri handled outbound tours for her ‘friends’,which explained her being spotted in Singapore.

Peter shook his head in disbelief not so much at the recommendations made by the subcommittee on how to deal with them. It was more to do with how naive he was in assuming his deputies to be above board and the image of themselves they revealed to him thorough such a disclosure.

Preetam computed the loss to the company to be of the order of 85 crores apart from the lost productivity, internal politics and a bad reputation for being a value compromising institution. Erosion of share holder value stared Peter in the face. Should he keep them or let go?

Shekarsan

How to blend diverse management cultures

Kaz Petrosky was the head of sales. His ancestors came from the Urals in Russia but he is a naturalized US Citizen. He was on deputation to India and ran his sales team like the US Army. His team was disciplined and very sales focused. When they are given a target, they have to go after it like war had ben declared. It did not matter what it cost or who came in the way. You just went ahead until the victory was all yours. They were ethical in what they did but were mercenary like. They believed that rules were meant to be broken and relations bent at will to get the job done. They were all very focused, sure of their financial figures and up to date in the facts that mattered. Speed and surprise were the name of the game and the sold like it was an extreme adventure sport. They worked alike a great team, consulted each other, partied together and went about their work and life in a no nonsense and business like. Kaz was very proud of his team; he rewarded them well when they delivered the results. As long as they met their goals, Kaz was completely hands of and gave them full freedom.

Louis Camino, headed manufacturing. He was a quint essential European of Spanish origin. Very soft spoken and always well dress in his three piece suit, he was meticulous about meeting, reports, schedules and protocols. Every activity was planned well in advance and life happened like clock work, all on time per scheduled time. He was focused and time conscious; met people only by appointment and went about his work in an unhurried and purposeful way. He too hated surprises and relied upon methodical working, detailed documentation and maintained a factual historical record of everything as if someday he may be required to reexamine the history of how he functioned. The team in manufacturing adopted his work style.

Hitoshi Kobuse, is a quintessential Japanese. As the Head for customer Service,work is religion for him. Accordingly he cultivated a team oriented work culture where everybody was equal. He believed in keeping his team fully knowledgeable on all the products technically that required every one of them to attend training programs regularly, make intensive research and present proposals for simplifying work and generate savings. He rewarded people’s effort to publicly announce and track the incidence levels of problems and recognized their efforts at problem solving. He made hero’s out of anyone that recovered a lost or annoyed customer. He never behaved like a boss, he was a coach.

Ravindranath is a profit conscious and bottom line oriented Purchase manager. He was relentless in negotiating opportunities for waste avoidance and cost reduction. There was a popular joke in the office where a beggar took pity and donated his days collections of coins after meeting Ravindranath! He had cultivated a solid reputation for demanding justification for every paisa invested. His motto was: if you do not survive the short term, there is no long term. So, focus on managing profits at any cost; even if it meant overcommitment because people have short memories anyway.

The CEO was perplexed by the sheer contrast in the styles of the four key managers at work and wondered if he can get them to subscribe to a common work culture. We must value diversity, no doubt; but wonder what is may be costing the company?

Shekarsan

Who will stop the buck

Karthikeyan topped the Business School upon graduation this July. He joined the world of business directly from campus with no prior experience. Many of his batch-mates had been assigned to functional departments like production, procurement, finance, marketing and so on. He was singled out to work directly with the CEO as an Executive assistant. Karthikeyan had heard that an assignment with the CEO’s office meant being used up in all ways possible with nothing concrete to show by way of his own achievement; his career growth could be at risk. Karthikeyan aired his concern to the CEO in private at an informal dinner convened for the fresh batch of incoming MBA’s by the CEO at his home.

Much to his surprise, the CEO welcomed Karthikeyan’s candid confession of anxiety and his keenness to prove himself. Expressing great confidence in Karthikeyan’s judgement, the CEO sought his help in establishing top management accountability. Karthikeyan could not believe that the CEO, of all the people, could have difficulty enforcing accountability with the top management. Equally surprising was that the top management, who should themselves be anything but accountable, being otherwise.

Problem: The company had been consistently missing to meet the monthly profit projections to the board. The shortfall had been at 50% of estimates for the last six months. If every department was doing what they had committed to do, as they claimed to, why should there be any gap? Since no one came forward to clarify, the buck eventually stopped at the desk of the CEO. Can karthikeyan investigate and report to the CEO in complete confidence?

Karthikeyan’s confidential note to the CEO:

After due study, Karthikeyan proposed an objective examination of the following six factors that could possibly contribute directly to the shortfall in profits:

Budgeting: The severity of assumptions made in the plans varied with the actuals by a large margin. Likewise the unplanned investments and expense overruns had no way of being flagged off in advance and approved before incurring them. Even though the policies provided for it to be ventilated in advance as a risk, such a practice is non existent. The CEO may like to call for monthly alerts before according approval for spend. How does he propose dealing with the defaulters?

Investments: Several projects seem to have been started but only a third of them had got off the ground. Some were false starts, while many others were either closed prematurely or left hanging midway because of unresolved disputes. Some projects were declared successful although they were still to secure the completion certificate from the clients. Does the CEO get reports on these?

Revenue capture: Poor quality of order intake, unrealistic delivery commitments and acceptance of penalties for non delivery were not made public as potential risks. In addition, delayed and error prone invoicing did not make any provisions for delays in recovery due to the rework and excessive follow up effort required to mobilize collections. Would the CEO like to call for comments?

Cost management: While the budgets where signed off for a specified number of discretely identified heads of expenditure, new heads of expenses had been included without any reason for them to be created in first. Besides a number of surprise entires of out-of-budget items, there was also considerable delays in the booking of expenses. Did the company have norms on revenue recognition and closure of accounts on time?

MIS: While the HRIS was maintained at 99.5% level of up-to-dateness and accuracy, for all the heads of business information it was at a mere 65%. The Information Management policy is silent on the standard of quality of information reported and accepted. The confidence level of decisions arising out of poor quality and out dated data is a deeper question for the top management team to examine..

Culture: Noting the gaps and anomalies between what was happening and what was meant to happen, Karthikeyan was pained by the functioning styles of the each of the individuals. They varied so widely that several questions had not been answered to his satisfaction by many of the seniors. Karthikeyan confessed at mistakenly assuming his seniors to be sympathetic to his lack of industry experience and expecting them to guide him resolve the problem. Instead they not only were unsympathetic towards his challenges at work but were equally dismissive of the importance of his assignment to the company’s future, merely testing his wits in the process.

How could an organization remain young in thinking and become adept at learning if the top management acted so difficult. If people were made to struggle to get to the facts and teased for asking elementary but significant questions, how will the CEO earn the trust of the board and the shareholders.

Young MBA’s will soon lose their enthusiasm and play safe, quite like their bosses?

Who then will have the enthusiasm to question and stop the buck?

Shekarsan