Great

Eternal words that make you feel cherished!

I got a card from CaratLane with these lines...they were lovely enough to share.

Tuesday, December 29, 2009

How business ideas are born

Making changes, as a precursor to moving on to better things is something that most evolving businesses should do intuitively. But waiting for the push comes to shove moment is not the right time to experiment with change but should rather come as a gradual phase and at a steady pace but these early signals should be picked up quickly.

Professor of marketing at Wharton School, Yoram Jerry Wind agrees, "You basically should have a system in place that allows you to continuously challenge your assumptions, challenge your mental models, look for early signals of change in the environment." He explained that's how Starbucks took off because some clever businessmen had the foresight to provide a service that was not there in the US.

Wind told CNBC-TV18, "Howard Schultz went on a trip to Italy and was sitting in a café and it suddenly dawned on him 'Why not create the American equivalent of the café' and that's what led to the creation of the Starbucks experience and the whole phenomenon of success of Starbucks."

He added, "You obviously need a visionary, a person with insight, instinct and the intuition, who says 'Wow this can be a great idea and push it'. At the same time you also want to have companies develop some processes and approaches that allows them to identify when their current model is no longer appropriate."

But all said and done, this kind of decision has to be informed and should not be made in haste. Wind elaborated, "First of all you mentioned competition and it is very important for us to realise that we have to look at competition from outside the industry. If we go back to the Starbucks example, then Maxwell House was a dominant brain at that time. They probably looked at other coffee manufacturers at that time. They never expected competition from a startup like Starbucks and look at the phenomenal success of Starbucks. So looking at the competition is definitely important but broaden your scope."

"There is no substitute for really understanding consumer behaviour. It's funny how consumers behave, even in small segments. That is where I mentioned the weak signals. Because if you look at the average or the big responses, you are missing the little trends and all new trends start with small things.

"In the US, we look at California. Californian consumers are different and very often they are indicative but you need to monitor this and not to discard this type of information. Then there are processes that you can use effectively to try to help you. For example, the process of trying to challenge your assumptions. Do something very simple, ask your manager to indicate what are the assumptions you make in your strategy and lets challenge each one of them."

Country manager, WPP, Ranjan Kapur gives by way of example what Unilever did when faced with competition from Nirma. He said, "I think Unilever has been reactive in the past. I mean what really happened was that they grew up in an era of shortages and brands are never built in era of shortages and their business model was really a distribution business model.

"When competition came up and the markets opened up and lots of people came in, I think they tried to expand their distribution, get into the rural market and cut costs. That was their model."

"It was only in 2001-02, I think, that they realised the power of branding. That's when they went into the power brand thing and in India I think they have 30 brands. And that's really - it was a reaction, the way they were chipped away by local players. I think they didn't even wake up the first time when the signal came from Nirma.

"Nirma produced the detergent in little pits and men and women used to sit there and stir the detergent with caustic soda. They put them in plastic bags, stapled them and sent it out.

"What he (Nirma) realised was that people were looking for cheap products rather than pay for packaging. Anyway, Nirma didn't distribute the product, distributors used to come to them. Nobody recognised that."

Apart from being able to spot the trends early on and challenging assumptions, there is another approach, what Wind calls a "kind of a very powerful approach called 'bring the radicals in'. A great example would be, if you think of IBM a few years back, the major threat for IBM was open source code and the initial reaction when you mentioned that to IBM was that they would immediately bring in all the lawyers and try to sue them. What the research group at IBM did was bring the major proponent of open source to talk with the research group. The result was that they (IBM) were able to change their mental models completely and they designed or brought open source and built over it proprietary products and services that they were selling. So bringing the radical in is a very powerful approach that one can use."

"Another process is a method called idealised design. Idealised design is a process started by Ross Ackoff. A process that primarily says that opposed to the tradition of planning that you have, is where we are now and where we want to go forth, it starts with a radical assumption, which says 'lets assume that our business was destroyed last night'. Now given everything we know today, no futuristic technology, but what we know today. How do we redesign this business without all the constraints and the typical baggage that most business have?"

Kapur explained, "I think if you look at it, there are many who sort of have ridden the wave. You take consumer durable companies, you take electronics. I think if you take MIRC electronics. Take ONIDA for example. All the Indian players were dying. That is the only Indian player which is still there in the top 3."

Moving with the times entails having to adopt new technology but doing it blindly without understanding how consumers are going to use the technology may be disastrous. As Wind puts it, "There is a danger of instead of technology helping to be on the leading edge, you could be on the bleeding edge, which is not good for the company in the long term."

The GEC story was a case in point. It is a very dramatic case of timing where it comes to swapping mental models. Wind agreed, "That is true. It is a great example. In 1996, George Simpson took over General Electric, UK, which is different from the US one. He inherited basically a very stodgy but a very profitable company. His predecessor Arnold Weinstock had a great management system, he ran about 180 companies based on a very strict ratios."

"He was in a less glamorous field. He was in power, he was in defense and electronics and Lord Simpson decided to bet the future on wireless technology and changed the name of the company to Marconi to try to indicate this.

He bet the whole farm on one major change and it did not work. The environment was against him, maybe it was the timing, but he basically went all out after a single vision and the results were disastrous.

And he did not have a portfolio of business protecting him in case the bet was not right, nor did he realise some of the early warning signals that were ready at that time with respect to this industry."

"The result was that a company having a share price of over 12 pounds went to 4 pence a few years later and from a huge cash surplus, when he took over to a huge debt. That is one of the sad stories in terms of an unsuccessful one and the lesson for companies is this - if you really have a bold new vision, first of all have enough safeguards around it and second, don't put all your eggs in one basket and experiment."

At the end of the day, though, it's not organisations but individuals who matter. Wind elaborated, "First of all you have to remember that corporations are made up of individuals and the reality is between 9 & 5 when you are a corporate person, you are still the same person before 9 and after 5, where now you are not a corporate person but an individual. So obviously we are dealing with individuals here. The idea is to try this type of collision and try to see how can we get a better balance between the two and how we can learn from one another."

Written for www.moneycontrol.com

Wednesday, December 16, 2009

Stylish & individualistic homes

Homes are an extension of your personality - believe it or not - which is why people do chose the best possible decor, art, furniture for their homes. So, whatever is your poison, the idea is to do it with some kind of restraint and taste.

This can be tricky especially of you have decided on your home should sport the 'kitchsy' look. That's what restaurateur AD Singh and his wife Sabina Singh seem to have chosen for themselves. This couple have a extremely colourful gola-gaadi in their living which doubles up as a table. Well, they also have revamped an autorickshaw - dumped the front half and the wheels to double up as a loveseat!


Sabina Singh told CNBC-TV18, "Kitsch has to be transcended from the gaudy and basic to something made interesting. So, that has always been my endeavour." She's been inspired by the biggest, kitchsy industry of them all - Bollywood. She's got coasters with Hindi film posters imprinted on them. She's got film posters blown up and decorated with sequins, which she purchased from an arist called Baba Anand.

Their home also has a lot of religious art, which AD Singh confesses he's not a big fan of but all the same, he's got his favourites as well. One is an Imitiaz Dharker painting and another is a bust of Tenzing Norgay (the mountaineer who climbed Everest with Edmund Hillary, which was made by his grandfather.

What's more, the kitchsy look is getting expensive as everyone seems to have cottoned onto the trend. Well, Sabina Singh was among the first, so her instincts may just prove to be right and very lucrative as well.

Italian Inspiration
If homes are meant to make style statements, then the Consulate General of Italy in India, Giuseppe Zaccagnino's home certainly does. This man's walls are covered with art and of the really top class variety. He has been collecting art going back 50 years and in just his living room, he has over 300 paintings!

He says, "This (art of collecting) is acquired by feel. You can not mix up all kind of art becuae then it looks like a gallery. So, this (living) room and the corridor has a theme of Italian brigands. Italian brigands were a kind of social phenomenon in Southern Italy in the beginning of the 19th century. What you see in my home is the traditional Italian iconography - they look like romantic heroes who are goodlooking, wear good costumes - but in reality they were much uglier!"

His collection of paintings have found their way into a coffee-table book, which includes some of his earlier acquisitions as well. But he's been able to bring only a part of his collection to India because as a diplomat, he's keeps moving around and is only able to carry a bit of his collection around the world. But he confesses that he's looking for buyers because this hobby of his is turning out to be quite a burden!

He explains more about his paintings and says, "There were lady brigands who were tough and terrible. Then I have a Middle East collection which I developed when I was posted in Morocco."

His dining room is huge and Giuseppe has made the most of it because he's got even more paintings on the wall here as well. The theme here is 'Fortune Teller'. Then he even has a table made in Morocco, from just the root of a tree called tuya. This is where he has placed his collection of Fatima's hands, most of which were made by the Berbers, who are local Moroccon artisans. Some of these Berbers are Jewish (not all are Muslim) and so they incorporate Jewish symbols like the Star of David, in their work.

If that's not all, Giuseppe has a collection of porcelain, 1970s Italian furniture, and silverware, which includes statues of Lord Krishna and Goddess Saraswati (his favourite) which have been painted over with....nail polish! He's not letting us know all of his secrets because he does use nail polish along with some other things and as he puts it, he's becoming sophisticated about it. But yes, it looks great and what a nice idea!

The Consul General is a collector of everything else as well. He's got thousands of CDs (he's a fan of Indian music like sitar music and not necessarily Bollywood!). He's also got over 600 ties and as many suits! Now this is one man, who knows that quantity is fine, if you have an eye for quality.

Written for moneycontrol.com