ymMBA: Today’s special

Series of posts titled “Your movie MBA”, where we’re using famous hindi movie lines to make management gyan more approachable. So you thought you couldn’t learn anything from a David Dhawan-Kader Khan movie. Yep, you’re right! Unless you count that bit about the blood clot.

Of all the outrageous comedy movie settings I can recall, there could be none more moronic than Kader Khan’s greedy landlord in “Mujhse Shaadi Karogi” where the running gag is that Kader Khan has a mysterious blood clot in his brain. Everyday he wakes up, the clot shifts to another part of his brain, stopping the flow of sensory information from another part of his brain. One day he wakes up deaf, while another he is blind, mute, mad, and so on. Being that the clot is inside Kader Khan’s brain, the people around him cannot tell what’s broken that day, and find it enormously inconvenient to interact with him.So this guy walks up to him and starts talking, only to realize a 5 minute monologue later that “Aaj Bahre Hain” (today’s special: deaf). How much damage can this do to a guy’s social life, especially in the era before facebook? Kader Khan comes up with a unique device to improve his social interactions- he uses a white board to announce his “malady of the day”. As you’ll see in the screen grab below, the board of the day says “Aaj Andhe Hain” (today’s special: blindness). This eases things tremendously. Now visitors can alter their communication style based on what’s missing that day. You walk up to the man, read up the special, and choose to communicate accordingly. QED.

Go to the 5:17s mark for the sequence.

And you’re still wondering, what the!? What could possibly be the practical use of this wisdom? You’ve got this golden nugget from me, and yet you are unable to encash it, or tuck it away in some cranny in your brain to use it later. All this wisdom, and nowhere to put it to use…let me tell you something. Top secret. Come closer so I can whisper it into you ear.

Psst…the company you work for has a brain clot too.

Sometimes its Aaj Green Hain, (Today’s special: Green), while other times its Aaj High Growth Hain. You never know where the clot has hit the company, and what’s the fad of the month. If you read the company wrong, you’re still talking green while the company has woken up overnight to the joys of profitable growth, or global integration, or, I don’t know, saving the african rhino.

Do yourself and your company a favor- Get with the program, people! Go and figure out what your company’s fad is today.

Once you find out, put it on the white board to let everyone know today’s special.

Re-Wilding Old Corporate Foxes

Amit and I haven’t posted for a few weeks now. Sorry. Been in meetings. Really. Meanwhile, on long flights I had time to think about what’s going on with large companies with lot of people.

I was reminded of the fantastic story I had heard years ago about the Siberian Silver Fox. Apparently there is a fur farm in Siberia that systematically shot foxes (for fur) that were aggressive, leaving only the tame foxes to breed. One out of line growl. Bam! Fur jacket. Only gentle purring? Love shack, baby! In a space of 40 years, 10 generations and 45,000 foxes, the fox became tame, domesticated and available as house-pets. Instead of the aggressive foxes that started the farm, “selective breeding to create genetically docile animals had resulted in a breed of ultra-tame foxes that make good house pets ‘as devoted as dogs but as independent as cats, capable of forming deep-rooted pair bonds with human beings.’ ” Link here.

As with foxes, so with humans. Companies that start out hungry and aggressive end up, after several generations of selective hiring and grooming, becoming docile and domesticated. Down boy. Here’s a bone. Good boy! Now beg!

No wonder big companies have an innovation problem. They have systems optimized for performance, and individuals are selected for conformity. Over time, the individuals and the company lose their ability to think differently, to perceive the world differently, and to create any new products. Successful companies become evolved, but secluded, ecosystems. Not much new blood is added into the companies from outside, and the insiders get used to walking, dressing, talking and thinking like everyone else. Then, the companies fail and make way for other companies to take the baton.

Who’s thinking different? Everyone, and no one. Most companies that are successful today probably hired a lot of smart people early on. Then, the systems, the processes, the performance reviews and the insider cultures breed a new species of employee. One that doesn’t think different. One that conforms.

Companies have to learn to de-anonymize to allow people to create their own identity. People that are clever want to be recognized for their clever-ness. They need an avenue to express their intelligence, creativity and ideas. Not everyone will be a Steve Jobs, obviously, but within small groups each one of the employees can be a rock star. Lost in a sea of heads, people will either learn to tame their personality in order to fit in, or leave and find themselves elsewhere. That’s a pity.

What can companies do to de-anonymize? Companies can take diversity seriously (instead of being a buzzword). They can deliberately hire – and make heroes out of – different breeds of thinkers and workers. They can create opportunities for people to find themselves in small groups. None of this is difficult, or terribly revolutionary. But it must be done.

Tribes, Stories and Recognition. Creating small tribes or communities of 100-150 people is one way (I had written about Dunbar’s number here). Alternately, giving people a compelling story that binds people and gives them purpose is another way to allow people to explore their own sub-story. In tech-savvy companies, using the magic of social media to create new ways to providing recognition and individual fame (however ephemeral). These are all simple ideas.

Meanwhile, you can buy a domesticated fox for $6000 here.

Superstars of the business world

I was at Oracle Open World last week, and sat through Larry Ellison’s closing keynote. Twelve thousand people in a closed and dark room, six massive TV screens behind Larry, and the blaring rock music that greeted his arrival on stage. Before he came on the stage, the audience is treated to a montage of Larry’s fantastic yacht race victory in his sci-fi new yacht. His hard-working team, and their hard-charging victory in the America Cup. Thus primed, the audience sat with bated breath, waiting for Larry to speak. And then, he spoke, the audience hanging on to every word. The man can surely hold a crowd.

(You can see clips here). This guy is a rock-star. It is rumored that the IronMan character in the movies is based upon Larry Ellison- that’s how much of a rock star this guy is.

Corporate CEOs need to be rock stars to impress their clients, share-holders and employees, all the while creating fear in the minds of the enemy. It’s all for effect, this audience baiting, this hyper-enunciated speaking, this rabble-rousing. It’s all to good effect.

The question is: Does everyone in the business world have to be a rock star of this variety?

I think not.

It depends on what the person’s strengths are, and what the company needs at the time. Even in the music industry, the true home of the “Rock Star” phenomena, there are different types of musician-heroes. Not everyone is a glam-rocking-fist-pumping-bad-boy! On the contrary, most are not at all in line with this stereotype.

This bad boy image works only for those people who need to reach large stadium-type audiences, and who get their popularity through the media. Exaggerated actions are what will get the attention they want- be it in the stadium, or be it in the press.

There are other types of musicians in the world of music, and in the world of business. All are needed. Here’s a list.

The Songwriter who, like Gulzaar, writes the songs that others become famous for. In the corporate world, this person may be doing all the thinking, allowing others to take the fame.

The band-wallah who, like The Edge or George Harrison is part of successful team, and is not in the limelight, but not too far behind. The show is not about him, but the show cannot go on without him.

The playback singer who, like Sonia-ji is calling the shots but can only be heard through other people. These could be the power-brokers, or the agenda-formers in any company.

Many times the press- even the business press- looks for the rock-stars who can quip in real-time, and who can give fantastic sound-bytes. That’s what the press needs to make their stuff readable. Doesn’t make the “superstar CEO” any better than the effective manager who does not give interviews.

Just a thought! My sketch below. Oh, and the audience soon grew tired of Larry’s pitch. By the end of his presentation, more than half the audience had quietly shuffled out. It was good to have the room darkened!

The TAS rejuvenates itself…

… If not wholly, then quite substantially!

In our time, the TAS was seen as the elite within the Tata Group.  They formed a cadre that worked across the group, and were generally seen as future leaders of India’s top business conglomerate.   However, over a period of time the importance of the TAS has probably diminished.  At the IITs and IIMs, the TAS is no longer seen as the top job.  Meanwhile, many of the individual Tata Group companies are now large and strong enough to attract outstanding talent by themselves.

So why have the TAS?  I speculate, but the TAS still has several advantages:

1. Not all Tata companies are able to get the right talent, and the TAS does fill that need to some extent.  Especially in old-economy companies which really struggle to attract and retain fresh talent

2. TAS managers work across companies and industries – and are able to bring in best practices and ideas from across the group

3. Since they may owe some loyalty to the holding company, I would imagine that the TAS also drives the Chairman’s vision and agenda to some extent

It seems that the third point is at play in the ongoing restructuring of the TAS.  This article in today’s ET points out several of the changes being made.  The training period now includes a rural stint as well as international assignments.

On the rural posting:

“TAS was conceived as an elite service of young managers. But this rural exercise shows them the reality that exists in their own backyard which they have never experienced,” says R Gopalakrishnan, executive director, Tata Sons. “If we believe that a large part of our population actually lives in rural areas, we want to build leaders who are relevant to this country and to its future,” adds Satish Pradhan, executive vice-president, group HR, Tata Sons.

And then:

After two months in the villages, the 35 recruits in the 2009 TAS batch were dispatched to many corners of the globe. The next couple of months were spent on projects in the operations of group companies such as Tata Beverages or Tata Communications in countries like South Africa and UK. This ‘village-and-the-world-in-120-days’ break-in drill is a recent introduction to the 53-year-old programme and part of an attempt to reinvent itself to meet the group’s new talent requirements.

The Tata group is clearly orienting itself for two of their stated strategic thrusts:

1. The fortune at the bottom of the pyramid, and in the villages (Tata Nano, Swach etc)

2. Going global (Jaguar, Corus etc)

And what better to do this than to immerse young recruits in both environments, right at the start of their careers.  Importantly, they are now looking to recruit international staff into the TAS – thereby breaking the India-centric mentality that would otherwise dominate.

How many other  companies are able to use their recruitment and training programmes to drive a strategic agenda like this?

Water, you saying? Firangi Pani, and how!

There’s a fantastic bar restaurant in Bangalore called Firangi Pani. I always go to their sister restaurant, called Saheb, Sindh, Sultan. I was reminded of this bar (which, by the way, translates as “Foreign Water”…in their case referring to alcoholic beverages), when I read this story on Fast Company. Here is the link.

There is a company that is planning to ship water from pristine sources in Sitka, Alaska to India. I was in Alaska a couple of weeks ago and can confirm that, yes, indeed, the water is pristine! Being a desi, I can confirm that water is indeed in short supply in India. QED, no!?

Just in case you think this is crazy, I’ll have you know that one of the first self-made millionaires in the US was a New Englander gentleman called Frederic “Ice King” Tudor, who shipped ice from US’ east coast to the Carribean and, ahem!, India way back in the 1800s. The business model works, despite what our intuition might suggest!

Will add a new twist to the firangi pani story. Hopefully they won’t price it at the same level as Evian.

Work+fun, funwork or fun*work?

What does fun mean in the context of the workplace?  Its nebulous.  I have three definitions:

1. Work+fun: Workplaces where one can have a good time.  Most tech/BPO campuses fall in this category.  The work may or may not be spectacular, but the average employee gets access to sports facilities, libraries, good cafeterias, the occasional music concert, team dinners etc.  All of this contributes to a feeling of well-being and that “life is good”.  But the fun is really outside the actual work.  Its a little artificial – but its better than work without fun.

2. Funwork: There are jobs which are (at least seemingly) fun.  Like Harsha Bhogle at ESPN – getting to watch every cricket match live and commenting on it.  One assumes that the folks in entertainment businesses have a lot of fun with their work (not always though – entertainment can be fairly serious business).  One also presumes that scientists working in high-end research labs also have a fair amount of fun.  By and large, though, there is a “star” element to this.  The top-dog gets to define his agenda, experiment, work with loose budgets and gets a disproportionate share of the glory.  Not everyone has fun, although there is a rub-off effect.

3. Fun*work: This is that rare category of companies where a person has the liberty to think creatively and do things differently even in his/her day-to-day job.  The workplace tends to encourage diversity of thought.  These companies thrive on incremental improvements and enhanced richness. For instance, Youtube has a vuvuzela button.  Google plays around significantly around its search function – building in little hooks (try searching for recursion in google).  Even among services firms, there are some which push you towards a template, and some which encourage you to change the template.  You don’t need to be a genius to express yourself at these places,  everyone can add their ingredients to the pot.

What kind of company are you at?  What kind would you build?

Old and New Product Life Cycles

Fascinating interview with Deepak Puri (MD, Moser Baer) in yesterday’s edition of the Economic Times.  A couple of really interesting examples of old and new PLC management in there.

On optical discs:

“PCs and other devices are still shipping with CD drives. The installed base is large, though the demise is happening. CD is declining 5-8 % every year, DVD (sales) is flat. Bluray is rising fast. Discs will morph into something else. Volumes may come down due to better disc capacities. CD and DVD will have a long tail life and Moser Baer being the lowest cost producer will last till the end. I foresee 7-10 years’ life in optical disc space,” says Mr Puri.

This is a classic lesson in managing a slow dying product (in an old-PLC category).  As demand decreases, high-cost producers will be forced out of the market and business shifts rapidly towards the lowest cost producer.  Eventually, there are only a couple of suppliers left.  Given that optical discs will be around for some more time – given the large installed base – the last supplier left in the industry can make supernormal profits.  Since the product category would still be in decline, it’s pretty unlikely that another competitor would choose to invest in it.  Gold mine!

On the entertainment business (VCDs/DVDs):

“We don’t have resources to go across the country (to tackle piracy). We are looking at certain high piracy areas and trying to tackle the problem. We are now giving five movies compressed on one DVD. We are telling the pirate: when a legal movie is selling for Rs 35, you have to sell below that to make money and your margin is shrinking. We told people: why don’t you start selling legitimate movie, no one will run after you. Many of them have changed.”

It’s something that we had talked about in this blog sometime back.  New PLC management demands rapid proliferation of distribution channels to capitalise on the hype cycle.   Instead of cribbing about pirates, Moser Baer is making it attractive for them to go legit.  Now, if only Hollywood understood!

Looking for seed funding?

Check out kickstarter which helps creative people find seed funding for their projects.  This from their FAQs section

What is Kickstarter?

Kickstarter is a new way to fund creative ideas and ambitious endeavors.

We believe that…

• A good idea, communicated well, can spread fast and wide.
• A large group of people can be a tremendous source of money and encouragement.

Kickstarter is powered by a unique all-or-nothing funding method where projects must be fully-funded or no money changes hands.

The site recently helped launch Diaspora a new social networking site that plans to take on facebook.  More about that here.

Competing with Pirates

Given the incredibly short life-cycles of entertainment products, piracy can have a serious impact on profitability of content publishers.

Moser Baer seems to have found the answer, and is a classic New-Product-Lifecycle player. Compete, rather than complain.  While all the entertainment labels moaned and groaned about piracy, Moser Baer acquired a portfolio of titles and flooded the market with low priced titles.  How did they do it?  My guess:

1. Leveraged their production capacity for optical disks (classic forward integration)

2. Acquired a large portfolio of titles on the cheap (typically old and neglected titles.  The owners were happy to get anything for them)

3. Reduced packaging costs (paper jackets instead of fancy boxes)

4. Micro-retailed their products to hit the local grocery store – not just the music shops (which are increasingly losing relevance anyway)

5. Took a portfolio view on profitability, instead of focusing on single titles

Over the last few years, the price of DVDs has collapsed in the market (Rs 50-200 for “original” DVDs and Rs 30 for “pirated” DVDs; earlier these numbers were Rs 400-500 for originals and Rs 60-100 for copies).  But the sales of legit DVDs has probably grown.  Interestingly, many of the retailers of pirated DVDs now stock Moser Baer DVDs.  They can’t compete much on price anymore, and as one of them told me “We also want to sell original”.  For Moser Baer, which treated the market like a new-comer and not like an incumbent, it has been a rapid rise.

Are you still trying old-product-life-cycle strategies?  Does your industry run the risk of a Moser Baer coming in?