The UPA government’s decision to launch a national project that will give every citizen a unique biometric identity card, and to put Mr. Nandan Nilekhani as its chief, has a potential which can transform Indian software industry.
First, it sends a strong signal that use of information technology for development has arrived. Ever since importance of Indian IT industry became evident, there has been a debate if it can help Indian context of development. While IT’s benefits are obvious, it is still seen as a gap, much like generation gap and has created difference between the halves, those having IT compatibility and those who are not. Initially AP chief minister Chandrababu Naidu showed how IT can be used while managing the government, there after several states implemented IT in administration and governance.
Secondly, a large government spending on IT will bring about a huge change in the software industry and eventually in hardware industry. Currently domestic share compared to software export is way too less. Compare that with China, though software export of China might be less, their domestic industry is much bigger than their software export industry. Thus, China’s software industry is still bigger than Indian software industry (Though India is bigger software exporter).
Thirdly, this initiative would act as a means to showcase the power of IT to sectors which have not embraced IT yet, like Public Distribution System, PWD, National Highway program etc. This awareness would generate the much needed boost for the domestic IT market.
Above all, this identity card initiative would result in much better interface between government and public considering multiple advantages this card brings to the table.
Sunday, July 12, 2009
Sunday, June 28, 2009
Leading from the front
One of the points I was thinking this week is about leadership; couple of annual reports (MindTree and KPIT) really made me to think, as how top leadership is a game changer in difficult times like the one we are in middle of.
Though the time is tough; the leadership team of every company should step up and take the company along with. Every manager should be part of the change and really motivate the team to deliver. The difficult times would throw up the need for efficient leadership.
What impressed me about MindTree is though they are hurt by the market conditions and economic slowdown; however you can feel the vibration where the leadership team and management are confident about beating the slump. This confidence, if articulated down to each individual of the company, it would make team to stand up and fight.
In “Go kiss the world”, Subrato Bagchi has mentioned, during the technology bubble burst in 2000-01; if there was no able leadership of Ashok Sotta, the MindTree might have been closed then and there itself.
I feel in difficult times, management should stand up and take the risk and take everyone along by sheer motivation. This is what management gurus’ call, “Leading from the Front”. That’s what we need.
I can’t stop getting motivated from one of the “Lead India” video; which was circulated some time back. The message is what I liked and get motivated to push harder.
Though the time is tough; the leadership team of every company should step up and take the company along with. Every manager should be part of the change and really motivate the team to deliver. The difficult times would throw up the need for efficient leadership.
What impressed me about MindTree is though they are hurt by the market conditions and economic slowdown; however you can feel the vibration where the leadership team and management are confident about beating the slump. This confidence, if articulated down to each individual of the company, it would make team to stand up and fight.
In “Go kiss the world”, Subrato Bagchi has mentioned, during the technology bubble burst in 2000-01; if there was no able leadership of Ashok Sotta, the MindTree might have been closed then and there itself.
I feel in difficult times, management should stand up and take the risk and take everyone along by sheer motivation. This is what management gurus’ call, “Leading from the Front”. That’s what we need.
I can’t stop getting motivated from one of the “Lead India” video; which was circulated some time back. The message is what I liked and get motivated to push harder.
Monday, June 22, 2009
New Age marketing: The power of Zoozoo
This year IPL; in addition to the cricketing entertainment, created other news as well, the Vodafone Zoozoos. The cute, cuddly characters that featured in a series of 29 commercials that ran right through the IPL matches suddenly caught the imagination of the public.
Three other telecom companies ran strong brand campaigns — in fact new commercials- during the same period. Airtel created two pieces of communication leveraging the chemistry of Vidya Balan and Madhavan. Idea leveraged their tie-up with the Mumbai Indians to run an interactive campaign of talking to the stars. Aircel aired their MS Dhoni advertisement of ‘aur bolo’. Yet the animated Zoozoos became celebrities in their own rights and outdid the ‘celebrity’ campaigns. They popped up finally in the stands during the finals of IPL; there were lakhs of entries about them in the blogosphere. The Vodafone Zoozoos were more than an advertising piece; they created buzz for themselves that increased the campaign’s impact manifold!
Borrowing from the cartoon world, they appeal to the child in most of us — yet the contexts and situations in which they are placed and the services they sell are so adult and real. Rounded edges, weird sounds yet decipherable language, and fluidity of movement add to the ‘innocence of feelings’ in a world that is getting more and more ‘manipulative and angular’ in thought.
The fact that the Zoozoos outdid well-known celebrities this season re-confirms that advertising cut-through is not dependant on the use of known faces. A strong campaign can create celebrities and the Zoozoos provide Vodafone with characters that can not only become brand mascots but also be converted into merchandising that can be monetized. In fact, that’s the unique power of animated characters, eg Disney ones — they are brands in search of products — slap them onto anything connected especially to children and the price goes up.
It will be a good lesson for all those companies who spend huge amount to catch the eyeballs. This is sheer example of thinking outside the box.
Three other telecom companies ran strong brand campaigns — in fact new commercials- during the same period. Airtel created two pieces of communication leveraging the chemistry of Vidya Balan and Madhavan. Idea leveraged their tie-up with the Mumbai Indians to run an interactive campaign of talking to the stars. Aircel aired their MS Dhoni advertisement of ‘aur bolo’. Yet the animated Zoozoos became celebrities in their own rights and outdid the ‘celebrity’ campaigns. They popped up finally in the stands during the finals of IPL; there were lakhs of entries about them in the blogosphere. The Vodafone Zoozoos were more than an advertising piece; they created buzz for themselves that increased the campaign’s impact manifold!
Borrowing from the cartoon world, they appeal to the child in most of us — yet the contexts and situations in which they are placed and the services they sell are so adult and real. Rounded edges, weird sounds yet decipherable language, and fluidity of movement add to the ‘innocence of feelings’ in a world that is getting more and more ‘manipulative and angular’ in thought.
The fact that the Zoozoos outdid well-known celebrities this season re-confirms that advertising cut-through is not dependant on the use of known faces. A strong campaign can create celebrities and the Zoozoos provide Vodafone with characters that can not only become brand mascots but also be converted into merchandising that can be monetized. In fact, that’s the unique power of animated characters, eg Disney ones — they are brands in search of products — slap them onto anything connected especially to children and the price goes up.
It will be a good lesson for all those companies who spend huge amount to catch the eyeballs. This is sheer example of thinking outside the box.
Sunday, June 14, 2009
Recession, Employee discontent and economic recovery.
Debate has started everywhere in the world so as to whether or not the green shots of economic recovery are real, whether they are sustainable and how soon the recession would over. I am not sure, if the employee discontent and low motivation level of employees have been discussed in equal eager. I am also not sure, if high employee discontent has been recognized as the issue we need to handle.
There are two hard facts; first the employee discontent across the globe, across industry is so high that this level of discontent was not experienced in last quarter of century or so. Second, today’s corporate leaders, who have been developed their careers during the last twenty-five years or so, have little or no direct experience in handling serious employee discontent. This would, in my opinion, create a larger management issue when economic recovery starts to roll.
For example, Arcelor Mittal curtailed its European steel production by half in view of the market conditions. During the annual share holder’s meeting in May this year at company headquarters, 100 odd works attacked the company headquarters. Police has to be called to control the mob. This is in spite the fact that Arcelor Mittal had not taken any major lay-offs. Also in March this year, Sony France workers took hostile of its plant CEO and kept him overnight in the factory.
There are so many examples of recent past, in India and even in rest of the world, where employee discontent has out broken. I personally feel, recent Australian out broke on Indian students and workers are the example of that as well.
Assuming that employee discontent might spoil the economic recovery; thing we need to think about it is what corporate leaders can do about it?
The solution is tantalizingly simple, but requires a huge mindset change. Start treating people like people again.
With rise of software industry, the culture of labor union has reduced, thus labor issues have been reduced from corporate leaders agenda. (I am not arguing to form a labor union here, but trying to point out the shift in the scene and priorities. Though HR regained the importance like never before with software industry). Also, more line managers should realize that HR is the job of line managers and not the HR department alone, have personal connection with your team, understand the pains he/she is going through, and have personal touch to all your answers and solutions.
And every manager should begin this right now!
There are two hard facts; first the employee discontent across the globe, across industry is so high that this level of discontent was not experienced in last quarter of century or so. Second, today’s corporate leaders, who have been developed their careers during the last twenty-five years or so, have little or no direct experience in handling serious employee discontent. This would, in my opinion, create a larger management issue when economic recovery starts to roll.
For example, Arcelor Mittal curtailed its European steel production by half in view of the market conditions. During the annual share holder’s meeting in May this year at company headquarters, 100 odd works attacked the company headquarters. Police has to be called to control the mob. This is in spite the fact that Arcelor Mittal had not taken any major lay-offs. Also in March this year, Sony France workers took hostile of its plant CEO and kept him overnight in the factory.
There are so many examples of recent past, in India and even in rest of the world, where employee discontent has out broken. I personally feel, recent Australian out broke on Indian students and workers are the example of that as well.
Assuming that employee discontent might spoil the economic recovery; thing we need to think about it is what corporate leaders can do about it?
The solution is tantalizingly simple, but requires a huge mindset change. Start treating people like people again.
With rise of software industry, the culture of labor union has reduced, thus labor issues have been reduced from corporate leaders agenda. (I am not arguing to form a labor union here, but trying to point out the shift in the scene and priorities. Though HR regained the importance like never before with software industry). Also, more line managers should realize that HR is the job of line managers and not the HR department alone, have personal connection with your team, understand the pains he/she is going through, and have personal touch to all your answers and solutions.
And every manager should begin this right now!
Monday, June 08, 2009
After many stumbles, fall of an American giant
It is a company that helped lift hundreds of thousands of American workers into middle class. It transformed Detroit in to main spot in the world economy, as symbol of American talent for innovation. It built luxury cars and car for every purse & purpose; which led to a saying “What is good for GM, is good for America”.
And now it is filing for bankruptcy, something that would have been unthinkable few years back.
It is the story of GM.
Rarely has a company fallen so far and so fast as General Motors. And while its bankruptcy appeared increasingly likely in recent weeks, the arrival of that very moment still is a staggering blow.
Analysts say, GM began along and slow process of undermining itself long back. It’s strengths like rigid structure that provided discipline earlier on, became the weakness and it lost its feel for reading the American car market it helped create as Japanese car makers took away its most loyal customers as GM was going through serious of strategic and cultural missteps starting from 1960s.
GM gave in to union demands in 1990 and created a program that paid workers even if plants were not running; forcing it to build the cars and trucks it could never able to sell. Thus GM often resorted to a practice called “launch and leave”, spending billions upfront to bring vehicles to market, but then fail to keep supporting them with sustained advertising. With market share shrinking, GM could not give its multiple brands and car models the individual attention which eventually helped Honda attract customers to Accord and Toyota to its Camry. It also lost interest and the patience and effort required to position the brands in the correct market.
During all these years, GM didn’t notice the change in the market place, where Japanese and Korean automakers are bringing- in more fuel efficient, less maintenance vehicles by focusing on innovation; but kept on building its gas guzzlers. Consumers started blaming GM for sub-par vehicles. They might have given them second, perhaps third chance, but eventually shifted the loyalty. Result of this? Through April of this year, GM’s market share was 19%, a steep drop from its peak of 54% in 1954.
This moment would reverberate beyond GM’s headquarters in Detroit, to its factory towns in Indiana, Michigan, Louisiana and rest of the world, as GM was truly a global company having presence in lot of countries.
Ultimately GM would come out of chapter 11, might form a new company which is sleek and might focus on fewer and better brands, but the bankruptcy filing is a fall of true giant, which created and ruled the industry for several years.
And now it is filing for bankruptcy, something that would have been unthinkable few years back.
It is the story of GM.
Rarely has a company fallen so far and so fast as General Motors. And while its bankruptcy appeared increasingly likely in recent weeks, the arrival of that very moment still is a staggering blow.
Analysts say, GM began along and slow process of undermining itself long back. It’s strengths like rigid structure that provided discipline earlier on, became the weakness and it lost its feel for reading the American car market it helped create as Japanese car makers took away its most loyal customers as GM was going through serious of strategic and cultural missteps starting from 1960s.
GM gave in to union demands in 1990 and created a program that paid workers even if plants were not running; forcing it to build the cars and trucks it could never able to sell. Thus GM often resorted to a practice called “launch and leave”, spending billions upfront to bring vehicles to market, but then fail to keep supporting them with sustained advertising. With market share shrinking, GM could not give its multiple brands and car models the individual attention which eventually helped Honda attract customers to Accord and Toyota to its Camry. It also lost interest and the patience and effort required to position the brands in the correct market.
During all these years, GM didn’t notice the change in the market place, where Japanese and Korean automakers are bringing- in more fuel efficient, less maintenance vehicles by focusing on innovation; but kept on building its gas guzzlers. Consumers started blaming GM for sub-par vehicles. They might have given them second, perhaps third chance, but eventually shifted the loyalty. Result of this? Through April of this year, GM’s market share was 19%, a steep drop from its peak of 54% in 1954.
This moment would reverberate beyond GM’s headquarters in Detroit, to its factory towns in Indiana, Michigan, Louisiana and rest of the world, as GM was truly a global company having presence in lot of countries.
Ultimately GM would come out of chapter 11, might form a new company which is sleek and might focus on fewer and better brands, but the bankruptcy filing is a fall of true giant, which created and ruled the industry for several years.
Sunday, May 24, 2009
Back from Vacation
It was very good 10 days break, had a very good time. All these days while I was at my native, it rained and I felt like I am in some hill station.
Had relaxed time; spent time to connect with new people and did lot of reading.
Much required break, but now I am started feeling like “Welcome back to reality”.
Had relaxed time; spent time to connect with new people and did lot of reading.
Much required break, but now I am started feeling like “Welcome back to reality”.
Sunday, May 03, 2009
"The last lecture"
This is the novel which I just completed reading; and let me tell you this, it touched me more than any other book of recent past.
Each year at a series known as The Last Lecture, a Carnegie Mellon University faculty member is asked to deliver what would hypothetically be a final speech to their students before dying. It is a wonderful tradition in which both speaker and listeners take a moment to reflect upon what matters most in this life. In September 2007, the speaker, 47-year-old computer science professor and father of three, Randy Pausch, didn't have to imagine that he was confronting his imminent demise because, in fact, he was. Pausch had been diagnosed with pancreatic cancer and, at the time of his Last Lecture, had only been given three to six months to live. Pausch's speech, entitled "Achieving Your Childhood Dreams," was every bit as upbeat and inspirational as the man himself. Rather than focusing on dying, it was a speech about living, about achieving one's dreams and enabling the dreams of others, about truly living each day as though it were your last.
It was about the importance of overcoming obstacles, of enabling the dreams of others, of seizing every moment (because as Randy puts it "time is all you have...and you may find one day that you have less than you think"). It was a summation of everything Randy had come to believe. It was about living.
In this book, Randy Pausch has combined the humor, inspiration and intelligence that made his lecture such a phenomenon and given it an indelible form. It is a book that will be shared for generations to come.
Why this touches most is, Randy knows that he is going to die; but puts a brave fight and virtually prepares his entire family for life without him. He spends the available time very precisely. While reading, you could imagine through as what might have been going through in the entire family.
"We cannot change the cards we are dealt, just how we play the hand."
--Randy Pausch
Each year at a series known as The Last Lecture, a Carnegie Mellon University faculty member is asked to deliver what would hypothetically be a final speech to their students before dying. It is a wonderful tradition in which both speaker and listeners take a moment to reflect upon what matters most in this life. In September 2007, the speaker, 47-year-old computer science professor and father of three, Randy Pausch, didn't have to imagine that he was confronting his imminent demise because, in fact, he was. Pausch had been diagnosed with pancreatic cancer and, at the time of his Last Lecture, had only been given three to six months to live. Pausch's speech, entitled "Achieving Your Childhood Dreams," was every bit as upbeat and inspirational as the man himself. Rather than focusing on dying, it was a speech about living, about achieving one's dreams and enabling the dreams of others, about truly living each day as though it were your last.
It was about the importance of overcoming obstacles, of enabling the dreams of others, of seizing every moment (because as Randy puts it "time is all you have...and you may find one day that you have less than you think"). It was a summation of everything Randy had come to believe. It was about living.
In this book, Randy Pausch has combined the humor, inspiration and intelligence that made his lecture such a phenomenon and given it an indelible form. It is a book that will be shared for generations to come.
Why this touches most is, Randy knows that he is going to die; but puts a brave fight and virtually prepares his entire family for life without him. He spends the available time very precisely. While reading, you could imagine through as what might have been going through in the entire family.
"We cannot change the cards we are dealt, just how we play the hand."
--Randy Pausch
Sunday, April 26, 2009
Rural India is roaring!
If you dissect the quarterly/yearly results of Hero Honda; which were published last week; one this is very clear, it seems recession has not impacted Hero Honda and there is a growth reported by them. More importantly, they have achieved this through growth in rural India.
Less affected by recession, the rural economy is spending much of the higher income derived from a good winter crop of grains and pulses, high minimum support price from Government and the relief from the government waiver of farm loans.
The general election (business standard has predicted that 2009 General election would contribute 0.3% to GDP), summer holiday season, marriages and even the effect of sixth pay commission hikes; all are aiding a massive jump in sales.
The strength of rural economy is getting reflected in Fast moving consumer goods (FMCG), cement and telecom; in addition to two wheelers and tractors.
All of a sudden; rural consumer is of great importance for India Inc now. The marketing teams are busy in defining the strategy to attract rural attention. Interesting enough; rural market is untapped in many areas and there is lot of room for the business for all. Due to media network, even rural market is aware of the new trends and products. And unlike his urban counterpart; rural consumer is ready to spend and he need not to bother about his job loss and EMI to pay every month.
Unfortunately, our business (IT and ITES) doesn’t have an exposure to rural India!
Less affected by recession, the rural economy is spending much of the higher income derived from a good winter crop of grains and pulses, high minimum support price from Government and the relief from the government waiver of farm loans.
The general election (business standard has predicted that 2009 General election would contribute 0.3% to GDP), summer holiday season, marriages and even the effect of sixth pay commission hikes; all are aiding a massive jump in sales.
The strength of rural economy is getting reflected in Fast moving consumer goods (FMCG), cement and telecom; in addition to two wheelers and tractors.
All of a sudden; rural consumer is of great importance for India Inc now. The marketing teams are busy in defining the strategy to attract rural attention. Interesting enough; rural market is untapped in many areas and there is lot of room for the business for all. Due to media network, even rural market is aware of the new trends and products. And unlike his urban counterpart; rural consumer is ready to spend and he need not to bother about his job loss and EMI to pay every month.
Unfortunately, our business (IT and ITES) doesn’t have an exposure to rural India!
Sunday, April 19, 2009
‘Marriage made in Heaven’- Merger of Satyam and TechMahindra
This week saw a major deal is Indian IT industry where TechMahindra took over management control of Satyam. It will be a good relief for Satyam employees; they are in to more stable hands now; there was good amount of instability over last 3 months.
Also, appreciable point is how new board of Satyam and the Indian Government acted quickly to safeguard the Satyam employees, customers and shareholders. We saw a real quick decision making in this entire process; which is really commendable.
However, this deal is more strategic for TechMahindra; let’s see how;
Geography Expansion: TechMahindra is very strong in Europe and Satyam is strong in APAC and US. This merger will help TechMahindra to easily expand in to US and APAC, that too with strong customer base including GE, Cisco. This also helps to go beyond British Telecom in terms of new business and try cross selling in other existing customers. This is huge advantage. You can’t imagine the pain in building US operations from the scratch.
Business Expansion: TechMahindra is known for its telecom domain. Satyam is strong in SAP [About 45% of business] and Engineering Services business and BIFS. Thus TechMahindra will get built up practices of SAP and Engineering services. This is much required diversification.
Employee Base: Satyam has pretty strong sales force and outstanding techies, it is said, and some of the key business managers have already left though.
Thus, this deal seems to be a great fit and appears to be more strategic for TechMahindra. It leaped ahead as 4th largest IT company in India. Off course any deal comes with the challenge of managing the merger and management has to work towards aligning both the companies. Also, we should not forget the risk of liabilities Satyam might carry, no body knows about these liabilities as of now.
However, on paper it looks like; as what TechMahindra CEO put it ‘Marriage made in Heaven’.
Also, appreciable point is how new board of Satyam and the Indian Government acted quickly to safeguard the Satyam employees, customers and shareholders. We saw a real quick decision making in this entire process; which is really commendable.
However, this deal is more strategic for TechMahindra; let’s see how;
Geography Expansion: TechMahindra is very strong in Europe and Satyam is strong in APAC and US. This merger will help TechMahindra to easily expand in to US and APAC, that too with strong customer base including GE, Cisco. This also helps to go beyond British Telecom in terms of new business and try cross selling in other existing customers. This is huge advantage. You can’t imagine the pain in building US operations from the scratch.
Business Expansion: TechMahindra is known for its telecom domain. Satyam is strong in SAP [About 45% of business] and Engineering Services business and BIFS. Thus TechMahindra will get built up practices of SAP and Engineering services. This is much required diversification.
Employee Base: Satyam has pretty strong sales force and outstanding techies, it is said, and some of the key business managers have already left though.
Thus, this deal seems to be a great fit and appears to be more strategic for TechMahindra. It leaped ahead as 4th largest IT company in India. Off course any deal comes with the challenge of managing the merger and management has to work towards aligning both the companies. Also, we should not forget the risk of liabilities Satyam might carry, no body knows about these liabilities as of now.
However, on paper it looks like; as what TechMahindra CEO put it ‘Marriage made in Heaven’.
Sunday, April 12, 2009
Tata Son’s US ambassador
Until I read this interview on India Knowledge @ Wharton; I didn’t even know that Indian business houses can think about such a strategic move.
To me it seems like a fantastic idea as I believe in building the relationships is the way to build business in any country. This is a fantastic move by Tatas having ‘an ambassador’ in US; from where they are having bigger business coming from.
The role definition is “I represent the views of the Tatas -- the objectives and goals of the Tatas in the United States. I interact with government officials, with regulators, with legislators [and] with people from the Executive Branch on some issues of concern and interest to the Tatas. I also report back to Tata headquarters -- to Bombay -- about what I hear in Washington, what the trends are, what people are thinking about India, what people are thinking about Indian business. I try to be a interlocutor, if you will, between the Tatas in India and the United States government in particular, but also with the population [or] America at large -- meaning with academia, with American business, with American think-tanks -- to sort of explain one to the other”
Link to the full interview is below; but I am pretty much impressed by this investment by Tatas.
Link to complete interview
True example of how visionaries always think differently!
To me it seems like a fantastic idea as I believe in building the relationships is the way to build business in any country. This is a fantastic move by Tatas having ‘an ambassador’ in US; from where they are having bigger business coming from.
The role definition is “I represent the views of the Tatas -- the objectives and goals of the Tatas in the United States. I interact with government officials, with regulators, with legislators [and] with people from the Executive Branch on some issues of concern and interest to the Tatas. I also report back to Tata headquarters -- to Bombay -- about what I hear in Washington, what the trends are, what people are thinking about India, what people are thinking about Indian business. I try to be a interlocutor, if you will, between the Tatas in India and the United States government in particular, but also with the population [or] America at large -- meaning with academia, with American business, with American think-tanks -- to sort of explain one to the other”
Link to the full interview is below; but I am pretty much impressed by this investment by Tatas.
Link to complete interview
True example of how visionaries always think differently!
Sunday, April 05, 2009
One Last Chance for Detroit
It used to be said that “what is good for General Motors is good for the USA”. That is not true any more. The company now accounts less than a fifth of all car sales in the US, while other companies produce and sell better, smaller, fuel-efficient cars that market might likes. And the word “bankruptcy” might have finally been uttered in GM context by president Obama; though he wants it to be “managed bankruptcy”; which means a safety net for employees and retires but not to the management.
Full bankruptcy of GM will pretty much destroys what remains of the company; and be a political bomb in terms of its psychological impact on the entire nation. So, there is one more chance given to the management; after CEO is been fired; in the hope that the union and bond-holders will make financial sacrifices needed to make company viable.
Now, new management at GM has to produce a plan for restructuring itself with-in next 60 days. But given the past failures of such plans; including the ones which was rejected last weekend by White House auto task force; it would be risky to assume that all will go well with-in next 60 days. This would be a huge task at hand; especially you are trying to revive a huge company like GM and that too in 60 days of stipulated period of time.
I think, this whole government’s protection net might act as an interim solution to a longer problem. It can’t solve the long term problems for sure. The issue with US auto industry is; over the years they produced over-priced gas guzzlers that have a declining market. Or as a management consultant would have put it; the companies are out of sync with the market.
In GM this was no secret, yet the company did little to address the issue and continue to focus on big gas-guzzlers because they were more profitable at that time and they thought this might continue. They didn’t notice decline in the profit margins and the sales.
It appears that; this would be one final chance for GM; if not the choice would be either sudden or slow death. If that happens, these 60 days would give us enough time to adjust ourselves to an idea of possible closure; merger or breakup.
Full bankruptcy of GM will pretty much destroys what remains of the company; and be a political bomb in terms of its psychological impact on the entire nation. So, there is one more chance given to the management; after CEO is been fired; in the hope that the union and bond-holders will make financial sacrifices needed to make company viable.
Now, new management at GM has to produce a plan for restructuring itself with-in next 60 days. But given the past failures of such plans; including the ones which was rejected last weekend by White House auto task force; it would be risky to assume that all will go well with-in next 60 days. This would be a huge task at hand; especially you are trying to revive a huge company like GM and that too in 60 days of stipulated period of time.
I think, this whole government’s protection net might act as an interim solution to a longer problem. It can’t solve the long term problems for sure. The issue with US auto industry is; over the years they produced over-priced gas guzzlers that have a declining market. Or as a management consultant would have put it; the companies are out of sync with the market.
In GM this was no secret, yet the company did little to address the issue and continue to focus on big gas-guzzlers because they were more profitable at that time and they thought this might continue. They didn’t notice decline in the profit margins and the sales.
It appears that; this would be one final chance for GM; if not the choice would be either sudden or slow death. If that happens, these 60 days would give us enough time to adjust ourselves to an idea of possible closure; merger or breakup.
Sunday, March 29, 2009
WOW (War on waste) - A Business Idea?
WOW (War on Waste) - A Business Idea?
Our WOW initiative made me to thing on some business plan.
First things first; Waste management with Indian context has no meaning. We tend to throw away the Waste as per our wish and there is no proper management of that Waste.
For example, Waste collection in Western countries happen systematically, where the paper, plastic, glass are collected separately and handled separately. Also, there Waste collection is so systematic, that you will not find more garbage on the streets. Also the recycling facilities are of higher standards there by ensuring the garbage is being cycled properly.
Cut to India, only 14% of the Waste in India is properly collected and recycled, compared to 70% in the west. The result we see all over the streets!
The main issue is, our wastage collection is not managed properly and India Inc has not noticed the potential of this opportunity. If managed as corporate it can be monetized. Our wastage collection is loosely spread and there is no management in that.
Indian paper industry imports Waste from West to produce the required paper and Waste collected in India feeds only 17% of the demand of this Industry. (Rest all is either imported or supplied through tree cutting) So, look at the opportunity!!
So, if a Pan India company can manage the Waste all over the country and streamline the operations, it will be a huge industry. Also, it will serve the benefit of environment as garbage collection will be clean, there by reducing the diseases spreading because of bad environment.
Our WOW initiative made me to thing on some business plan.
First things first; Waste management with Indian context has no meaning. We tend to throw away the Waste as per our wish and there is no proper management of that Waste.
For example, Waste collection in Western countries happen systematically, where the paper, plastic, glass are collected separately and handled separately. Also, there Waste collection is so systematic, that you will not find more garbage on the streets. Also the recycling facilities are of higher standards there by ensuring the garbage is being cycled properly.
Cut to India, only 14% of the Waste in India is properly collected and recycled, compared to 70% in the west. The result we see all over the streets!
The main issue is, our wastage collection is not managed properly and India Inc has not noticed the potential of this opportunity. If managed as corporate it can be monetized. Our wastage collection is loosely spread and there is no management in that.
Indian paper industry imports Waste from West to produce the required paper and Waste collected in India feeds only 17% of the demand of this Industry. (Rest all is either imported or supplied through tree cutting) So, look at the opportunity!!
So, if a Pan India company can manage the Waste all over the country and streamline the operations, it will be a huge industry. Also, it will serve the benefit of environment as garbage collection will be clean, there by reducing the diseases spreading because of bad environment.
Sunday, March 22, 2009
One Man Marketing Army
I thought of shifting a bit and discuss a non-corporate profile; who thinks like a corporate.
I am talking about Amirkhan, one of the people who I like because of his hard work and dedication and passion (Other person I like is Sachin Tendulkar, because of his sheer ability to improvise his game). Amir seems to do his homework completely before he gets on to shooting and classic example is Tare Zameen Par, where this homework was quite evident.
Have you noticed marketing effort around Ghajani? First there was a youth campaign around with his trendy hairstyle and then there was a serious of releases of Samsung mobiles, which he has used in the movie. The result? Gajani was run away success and this marketing effort was successful in creating the much required hype about the movie.
Also, Amir believes in quality and it is said he never endorses any brand if he doesn’t believe in its quality. His involvement is so much; it is said that you will see him using Titan watch, having Coca-Cola during breaks, having Tata Sky at home for watching TV, talking in Samsung mobile! (These are the brands he endorses) This is sheer dedication towards one brand and living what he says.
Let me not try to get in to review of his movies, my intention was to point out the marketing ability he has mastered recently and his involvement in making this marketing machinery works. And perhaps it appears that he does it single handedly and doesn’t involve any marketing research firm.
This amazes me!
I am talking about Amirkhan, one of the people who I like because of his hard work and dedication and passion (Other person I like is Sachin Tendulkar, because of his sheer ability to improvise his game). Amir seems to do his homework completely before he gets on to shooting and classic example is Tare Zameen Par, where this homework was quite evident.
Have you noticed marketing effort around Ghajani? First there was a youth campaign around with his trendy hairstyle and then there was a serious of releases of Samsung mobiles, which he has used in the movie. The result? Gajani was run away success and this marketing effort was successful in creating the much required hype about the movie.
Also, Amir believes in quality and it is said he never endorses any brand if he doesn’t believe in its quality. His involvement is so much; it is said that you will see him using Titan watch, having Coca-Cola during breaks, having Tata Sky at home for watching TV, talking in Samsung mobile! (These are the brands he endorses) This is sheer dedication towards one brand and living what he says.
Let me not try to get in to review of his movies, my intention was to point out the marketing ability he has mastered recently and his involvement in making this marketing machinery works. And perhaps it appears that he does it single handedly and doesn’t involve any marketing research firm.
This amazes me!
Sunday, March 15, 2009
It is Hero Honda vs. Honda now!
Honda Motorcycles and Scoters Ltd (HMSI) the fully owned Honda subsidiary, is now relatively small player in Indian motorcycle market with 14 percent share, selling mostly large engine capacity bikes. It also sells more scoters than bikes and it’s Activa scoter is a run away success.
This is changing fast. For, HMSI is taking on its own long-term partner in India, Hero Honda (In which Honda has 26 percent stake) and in the latter’s key area of dominance, the 100 cc mobike market. The Honda company is working on to get in to the same segment and hopes to get the market capture quickly, with it’s focus on quality. HMSI wants to make sure, the bike sales is more than its scoter sale. Which would be a big change from its current mix, where scoters are 65% of its entire sale.
It is quite evident that, this entry might give a sleepless night for Hero Honda, which enjoys 80% of the market share in 100 cc segment. And this segment also accounts about 60% of Hero Honda’s entire sales.
At the moment, both the players are not affecting each other and infact both are eating in to Bajaj’s market share. Recent data shows that Hero Honda’s sale was up 24 percent (Decent job considering the current economy and one of few companies who reported Q-o-Q increase in sales, how they did it is pretty interesting) and HMSI reported a jump of 14 percent.
Quite interesting!
Actually this is a clear example as how transparency works for benefit of both the parties. Each other are not affected because they know which segment they are targeting. Also, two companies have a committee which knows in advance what the other is planning to launch in India market, so that clashes can be avoided.
Notable point is 100 cc market has many segments and they would operate in areas where their partners do not. If we divide 100 cc segment in to parts starting from entry level to deluxe level, there is potential in every segment. And HMSI and Honda have clear demarcation as who will be in which segment. This helps to avoid competition among them selves and thus they are eating on Bajaj’s market share.
Personally speaking, there is lot of learning in this strategy if I apply this to our business operations. And I guess, we are in middle of similar situation and we need to appreciate moral of this strategy and see how all will be benefited.
This is changing fast. For, HMSI is taking on its own long-term partner in India, Hero Honda (In which Honda has 26 percent stake) and in the latter’s key area of dominance, the 100 cc mobike market. The Honda company is working on to get in to the same segment and hopes to get the market capture quickly, with it’s focus on quality. HMSI wants to make sure, the bike sales is more than its scoter sale. Which would be a big change from its current mix, where scoters are 65% of its entire sale.
It is quite evident that, this entry might give a sleepless night for Hero Honda, which enjoys 80% of the market share in 100 cc segment. And this segment also accounts about 60% of Hero Honda’s entire sales.
At the moment, both the players are not affecting each other and infact both are eating in to Bajaj’s market share. Recent data shows that Hero Honda’s sale was up 24 percent (Decent job considering the current economy and one of few companies who reported Q-o-Q increase in sales, how they did it is pretty interesting) and HMSI reported a jump of 14 percent.
Quite interesting!
Actually this is a clear example as how transparency works for benefit of both the parties. Each other are not affected because they know which segment they are targeting. Also, two companies have a committee which knows in advance what the other is planning to launch in India market, so that clashes can be avoided.
Notable point is 100 cc market has many segments and they would operate in areas where their partners do not. If we divide 100 cc segment in to parts starting from entry level to deluxe level, there is potential in every segment. And HMSI and Honda have clear demarcation as who will be in which segment. This helps to avoid competition among them selves and thus they are eating on Bajaj’s market share.
Personally speaking, there is lot of learning in this strategy if I apply this to our business operations. And I guess, we are in middle of similar situation and we need to appreciate moral of this strategy and see how all will be benefited.
Sunday, March 08, 2009
Mahabharata, Psychology and Need for living right.
More I watch Mahabharata, more I hear from Krishna’s character in that, I become emotional about life and teachings of our Vedic scriptures.
This weekend, I started thinking about important of being correct and living a correct life, without harming any one. It is important to pass on that knowledge or ‘Sanskar’ to our kids.
Life is complex and there is no easy shortcut for it. You have to face through all the issues; but where we tend to do mistakes is of not understanding the importance of values in our lives. We take our life granted, there by creating problems for ourselves.
I know, it is a bit of emotional, philosophical and spiritual; but right now my mind is full of life’s lessons, given by our Vedic scripts.
Is there any better gift to next generation than this?
This weekend, I started thinking about important of being correct and living a correct life, without harming any one. It is important to pass on that knowledge or ‘Sanskar’ to our kids.
Life is complex and there is no easy shortcut for it. You have to face through all the issues; but where we tend to do mistakes is of not understanding the importance of values in our lives. We take our life granted, there by creating problems for ourselves.
I know, it is a bit of emotional, philosophical and spiritual; but right now my mind is full of life’s lessons, given by our Vedic scripts.
Is there any better gift to next generation than this?
Sunday, March 01, 2009
Indian IT: Trouble Today, but Optimism for the Long Term
Knowledge@Wharton has an article on National Association of Software and Service Companies (NASSCOM) India Leadership Forum held in Mumbai in mid-February.
This is abstract of what was being discussed in that forum.
This is certainly good news for Indian IT industry that long term looks good. But, the article also talks about need for business model innovation and ability to adapt to the change. Off course that comes with lot of risks.
Long one, but lot of 'gnyan' .
http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4354
This is abstract of what was being discussed in that forum.
This is certainly good news for Indian IT industry that long term looks good. But, the article also talks about need for business model innovation and ability to adapt to the change. Off course that comes with lot of risks.
Long one, but lot of 'gnyan' .
http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4354
"The Cable Guy"
I watched a movie this weekend, The Cable Guy. This is the story of a cable person; who’s growing up as a child was a problem. This movie resolves around social issues if upbringing of a child is not proper.
The movie unfolds around a person, Steven, who happened to meet this cable guy and starts talking to him as friend. Cable guy didn’t understand what is friendship means and starts crossing the limit.
It is very good movie and gives lot of insights of why upbringing of a child is most important.
The movie unfolds around a person, Steven, who happened to meet this cable guy and starts talking to him as friend. Cable guy didn’t understand what is friendship means and starts crossing the limit.
It is very good movie and gives lot of insights of why upbringing of a child is most important.
Sunday, February 22, 2009
Indian Aviation completes it’s full circle.
In 1995, Singapore Airlines and Tatas came together and proposed to start domestic airline. The idea was to invest jointly and have few airplanes to begin with, and expand eventually.
But this idea ran in to troubled waters as both home grown domestic players and government opposed this idea. The reason; the international carriers (Like Singapore airlines) have deep pockets and world class experience and domestic carriers can’t compete with them.
Fast forward fourteen years; Indian aviation seems to have completed its circle. With recent FDI changes, government has proposed to open investments from foreign airlines; which was being pushed by domestic airlines for some time now.
The reason seems to be obvious. Private carriers, without any foreign airline competition; have been burning the cash. The cumulative looses of these private players sums up to about $2 Billion. And they are in need of additional funding to keep the things moving. Given the global market situation; it is impossible to raise fresh funds; so these players are desperate for funding.
With most of the airports being run by private operators, who have collaboration with international players, it doesn’t make sense to draw the line. In case of airport operators, even 100% direct investment is allowed.
More importantly; in the recent part, almost all countries have opened up the direct investment in airlines industry. One of the arguments in 1995 was that not most of the countries have this liberalized policy.
I tend to draw parallels between aviation and telecom sectors in India. Kind of telecom revolution we are experiencing was possible mainly because of international players like SingTel and Vadafone among others, who took equity stakes in Indian players and helped the industry grow. Telecom has 74% direct investment policy.
Lets hope direct investment in India in aviation sector brings up required competition and revolution; so that common people like you and me can fly easily, without hurting the purse!
But this idea ran in to troubled waters as both home grown domestic players and government opposed this idea. The reason; the international carriers (Like Singapore airlines) have deep pockets and world class experience and domestic carriers can’t compete with them.
Fast forward fourteen years; Indian aviation seems to have completed its circle. With recent FDI changes, government has proposed to open investments from foreign airlines; which was being pushed by domestic airlines for some time now.
The reason seems to be obvious. Private carriers, without any foreign airline competition; have been burning the cash. The cumulative looses of these private players sums up to about $2 Billion. And they are in need of additional funding to keep the things moving. Given the global market situation; it is impossible to raise fresh funds; so these players are desperate for funding.
With most of the airports being run by private operators, who have collaboration with international players, it doesn’t make sense to draw the line. In case of airport operators, even 100% direct investment is allowed.
More importantly; in the recent part, almost all countries have opened up the direct investment in airlines industry. One of the arguments in 1995 was that not most of the countries have this liberalized policy.
I tend to draw parallels between aviation and telecom sectors in India. Kind of telecom revolution we are experiencing was possible mainly because of international players like SingTel and Vadafone among others, who took equity stakes in Indian players and helped the industry grow. Telecom has 74% direct investment policy.
Lets hope direct investment in India in aviation sector brings up required competition and revolution; so that common people like you and me can fly easily, without hurting the purse!
Sunday, February 15, 2009
End of Indian Retail??
Subhiksha, one of the leading Indian retail stores, which re-invented the retail business model with its no-frill store formats, is in news in recent months/weeks. It has not paid salary to its employees since October, vendors have not been paid and the operation is standstill.
With absolutely no encouraging news from any of Indian retail stores (Future group has been better comparatively) many have already started writing off Indian retail phenomenon. In my opinion it is not a correct thing to do, and we need to keep some fundamental things in mind before we re-evaluate Indian retail opportunity.
Firstly, India is still experiencing strongest economic growth since last 60 years, with 7 percent GDP in 2008-09 and perhaps between 6 to 7 in 2009-10. This growing economy throws many new opportunities. Secondly, modern retain still accounts only around 7 per cent of the total retail channel in India, still dominated by pop-and-mom stores. Thirdly, the consumer spending pattern is consistently shifting and mall mania has started creeping in. So Indian retail story is intact.
Having these factors; why Subhiksha (And by large retail players) ran in to problems?
Though, Subhiksha had tailor made business plan, but the biggest mistake probably was not building efficient supply chain and super-efficient retail operations organization. This is pretty much required to compete with next door Kirana shops and more even it is margin game. There was no financial and management investment in this area.
Also, Subhiksha tried to grow very fast. In this quest of growth, the basic paradigm of retail seems to be forgotten. Be it supply chain efficiency, optimized store location, store rentals or enhanced customer service which makes customers loyal.
I will go back to basic of what has been taught in B-school, keeping the fundamentals correct in business. There should be a close co-relation between operation and expansion and if we try to focus on only one thing at any given point in time, it is for sure we will run in to troubled waters.
With absolutely no encouraging news from any of Indian retail stores (Future group has been better comparatively) many have already started writing off Indian retail phenomenon. In my opinion it is not a correct thing to do, and we need to keep some fundamental things in mind before we re-evaluate Indian retail opportunity.
Firstly, India is still experiencing strongest economic growth since last 60 years, with 7 percent GDP in 2008-09 and perhaps between 6 to 7 in 2009-10. This growing economy throws many new opportunities. Secondly, modern retain still accounts only around 7 per cent of the total retail channel in India, still dominated by pop-and-mom stores. Thirdly, the consumer spending pattern is consistently shifting and mall mania has started creeping in. So Indian retail story is intact.
Having these factors; why Subhiksha (And by large retail players) ran in to problems?
Though, Subhiksha had tailor made business plan, but the biggest mistake probably was not building efficient supply chain and super-efficient retail operations organization. This is pretty much required to compete with next door Kirana shops and more even it is margin game. There was no financial and management investment in this area.
Also, Subhiksha tried to grow very fast. In this quest of growth, the basic paradigm of retail seems to be forgotten. Be it supply chain efficiency, optimized store location, store rentals or enhanced customer service which makes customers loyal.
I will go back to basic of what has been taught in B-school, keeping the fundamentals correct in business. There should be a close co-relation between operation and expansion and if we try to focus on only one thing at any given point in time, it is for sure we will run in to troubled waters.
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