It really happened in India!- A Book review.

I completed this book, almost in single sitting. And found this really good book. There is a ton of new things in the book, which we can adopt in day-to-day professional life.

Mainly, Kishore talks about how to dream big and convert that dream in to reality. This is book about step by step process of building a business group, starting from a humble beginning. Starting with Pantaloon retain, how Kishore build the big business empire ranging from apparel, home solutions, grocery and micro-retail (Focusing on retail in rural India), is really an astonishing story.

There are few new things which captured my mind. The idea of empowering managers of all level, there by building an organization which is known for making decisions and owing that. Like painting employee’s house on the eve of Diwali (Best known HR policy!). Coming up with new business structure every three years in order to be in business, up-to-date.

Innovative thinking or ‘re-writing’ the rules keeping the basic values intact is one thing which is being referred through out the book. Kishore writes, “An Organization dominated by systems, analyses and processes, will only be good at repeatedly performing one particular task very well. But it wouldn’t be able to innovate or create something really new”.

What stuck me is Kishore’s focus on business growth. He says, ‘if you focus more on operation, there is a limit to an extent you can improve the efficiency, rather then that companies need to focus on growth, operational efficiency comes by itself by following well defined processes”.

This book is all about having a dream and working to make it come true. It is a dream of middle class man, with all possible limitations one could have in life. Paulo Coelho writes in The Alchemist, ‘And, when you want something, the entire universe conspires in helping you to achieve it’.

It is all about that, having a dream and following that! In summary, it is a must read.

Finally; wishing you all a happy and prosperous New Year 2008. May your all dreams come true in this New Year.

It happened in India!

‘It happened in India’ is the autobiography of Kishore Biyani, founder and CEO of Future Group. Future Group has retail brands like Pantaloon, Central, Big Bazaar, Food Bazaar, and Pyramid.

Recently I purchased this book and have started reading it. It is too early to write a review on this book yet, I need to turn more pages to do that. But, this post is all about my first thoughts about Future Group and first generation entrepreneur, Kishore Biyani.

Mr Biyani has understood the Indian buyer’s mindset very well. And more ever, he is more of a calculated risk taker. This book talks about his strategy in all segment of retail business in India. He talks about ‘Sabase sasta din’ concept in Big Bazaar and how it created the word of mouth publicity among the people. This book can be liked because of such innovative ideas.

Being first generation entrepreneur, it is not easy to set up such a large business. We can see very few people who have been there and have done it. Sunil Mittal from Bharati group is another person who has done that. Mr. Biyani’s great achievements are in dreaming about big things and execute them up to greatest accuracy. In this way, it seems to be an inspirational reading.

Though, his ideas seems to be inspired from American retain business, like Home Depot (His recent venture of Home Town has similar business plan), Central (Similar business plan of Target) and Big Bazaar (Similar to WalMart), but these are truly ‘Indianized’ to server Indian consumer.

Any way, watch is space for more posts related to this book if I find it truly good. I am sure he has some thing to offer!

Need for Team work

The Five Messages leaders should manage

I was reading a review in ‘Harvard Business Review’ this weekend, titled ‘The Five Messages leaders should manage’, by John Hamm.

This is all about functioning of CEO and what they need to really focus on. Author says, CEOs need to focus on how to pass the correct message through out the organization, it’s very vital for company’s success. He compares the situation with Emergency Medical System, where all the team members seem to be on the same page, all the times. The doctors, the paramedics, the nurses, all of them share the same thought when comes to saving a life. The same situation should be there in the organization. Otherwise, the vision and dream of a company will remain in the boardrooms only. Author says, CEOs should not assume that all his top management shares the same thought that leads to disaster. CEO should inspire the organization to take up responsibilities for creating better future.

1) Organization Structure and Hierarchy.
Organization restructure should happen to align with market competition and that should always aim to take up the competition. In this competitive market place, aligning the company structure is the need of hour and CEOs needs to do a better job on communicating the organization changes up to the bottom level. Otherwise it just creates confusion amongst employees about what is the future of the company and who is what in new organization. Communication should be so effective that there should be no room for confusion or fear.Author gives example of HP and its then boss. He says, when reorganization happened, everyone was so confused about their future that the actual work stopped for 12 weeks, which is one full quarter! Instead, he says, with in 48 hours of announcement of restructure, CEO should have a company wide meeting and a web cast as why this is been done. To keep the confusion to a bottom level, CEO should have involved everyone in the structure plan.

2) Financial Results:
Results are another powerful concept that left unmanaged, poses a risk to a company’s long term health. When a CEO tells, focus on our results, senior managers often interpret that as meaning ‘Do whatever it takes to meet investor expectations’. By loosing the sight of the connection between employee behavior and results and failing to take advantage of existing opportunities, thus leaders miss out building a long term value for their firms.Results should be used as diagnostic tools in the service of improving future execution.

3) The Leader’s sense of his or her job.
Surrounded by people who seek their feedback and approval, some fall in to the trap of thinking that their responsibility is to be the person who has all the answers. The ‘answer man’ falsely believes himself to be the final arbiter of conflicts, decisions and dilemmas. This puts him in to a very lonely and isolated position.Effective leaders should understand their role is to get answers from others. Everyone has answers, ask questions, especially when some thing goes wrong.

4) Time Management:
Every executive feels that time is in short supply. CEO must communicate to the company that resource of time must not be squeezed for all it is worth but instead must be strategically utilized. Time is fixed to choose wisely within constraints.

5) Corporate Culture:
Culture is not created by declarations; it derives from expectations focused on winning. Culture that encourages performance if you hire right people and implement processes that will allow the company to win. CEOs who fail to communicate the vision and expectations very clearly, produce meaningless culture.

I feel these are important points to be shared by a leader, after all, we all follow a CEO or a leader while we are with corporate hat.

Leaders should sell dreams and show path to execute this.

There is no other way out there!

Need for CGO (Chief Globalization Officer)!

The world is getting flatter and globalization has become a necessary thing for the expansion. If we look at any company, from Auto Major GM to Starbucks to WalMart, every one has global plans. And they want to expand globally.

The world is getting truly flatter and each company now required to work with different countries and people with different culture. Take example of Corus deal of Tata Steal or latest joint venture of Mahindra with Nissan motor company, globalization is the mantra for each organization. And each company needs to work with a global partner. And it is equally important to get this thing right; otherwise it might collapse at any point of time.

Even competition is getting global. We have a level ground now and competition is getting really global. Tata Motor is competing with GM and Ford to acquire Fiat and Mahindra tractors are competing with John Deer in US in farm equipment segment.

With this kind of global competition and global alliance, it is required to have a CGO, Chief Globalization Officer, who can really spearhead the idea of globalization, the business plan associated with global expansion and plan for the exact execution of it.

There are a lot of challenges in expanding globally, one need to get the supporting global level processes; also it is equally important to have global level quality. And this kind of preparation needs a lot of planning and careful execution. One needs to really build a global scalable business model.

Global Inc can get this right? Or do they need to have a CGO?

Private Equity Funds and CEOs

I was reading an article in Business Week about the pressure private equity funds put now a days on CEOs (Of companies they manage). Those CEOs are under tremendous pressure to perform, financially.

This article is cover up of Citi Financial CEO quitting last week due to bad performance during recent couple of quarters, where Citi had to write off heavy funds because of American mortgage slowdown.

It might be true, perhaps. USA business is now days heavily loaded with equity fund managed companies. In India, situation is bit different, however scene is changing fast and many equity funds are coming up.

Question I have is, is it fare to pressurize to deliver more? Or it is all fare? One view point is, equity funds are also under pressure to perform and they need quick bucks as well.

Or CEOs should have free hand?

I know question is not simple, but I am still searching for answer.

American Sports Business

Currently I am in US on a business trip. Got a chance to be here on a weekend and watch the Baseball World Series (!!). That triggered off this post.

If we keep aside the sports part and look at business face of it; we will be surprised to see how American Capitalism is playing a major role in sports as well. Sports business has really matured in America, where all players deal through their professional agents for the contracts.

There are two parts of it, one is professional agents in sports and another is corporate world’s involvement in these sports.

In a way, it is good for players. Their agents can take care about money and team a player needs to play, leaving players to concentrate on the game. In this way, they need not worry about the contract details. An agent’s main aim is to sell the players in his portfolio for more money.

These agents also guide the players in terms of career, about the care they need to take about their fitness, the public image they need to build, the social service they need to do in order to stay afloat. This kind of advice will certainly help players to be in the game for longer time.

Mark McCormick is supposed to be founding father of this kind of sports business, where his consulting company guided players like Bon Borge, Martina Navratilova, Jimmy Conners etc.

Each ball club is managed by a professional management team, led by their CEO. His ultimate aim is to generate more revenue for the ball club. So, they will hire more good players with the idea that if players are good, team will advance to next stage of the game (Like Semi final, Final etc) and thus brining more people to watch, which is nothing but more revenue. Such times these ball clubs and CEOs are under pressure to perform, so does the coaches. Coaches needs to take the ball club in to newer heights, otherwise their jobs will be at stake.

The point what we need to note is, American sports runs as any other business. And we can see the American management effect; like being ruthless, expecting results and generating more revenue, in all sports.

Compare this to India; the Subhash Chandra’s ICL has some elements of it, but yet to see how this gets shaped up. But, this is certainly a good change, it is just a beginning.

It is any way better than having out-of-the-form players getting selected based on number of years of experience he/she has, or because of he/she belongs to particular state.

What do you say?
(Don’t take me wrong, I am not against any player, I don’t follow Cricket :-)

The man who rewrote the supply chain concept-Michael Dell

I got a new Laptop, as my earlier IBM Lenovo got screwed up. The new one is sleek, Dell made, D630; boots and works faster!

This new one really made me to think about Dell Inc and the man behind its remarkable success, Michael Dell. Michael Dell came up with an innovating idea of selling directly to customers and thus redefining the supply chain concept. Its very hard business plan to reproduce and I guess this was Dell's USP when it started its business, in the area where there were established players like IBM, HP, and Compaq.

In 1994, Dell was a struggling second-tier PC maker. Like other PC makers, Dell ordered its components in advance and carried a large amount of component inventory. If its forecasts were wrong, Dell had major write-downs. Then Dell began to implement a new business model. Its operations had always featured a build-to-order process with direct sales to customers, but Dell took a series of ingenious steps to eliminate its inventories. The results were spectacular.
Over a four-year period, Dell's revenues grew from $2 billion to $16 billion, a 50 percent annual growth rate.

Profitability management, coordinating a company's day-to-day activities through careful forethought and great management, was at the core of Dell's transformation in this critical period. Dell created a tightly aligned business model that enabled it to manage away the need for its component inventories.

However, at the heart of Dell's profitability management was a seemingly impossible dilemma: the company had adopted a build-to-order system, yet it had to commit to purchase key components sixty days in advance.

Profitability, not inventory

The inventory in a channel is determined by the variance in supply and the variance in demand. Unless these variances are reduced, channel inventory can only be moved around, not eliminated. I think of this as the "waterbed effect." When you sit on a waterbed, it sinks in one spot and bulges in another. The water is redistributed but the amount stays the same.
Through its use of profitability management, Dell matched supply and demand on a daily, weekly, and monthly basis. It sharply reduced the variance, and the need for inventories simply disappeared.

In many companies, inventory substitutes for profitability management, tying up valuable capital and preventing the company from focusing on day-to-day business alignment. In most companies, managers face a choice between managing inventory and managing away the need for it.

This principle can be implemented to any industry, even to Software industry. We also deal with inventory, supply and demand.

By the way, are we managing profitability or inventory in our group? If the answer is profitability, we can have our cake and eat it too! If not, how we can improve?

Fit To Be A Effective Leader

I am a firm believer of the fact that leaders should have a high energy level, which generally reflect how they interact with customers and employees.

Its vital to have a very positive body language.

I was reading an article about how keeping fit is important for leaders. This business week article gives some examples and concludes how it would help you to become a better communicator.

So, one needs to start hitting the treadmill

What makes an effective executive?

I was reading this article in ‘Harvard Business Review’. Here is the summary of this article.

To become an effective leader, one need not necessarily be a man with charisma. What made them all effective is that they followed the same eight phases.

1) They asked, “What needs to be done”.
This question, almost all the times will have more then one urgent task. Jack Welch came up with answer, every five years, “what are needs to be done, now” and each time he came up with different answer.
2) They asked, “What is right for enterprise”.
Asking this question while making important decisions do not some times guarantee the best results, but not asking this question always leads to bad decisions.
3) They developed action plans.
Executives are doers. Knowledge is of no use for executives unless it is been translated into deeds. But before jumping in to action, executive needs to plan his course of action. How he wants to execute, about desired results, problems, check-in points etc.In addition to an execution plan, this action plan should contain a system for checking the results. Typically two; one halfway through and other towards the end. Without an action plan executives becomes a prisoner of events.
4) They took responsibility for decisions.
5) They took responsibility for communicating.
6) They were focused on opportunities rather then on problems.
Problems should be taken care of off course, but taking action on problems will not create results, it prevents the damage, where as focusing on opportunities produce results. Executives should put their best people on opportunities then on problems.
7) They ran productive meetings.
Decide before meeting, what kind of meeting this would be and set a fixed agenda. Its equally important to take MOM and distribute the action items to all present in the meeting. Also, it’s important to follow-up on these action items.
8) They thought and said, “we’ rather then “I”.

Effective executives differ widely in their personalities, strengths, weaknesses, values and beliefs. All they have in common is, they will get the things done. Effectiveness is a discipline and like any other discipline, effectiveness can be learned and must be learned.

I think we all have a lesson to learn from this article.

98.3 FM Radio Mirchi: What is the business Plan?

Yes, we do keep hearing Radio FM during some part of our day, may be it is during morning hours or during drive to office or back home. Though we enjoy the songs and RJ’s presentation, the business model which works behind the scenes is kind of complex.

It is untold truth that every business needs to be profitable to exist and it is fundamental element. And where does Radio Mirchi makes it money?

Daily Ads: The first revenue model comes to our mind are the advertisements being broadcasted during entire day. It does get revenue, but is that revenue a business can relay on? Mind you, the number of ads being broadcasted per day more or less can’t be increased, so this revenue is fixed. It can’t really make your top line grow.

In order to be competitive and to make top line grow, each FM needs to engage itself in backend revenue generator models. Look at the events being promoted by Radio Mirchi. They typically get involved with some firm and organize events through out a particular city or area, there by generating revenue from it. The associated firm gets a great marketing boost.

In addition to this, FM radios are being hooked up by marketing firms to survey a particular segment of people. With out our notice we kind of share our information about what we like and what are our shopping habits. This kind of marketing data has a huge value. Off course we do share our cell phone the moment we call.

In addition to this, companies select FM radios for promoting their products or service. Like ‘tikat Thursday’ or ‘Blockbuster Budhawar’, where companies give free vouchers and try promoting the services, needless to say, Radio Mirchi makes money in addition to Vouchers it sends to winners.

In US, the Satelight radio got a huge success, because of the unique business model they have in place. Perhaps it is slightly complex by the way in which it operates and generates money, but it is for sure a money spinner for investors.

We are kind of used to AIR broadcasting where, every thing was decided by the broadcasting ministry. And AIR, typically, don’t bother about the fact that it has to generate money. But, new FM radios needs to have a growing business and this market segment will only get interesting going forward.

‘Mirchi sunnewale always khush!’ :)

Check De India!

I watched Check De India, this weekend. And found many management lessons in it. It’s an amazing movie made keeping sports business in mind.

Team Comes First! :- It stresses the importance of playing as a team. In fact, ¾ th of movie Kabir Khan tries to build a team, which mentally thinks and acts in one direction. And more ever, he keeps on telling his players to ‘pass’ the ball, instead of glorifying themselves by scoring more goals. One’s person ego or personal pride should not come in between, they were for common purpose of winning the championship and they need to make sure they achieve that.

This is an amazing lesson we can learn from this movie. We need to think about team first, individual later. This is the reason of success of any team. This is true with sports or with any business team.

Motivation: Kabir kept on motivating his team, even they lost a game. He had strong faith on his team that they will deliver and up to his expectation they did deliver.
It is foolish to assume that each team member is equally capable of delivering the things. But, keeping everyone’s contribution to peak level is what coaches do. They know in which area each player is good at and they make moves accordingly.

Strategy: The main job of a coach is to make strategic moves, keeping his team in mind and Kabir exactly did that. Be it breaking ‘one-to-one’ mapping of Koreans or thinking about the final penalty push to be a straight one and signaling his team member to prepare for that, he made good strategic moves.

Build the dream: Kabir built a dream in team members that we will win the world cup, this is all coaches and business leaders will have to do. It is ultimately up to players to perform and make things work. Coaches can’t play themselves and win; it is players who do that. Building the dream and making sure each player has the same passion and dedication is extremely important, Kabir did exactly that.

Attention to details: Coaches and business leaders need to keep attention to the details. In this movie, coach kept track of even a small thing that might distract the team thinking and tried to minimize such things. Like, having one bad player in the team, who wants to disturb the rhythm. He took some tough calls, but it was for team again. There was no personal ego involved in it.


As a movie, there might be some negatives points; and I am not here to discuss that. But the theme is about the team. Why team comes first and why team needs contribution from each one to be a successful. It is about setting a goal, and taking your team towards that, even though people call you ‘Tughalak’. This movie certainly gives message to corporate world.

Check de India!

Aligning to client’s culture

I was reading a panel discussion abut BPO and outsourcing. The participants have stressed on the importance of aligning to the vendor and their culture for success of an outsourced project.

I have been working in this kind of industry since almost 6. Obviously I prefer and encourage offshoring with my clients, but not many clients have understood the importance of aligning with vendor’s culture. During one of the project, I remember our CEO told us, align to their culture, and then you can expect better results.

This is most forgotten part of such projects. The responsibility on both parties, vendor needs to understand the culture of client and client needs to understand vendors. I found some general outings and discussion about sports or general issues tend to break this barrier. One should not feel, the technical part is one and all. Off course it is important, but alignment helps to cover a long road.

The way we normally handle clients is that we restrict them to project related discussions and technical discussion. This is important to discuss these with client. But, my whole point is that we should not restrict only to this. Building the relationship is equally important.

After all, we all would like to be treated well and respected at our work by clients, is that right?

India’s Retail Business Space

Over last couple of years, India is witnessing so many new comers in retain market segment. This space is already getting over crowded! Leaving apart other retain market segments like electronics, apparel etc, let’s look at vegetables and grocery retail in recent times.

India has been predominantly dominated by next door, ‘pops-and-mom’s store’, or next door ‘kirana dukan’. But, what we are witnessing in current time is a systematic retail business, in the form of Relience Fresh, More, Subhiksha, Spencer etc.

Historically, Indian consumer is cost sensitive and some retain players seems to have understood this. Unlike in US, where people can drive for an hour to get to a WalMart, Indian consumer tends to look around their home for grocery. Traditional cash-and-carry kirana shops provided this kind of facility so far.

Now, the current players have an uphill task in providing the goods at low cost, matching the Kirana Shop cost to be successful in business. The biggest challenge is the real estate. Retailers need to find a space, which is nearer to most of the consumers. And any space with-in city limits costs more in India. In addition to this, logistics is another challenge, with poor road infrastructure; shipping takes more time and money.

Subhiksha seems to have overcome the cost of infrastructure with their unique business plan of having their stores in places which are less costly. Also, The reason why a Subhiksha can price HLL goods so much cheaper than the corner kirana store is not so much that HLL gives it to Subhikhsa cheaper (there is some of that too) but primarily because Subhiksha knows how to make money by turning inventory faster at a rock bottom margin.

The great success of WalMart in US is because of consumer segment they target at, and the lowest cost they provide for goods. Their infrastructure management and supply chain have been key reasons for this success. Example, they always have WalMarts out side city limit.

What we need to observe is WalMart’s entry in to India, where their key success points will be challenged by Indian conditions. In a wise move, they have decided to enter with an Indian partner. This retail market segment is the space to be watched.

But, in all this, consumer is going to be benefited. That’s all we want!

Mumbai Dabbawalas

I was reading a news article about Mumbai Dabbawalas. They will be offering the consultancy services in logistics management to India Inc.

Dabba service has been rated as Six-Sigma quality by management guru, C.K.Prahlad, this means one failure at one million attempts! And the logistics management of Dabbawalas is been study material for all major B-Schools.

But, the question we need to ask here, can we reproduce the same concept in other cities? Agreed, their supply chain and logistics management is fail-proof, but is it a model which can be reproduced? Can we have this kind of service in other cities like Bangalore, Delhi?

Answering this question might not be straight forward. Because, on first instance, reproducing this model looks very difficult in other cities.

But, this leads to a new question, what is there in the logistics model of Dabbawalas, which Indian Inc can take and adopt?

Answer is simple. Dabbawalasa are lead by simple management principles and systematic approach that minimizes the confusion and enhanced efficiency of resources. Corporations use technology for implementing certain principles. But if you are directly implementing the principles, there is no need for technology. Indian Inc may not replicate Dabbawalas experience, but they can definitely adopt the principles.

Business model success depends on the basic management principles!

India and it's GDP Growth

There is a recent WorldBank report on India’s GDP growth, which is expected to slowdown in next two years. The reason indicated in this report is fiscal tightening, which is aimed at targeting the inflation. The GDP is expected to grow 8.4 percent, 7.5 Percent and 7.4 percent in current, next and year after that respectively.

But in my opinion, we have a different problem to solve to maintain the GDP growth and intern the economic growth at steady rate going forward. The basic infrastructure we have is to be improved in line with the growth we are expecting. In today’s scenario, the cities are just overcrowded with no infrastructure in place to accommodate new workforce, heavy traffic, no water and electricity, are the main problems.

We need to have a supporting engine, a society which would help this growth. We have a natural advantage of English speaking workforce and comparatively low wages. We got to make use of this advantage to keep the growth going.

One might wonder, what this infrastructure to do with growth? There is a direct link; lets assume there is a retail economy, which is expected to grow. Now, if we don’t have the basic infrastructure of roads, transportation of the goods becomes a problem and thus hinders the growth rate.

We can very well keep this report aside saying this is just a speculation, but in my opinion, there is a lesson in this, there is a message we need to grasp and appreciate. We are not just ready yet, we are just starting and we need to get ourselves ready for the next level growth. And to make the country more investment friendly, we need to have a sound infrastructure in place.

Report at http://www.businessstandard.com/common/storypage.php?autono=287080&leftnm=3&subLeft=0&chkFlg=

I am back

After long break, I am back with blogging.

New name, hopefully new type of content!