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Management

An Important Lesson In Marketing

An important lesson in marketing!

Successful sales are always a bit strange & unique…

#Sales #Marketing

Source: Twitter

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Cooking, Gordon Ramsay and Indian Cuisines

I like cooking. In fact the very first prize in my life which I received in kindergarten was for cooking (पाकशास्त्र). I had made, actually helped my teacher make, दडपे पोहे (Dadpe Pohe).  And the prize I had received in the Annual Day function was a hanger 樂 . Yes, my school was famous for giving such totally mindless and irrelevant and demotivating awards/gifts to kids and kill innovation at nascent stage. Probably they wanted me to stay away from cooking. But I didn’t!

My interest in cooking continued, though at very slow pace. It was only when I started my career and went abroad that I got plenty of opportunities for cooking (at home my mom wouldn’t let me hover around kitchen!). And cooking became a valuable asset while staying with my flatmates! They would happily cut vegetables and clean utensils only to get a decent meal.

Though I liked cooking I never followed cookery shows – until 2007. Then while studying in the UK my flatmate Ajay (who was a foodie who could not cook!) introduced me to Gordon Ramsay – the celebrity chef! He showed me few episodes of his show and I was hooked on to them. Gordon’s was not a cookery shows, it was a reality show on “food business”, and I really liked the concept and the way Gordon conducted (except the F-word barrage).

The very first episode I watched was about a vegetarian restaurant in France. Since I am a vegetarian, my friend Ajay thought that I should get started with that episode. I am not able to find that episode. But here is one on an Indian restaurant which I liked a lot:

Recently I came across a sort of documentary featuring Gordon Ramsay on Indian cuisines. It’s really engaging 3 part series. It shows how an outsider (Gordon) looks at India and what fascinates him. Here it is:

 

As I said, his show is not about cookery – how to cook. It is about how to run a restaurant business. There are so many things to learn from the show. After having completed MBA and more importantly after having got a first-hand experience of running a (mock) food stall, I was able to relate with Gordon’s show far better; and only then I realized all the great nuances of his show.

I have been thinking about my experience with food stall at IIM-A and the lessons in Marketing. It was a great experience for me, because the more I think about it the more learning I can gather. A day spent on such activities is far valuable than a week spent in classroom analyzing the “case studies”.

OK, then let’s call my Food stall experience a “case study” in Marketing/Entrepreneurship. I will write about it in detail in my next blog. Meanwhile, do watch Gordon’s shows posted above.

Quick Thoughts: Infosys and the Art of Business Transformation

Read this news about Infosys and thought of sharing Quick Thoughts (Mini-Read).

Here is the Infosys news in today’s Times of India.

So Vishal Sikka wanted to position Infy as a Product company and the rest of the management/owners didn’t. Interesting…this is a huge strategic shift and will define in couple of decades who was right.

I feel Infy present management is right. You cannot transform and position a Services org as a Product based company after 30+ yrs and after attaining huge size.

But I agree with Sikka’s vision in principle. So maybe he should have created new org for Products.

We should learn from IBM, Google (Alphabet) and Apple how they manage massive transformations successfully.

Basic Laws of Management and Marketing

marketing  with business graph and chart hand drawing on blackboard
marketing concept with business graph and chart hand drawing on blackboard

My Prof at IIM-A once said that every subject in management has its roots in some mother subject. For example, he said, Economics has its roots in Psychology. Finance is a derivative of Economics (Micro-economics, to be precise). HR has its roots in Organizational Behavior, which in turn borrows from Social Science. Operations Management is loosely based on Applied Mathematics (Graphs, Queues, and Optimization techniques).

However, Marketing is the only subject which is a creation of Management studies. It is partially true. Because Marketing also has links with Psychology.

My other professor at the Lancaster University, UK gave a very interesting perspective. He said:

Basic law of Economics is: “People pay a lot for things they like”

Basic law of Psychology is: “People like a lot the things they pay for”

Between these two ends you embed all your functions: Strategy/Sales/Production/Finance/Pricing/Marketing/Distribution/Branding/Advertisement.

If you ponder over this, the idea is so fundamental. I will build on this and borrow from the great Management Guru Peter Drucker.

Let’s start with what the UK prof said.

Basic law of Economics is: “People pay a lot for things they like”. This simple looking sentence has many complex themes within itself. It suggests that “value” is always “perceived value” and not absolute value. The perceived value is based on the key concept in economics called “Utility”. I am willing to pay more for iPhone because I like it. That in turn is because I perceive more value/more utility in it. So if you can manage the “perceived value” part, you can sell a product for good price – probably a lot more than other similar products.

At the other end, the basic law of Psychology says, “People like a lot the things they pay for”. This is natural human tendency. You tend to overvalue your own possessions and downplay what others own. This is true of material possessions as well as opinions, and beliefs,…or achievements. One always feels that his/her success is hard earned and the other’s success is more of luck or chance. Dan Ariely, the author of bestsellers such as “Predictably Irrational” and “The Upside of Irrationality”, conducted an interesting experiment to prove this basic law of psychology. In one of the lectures he gave away signed copy of his book for free – but only to few “select” people chosen at random. Those who got the books felt “lucky”. Then he asked people who had received the book how much would they want to give away the book to others. i.e. how much would they sell it for. People who owned the book quoted significantly high price – because they valued the book, which they got exclusively, much more! Then Dan asked people who didn’t have the book how much would they pay for the book. And that set of people quoted very low number – as if they were downplaying the worth of the book.

This happened even when people who got the book got it for free! Now imagine what would happen if they had paid for it. They would have been “forced” to like their possession even more…because “People like a lot the things they pay for”.

Now let’s focus on Marketing. Marketing, in simple term is, converting wants of people into the needs. Job of marketing function is to change people’s habit; to make them buy more and more, as if they “need” things. And that is where these two Basic laws become relevant for Marketing.

To achieve the effect of Basic Law of Economics, the job of Marketing is to create the visibility and brand perception of their product and develop special “liking” for their product. To achieve the effect of Basic Law of Psychology, the job of Marketing is to maintain the aura of brand through advertisement, promotion. The idea is to constantly hammer the message: “As a buyer of this product, you belong to an exclusive club!”.

For many decades people and businesses focused only on the Basic Law of Psychology and thus focused on branding, advertisements, strategy of differentiation and product niche etc.

In recent years people are understanding that the Basic Law of Psychology is more significant. It is the backbone of Luxury goods. Also, it is the basis why “freebies” and “price war” is now seen as a bad strategy. If people like a lot the things which they for, it also suggests that there is no such liking for freebies. Yes, the customers would lap up anything given free; but they would also not hesitate to criticize and dislike such products, because there is no skin in the game. On the other hand, if customer pays for the product, it is also in his interest to “like” the product. He doesn’t want to be “seen” as a fool. And the more he pays, the stronger this feeling, and hence stronger the liking. It is very unlikely for someone to buy an expensive Diamond or a luxury car and not like it. And that is the cornerstone of all luxury goods.

I have experienced this myself so many times (I also admit that I have conformed to this law, willingly). I attended a 3-day Value Investing workshop last year. The workshop was conducted by a very famous professor who is perceived to be a great Guru on Value Investing. The program fee was Rs. 35,000. He has been running same workshop for last few years and have consistently increased fees – from Rs. 18,000 4-5 years back, to Rs. 25,000 3 years ago, to Rs. 30,000 2 years ago, to Rs. 35,000 last year.

To be honest to myself, the program was mediocre. You could have got the same Gyan from 2-3 books (worth Rs. 1500 max). The delivery was also nothing extraordinary. In fact it was monotonous and boring beyond a point.

However, nobody who attended the program admitted that the program was mediocre, or not great. Mainly because of the Basic Law of Psychology. How could you pay Rs. 35,000 for a 3-day program and say that it was all crap…you were fool to attend it? So the good perception of the program continues. People still find some good facets to justify the fees. For example, they would say “It was a great networking opportunity. I met so many good participants and exchanged good ideas, that the fee was totally worth it”. Or, “it was not just about the course content, but about having face time with the Professor. I learned so much from 1-on-1 interactions with him during breaks”. Or most ridiculous: “I got a selfie with the Professor, which means a lot to me!”.

Another example. A person who is earning decent salary but is stuck with job. He decides to pursue an expensive MBA thinking the perceived brand and quality of education would do wonders to his career! He leaves his job; spends 1 or 2 years and few lakhs (often more than his gross salary for 1-2 years) and attends the MBA program. Do you think he would ever say (in public) that the program was useless and he was a fool? 99.99% of the people would not (the rest 0.01% is Yours’ Truly, or that kind).

This is exactly what the Basic Law of Psychology says. And the more you spend the more you “like” it.

So whether you are a Marketing professional or not, do remember the two basic laws which form the boundary of Marketing!

As Peter Drucker said:

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

Lastly, understand the connection between the two basic laws. Economic theories are based on many assumptions. But the key assumption underlying all of Economics is that the man is a rational animal and would always behave rationally and in self-interest. Psychology is the subject which addressed the very assumption of Economics. It addresses question: “What if man is not rational, or does not always behave rationally?”. Both taken together complete each other and enhance our understanding of the world.

Strategy Diamond आणि Arena

मला (दोन) MBA करताना काही concepts, theories, models, frameworks विशेष आवडल्या किंवा relevant वाटल्या. (कदाचित बाकीच्या नीट समजल्या नसतील). त्यातले एक framework म्हणजे The Strategy Diamond.

The Strategy Diamond

कोणतेही मॉडेल/फ्रेमवर्क जर नुसतं theoretical / पुस्तकी राहिलं तर ते तितकंसं अपील होत नाही आणि लक्षात राहात नाही. पण जर आपल्या आजूबाजूच्या उदाहरणातून ते दिसले तर मात्र ते पक्कं लक्षात राहतं. म्हणूनच मला समजलं तसं आणि त्या उदाहरणातून The Strategy Diamond मॉडेल मधल्या “Arena” ह्या component बद्दल हा ब्लॉग लिहितोय.

Arena is – “the field where you / organization want to compete – it could be products, services, channels, market segments, geographies, technologies, value chain stages”. In some cases companies can “choose” the arena – especially when they are launching new product/service, entering new market or just starting up. In many cases you cannot choose arena, but still you have to understand the arena to position yourself vis-a-vis competitors.

Amazon आणि Flipkart यांचं Arena काय आहे? Product/Services ह्या दृष्टीने ते बऱ्यापैकी सेम आहे (खरं तर Amazon चा व्याप खूप मोठा आहे, पण तरी सर्वसामान्य लोकांना माहिती असलेला  Amazon चा व्यवसाय हा फ्लिपकार्ट सारखाच आहे). पण geography च्या दृष्टीने विचार केला तर Amazon चा Arena खूप मोठा आहे. जगभर त्यांचा पसारा आहे. एकाच वेळी ते भारतात Flipkart तर चीन मध्ये अलीबाबा शी स्पर्धा करतात, तसेच वॉल-मार्ट सारख्या brick and mortar retail chain शी पण स्पर्धा करतात.

Arena मोठा असण्याचे काही खास फायदे असतात. You can gain a lot more just by being part of a larger Arena. याची २-३ उदाहरणं मला जाणवली.

नुकताच मी फोर्ब्स इंडिया मॅगझीनचा “सेलिब्रिटी स्पेशल” अंक वाचला. गेली ५-६ वर्षे मी तसा अंक वाचतो आहे,ट्रॅक करतो आहे त्यातूनच मला ही २ उदाहरणे जाणवली.

पहिले उदाहरण – “द कपिल शर्मा शो” आणि त्याचा “poor Marathi cousin” “चला हवा येऊ द्या” यांचे.

हिंदी चॅनेल वरचा गेल्या काही वर्षातला लोकप्रिय कॉमेडी शो “द कपिल शर्मा शो” हा काही ओरिजिनल किंवा युनिक शो नाही. अमेरिकेतल्या तशाच फॉरमॅट च्या अनेक शोवरून तो कॉपी केला आहे. हिंदी मध्ये ही शेखर सुमन चे काही शो त्या फॉरमॅट वर आधारित होते आणि लोकप्रिय ही होते. पण आता मुख्य बदल काय घडला असेल तर तो म्हणजे “Arena” खूप बदललाय – हिंदी टीव्ही चा कॅनव्हास खूप मोठा आणि श्रीमंत झालाय. शेखर सुमन वगैरे लोकं जेव्हा शो करायचे तेव्हा फिल्म स्टार टीव्ही कडे वळले नव्हते. टीव्ही लोकप्रिय असला तरी “श्रीमंत” नव्हता. आता तसं राहिलं नाहीये. आणि त्यामुळे कपिल शर्मा ला तसाच शो करून अफाट पैसा मिळाला. अफाट म्हणजे किती? तर गेली पाच वर्षे तो फोर्ब्स इंडिया च्या सेलिब्रिटी १०० लिस्ट मध्ये आहे (#96 in 2012, #93 in 2013, #33 in 2014, #27 in 2015, #11 in 2016, #18 in 2017). फोर्ब्स इंडिया नुसार त्याचे नेट वर्थ १४५ कोटी रुपये आहे! मागच्या वर्षीची कमाई रू. ४०-५० कोटी!

मराठीत टीव्ही वर त्याच धर्तीवर “चला हवा येऊ द्या” हा शो होतो. जे लोकं दोन्ही शो बघायचे त्यांना जाणवले असेल की दर्जाच्या बाबतीत (creativity, quality of humor decency etc) मराठी शो खूपच चांगला होता, “द कपिल शर्मा शो पेक्षा”. त्या शो ची लोकप्रियता इतकी होती की शाहरुख, आमीर, अक्षय सारखे अनेक हिंदी स्टार त्यांच्या हिंदी चित्रपटाच्या प्रमोशन करता “चला हवा येऊ द्या” ला येऊन गेले.

पण तसे असूनही त्या शो च्या कलाकारांना आणि मुख्यतः “डॉ निलेश साबळे” यांना (शो चे अँकर – “कपिल शर्मा” चे equivalent) त्यांना इतका मोठा आर्थिक फायदा नक्कीच मिळाला नाही.  ह्याचं मुख्य कारण म्हणजे मराठी टीव्ही माध्यम अजूनही हिंदी च्या तुलनेत फार छोटं आहे. एकूण उलाढाल आणि प्रेक्षकसंख्या इ. हिंदी टीव्ही च्या जवळपासही नाहीये. त्यामुळे मराठीतला “तुफान लोकप्रिय” सुद्धा कमाईच्या बाबतीत किंवा बजेटच्या बाबतीत हिंदीशी बरोबरी करू शकत नाही.

तीच गोष्ट बॉलिवूड आणि हॉलिवूड च्या बाबतीत. ह्या वर्षीची फोर्ब्स इंडिया ची लिस्ट बघा.

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अक्षयकुमार, विराट कोहली यांची कमाई साधारण रु. १०० कोटी च्या आसपास आहे.

त्याच मॅगझीन मध्ये काही इंटरनॅशनल यंग सेलिब्रिटी बद्दल पण माहिती आहे. त्यातलेच एक नाव “प्लेबॉय कार्टी”, वय २१ 🙂

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त्या “कार्टी” ची (किंवा कार्ट्याची!) मागच्या वर्षीची कमाई होती $14.5 million, म्हणजे सुमारे रु. ९६ कोटी! आणि तो Top 200 सेलिब्रिटी लिस्ट मध्ये पण नाहीये. म्हणजेच हॉलिवूड चा “Arena” हिंदी/भारतीय “Arena” च्या कित्येक पट आहे, त्यामुळे तिथल्या दुय्यम/ तिय्यम दर्जाच्या कलाकाराची कमाईदेखील हिंदीमधल्या टॉप कलाकारांच्या तोडीची किंवा जास्तच असते.

So just by being part of a huge “Arena” you can possibly make far more money, create far bigger impact.

ह्याचं दुसरं आणि खूप बोलकं उदाहरण म्हणजे आमीर खानच्या “दंगल” ह्या चित्रपटाचं. हिंदी मधील प्रचंड गाजलेल्या आणि यशस्वी चित्रपटांची झेप तोवर रु. २००-३०० कोटी इतकीच होती (आणि ते सगळे आमीर किंवा सलमान खान यांचेच चित्रपट होते). रु. २००-३०० ही भारतातली कमाई. परदेशातली साधारण रु. १००-१२५ कोटी. कारण परदेशात भारतीय चित्रपटांचं मार्केट कमी आहे… किंवा तसा समज होता…

दंगलनी ह्या पलीकडे झेप घेऊन भारतात रु. ५११ कोटी आणि परदेशात रु. २०५ कोटी इतकी कमाई केली! पण खरी गंमत (“Arena” ची) पुढेच आहे. आजपर्यंत परदेशातले भारतीय चित्रपटांचे मार्केट म्हणजे “परदेशी स्थायिक असलेले भारतीय” असाच समज होता. भारतीय sensibility चे चित्रपट संपूर्ण जगाला मोठ्या प्रमाणात आवडू शकतील असं कोणालाही वाटत नव्हतं. थोड्या फार प्रमाणात परदेशी लोकांना काही प्रकारचे भारतीय चित्रपट आवडायचे (आवरा रशिया मध्ये प्रचंड लोकप्रिय होता. मिथुन चा डान्स डान्स आणि भप्पी लाहिरीची गाणी सोव्हिएट रशिया प्रांतात प्रचंड लोकप्रिय होती. माझा MBA चा एक क्लासमेट Georgia मधला होता आणि एक Azerbaijan मधला. दोघांनाही “कोई यहा नाचे नाचे” आणि “I am a Disco Dancer” छाप गाणी पाठ होती!). पण परदेशात मोठ्या प्रमाणावर भारतीय चित्रपट अजूनही पाहिले जात नाहीत.

आणि याच पार्श्वभूमीवर “दंगल” चीन मध्ये प्रदर्शित झाला आणि प्रचंड लोकप्रिय झाला. इतका की फक्त चीनमधील कमाई रु. १००० कोटी पेक्षा जास्त झाली (काही रिपोर्टनुसार रु. १४०० कोटी) !

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याला म्हणतात “Arena” चा impact. The same film could barely cross Rs. 500 Crore in Indian market (at home). And it managed twice that in a completely new and unexplored market, mainly because of currency difference and equally big market (population).

दंगल ची कथा, त्याची सेन्सिबिलिटी युनिव्हर्सल (वैश्विक) आहे हे मुख्य कारण आहेच, पण तशा प्रकारचे चित्रपट आधीही होते. किंवा भारतात ना चाललेला चित्रपट कदाचित चीन किंवा इतर unexplored मार्केटमध्ये खूप चालला असता. पण तसा कोणी प्रयत्नच केला नव्हता. सर्व भारतीय फिल्ममेकर हे आपल्याच छोट्या “Arena” मध्ये खेळत होते.

दंगल च्या चीनमधील यशाचा परिणाम किती होता याचा अंदाज यासंदर्भातली एक बातमी नुकतीच वाचली तेव्हा आला.

“दंगल”वाल्या आमीर खानचा “सिक्रेट सुपरस्टार” हा चित्रपट चीनमध्ये नुकताच प्रदर्शित झाला. भारतात यथातथाच चाललेला हा चित्रपट (म्हणजे साधारण रु. ५०-७० कोटी), चीन मध्ये पहिल्या क्रमांकावर गेला. पहिल्या तीन दिवसातली त्याची कमाई रु. १७५ कोटी झाली!

1516371632-Secret_Superstar_China_BO

ह्या यशानंतर आमीर खान त्याचे पूर्वीचे काही चित्रपट “लगान” आणि “तारे जमीन पर” हे चीनमध्ये प्रदर्शित करणार असे वाचले. चीनच्या लोकांना आवडतील असे जुने चित्रपट तिथे पोचले तर अजूनही ते प्रचंड कमाई करू शकतात.

म्हणजे ह्या यशामुळे भारतीय चित्रपटांना एक नवीन (आणि प्रचंड) मार्केट मिळाले आहे. Arena has just got bigger and richer!

मला strategy या विषयाच्या दृष्टीकोनातून हा धडा खूप महत्वाचा वाटतो. बर्गर हे आपल्या वाडा-पाव सारखं फास्ट-फूड. पण ते त्यांनी World Arena मध्ये नेलं. आणि तो इतका मोठा व्यवसाय झाला की एकट्या McDonald’s ची जगभरात ३६,००० outlets आहेत आणि तिथे रोज ७ कोटी लोकं जातात. एकट्या McDonald’s चा वर्षाचा रेव्हेन्यू $२५ बिलियन (सुमारे रु. १,६५,००० कोटी , किंवा इन्फोसिस च्या २-२.२५ पट आहे). बाकी बर्गर किंग वगैरे वेगळेच.

मग आपण वाडा-पाव किंवा पुणेरी मिसळ World Arena मध्ये नेऊ शकतो का? कुणी सांगावं एखाद्या चीन, रशिया, आफ्रिका सारख्या देशात मिसळ इतकी लोकप्रिय होईल की मराठी मिसळवाले अब्जाधीश होतील!

नम्र सूचना वजा आदेश: हा ब्लॉग वाचून कोणी तसे अब्जाधीश झालेच तर निदान मला कल्पना सुचवल्याबद्दल रु. ११ दक्षिणा (आणि जन्मभर मिसळीचा रतीब) द्या!

 

 

 

 

Critical Thinking and Analysis Case Study: Mumbai-Ahmedabad Bullet Train Project

shinzo-abe-narendra-modi_1d5b3072-990d-11e7-baba-4acd69b87684Bullet Train

I have had the privilege (or curse?) of pursuing full-time MBA two times. And if I had enough wealth, I would pursue it again, or maybe some other higher studies such as Ph D or Masters in Economics, Masters in Policy Making etc. I enjoyed the process of learning about Critical Thinking and Analysis and honing ability to study various subjects, evaluate opinions, data, facts and form a view.

And MBA is all about “application” – through Case studies. So, let’s pick the most recent and most interesting case study – that of Mumbai-Ahmedabad Bullet Train.

As I write this post, the Indian Prime Minister Modi and Japanese Prime Minister Abe laid the foundation stone of the 508 Km long Mumbai-Ahmedabad High Speed Bullet Train project, a few minutes ago.

Here are key details of the project (Case facts):

  • India’s first Bullet train is being built in partnership with Japan
  • The government has set an ambitious deadline of starting the bullet train on August 15, 2022 – the day that India marks its 75th year of India’s Independence.
  • The gigantic infrastructure project that is going to cost India approximately Rs 1,10,000 crore (~17 Billion USD)
  • he Japanese government is providing a loan of Rs 88,000 crore at a “miniscule” interest rate of 0.1%.
  • The loan can be repaid over a time span of 50 years, with the repayment beginning 15 years after disbursement. The loan interest ranges between Rs 7-8 crore a month and the government claims it will not put any strain on existing financial resources.
  • The bullet train will run at an operating speed of 320 Km/hour and a maximum speed of 350 Km/hour! The 508-Km journey will be completed in 2 hours and 7 minutes and cover 12 stations
  • Japan’s Shinkansen E5 series of bullet trains have been identified for the project.
  • The bullet train – with executive and economy-class seats – will have 10 coaches that will be able to seat as many as 750 passengers.
  • Later, Indian Railways proposes to add 6 more coaches to take the seating capacity to 1,250 passengers. Initially, 35 bullet trains will be operated.
  • By 2053 this number is likely to go up to 105. The bullet trains are expected to do 70 Ahmedabad-Mumbai sorties in a day. While 24 bullet trains will be imported from Japan, the rest will be manufactured in India
  • According to the government, the project is likely to generate employment for about 20,000 workers during the construction phase.
  • Safety: The train delay record of Shinkansen is less than a minute with zero fatality, says Japan. Not only that, the technology for disaster predictions and preventions will also be acquired.
  • This would make sure safety is maintained in case of any natural calamity such as an earthquake etc. Modi government hopes that with this technology, India will leapfrog to the cutting edge of latest train developments.
  • One of the biggest benefits of the bullet train project will come from the fact that Indian engineers and labour will gain knowledge and skills to ‘Make in India’ the parts and rolling stock. This, in turn, would be beneficial for future high-speed rail projects that are being planned for other routes in the country – and as Railways Minister Piyush Goyal said – we may even start exporting!
  • The Maharashtra government is still undecided on where the bullet train will end in Mumbai. The state government this week agreed to spare 9,000 sq metres plot for the station at the Bandra-Kurla Complex on the condition that the railways assess suitability of an alternative site.
  • At their summit talks today PM Modi and Mr Abe are expected to focus on bolstering defence and security ties. They are also expected to discuss cooperation in the nuclear energy sector. The recent nuclear test by North Korea will come up during the talks, officials said.
  • Benefit for Gujarat: An agreement between the Japan International Cooperation Agency and the Gujarat Maritime Board for developing the Alang shipbuilding yard, besides the establishment of two industrial parks, will be on the table during Abe’s visit. According to Gujarat Chief Secretary, JN Singh, 15 Japanese companies are keen to invest in Gujarat and will be signing agreements with the state government. Some of these companies include Moresco, Toyoda Gosei, Topre and Murakami.

Here is a good 2015 article about Economics of Bullet Train written in connect of Mumbai-A’bad Bullet Train proposal then.

https://capitalmind.in/2015/12/the-economics-of-the-bullet-train-and-whether-it-makes-financial-sense-to-take-a-0-1-loan

Now you must keep in mind “What’s In It For Me” (Link: http://www.urbandictionary.com/define.php?term=WIIFM ) question and apply it for different stakeholder groups.

For example, WIIFM from Japan’s perspective. Why would they provide loan at such low interest rates of 0.1% and provide technology? What do they get?

Think about WIIFM from different stakeholder perspectives – some of the key ones are: PM Narendra Modi (the individual), BJP Government at the Center, BJP Government in the state of Gujarat (remember, Gujarat state elections are due in few months), BJP-Siv Sena state government in Maharashtra, the commuters (who can take slow and cheap train or a fast and expensive flight, as of now, to travel Mumbai-Ahmedabad), business communities in Gujarat (Surat, Ahmedabad etc) and business communities in Mumbai (again Gujaratis?), the Indian Railways (getting technology know-how, developing skills in operating High-speed trains), the social and environmental groups (massive displacement due to land acquisition and some part of the route is submarine), the new commercial opportunities along the train route/stations (malls at and around the train stations), the public at large (tax burden, cess, toll?).

The more you start thinking, the more you can identify stakeholder groups. And different aspects how they are linked such as – Economic, political, sociological, environmental, international relations (Japan as an investor and ally – to counter China threat).

For now, I leave it up to you to think about this case study from various angles. Will write a follow-up post on this in due course. Maybe my analysis, or just updates about the project.

 

भयानक दरोडा – A lesson in management

भयानक दरोडा

हॉंगकॉंगमध्ये एका बँकेवर दारोडा पडला.

‘सगळ्यांनी मुकाट्याने जमिनीवर आडवे पडून रहा.

लक्षात ठेवा पैसा सरकारचा आहे पण जीव तुमचा आहे.’

दरोडेखारांनी ओरडून सांगताच

सर्वजण मुकाट्याने जमिनीवर आडवे झाले.

*याला म्हणतात ‘माईंड चेन्जिंग कन्सेप्ट’*

( *Mind Changing Concept* ) म्हणजेच माणसांच्या

सर्वसाधारण विचारांमधे बदल घडवण्याची

किमया.

त्यातील एक महिला कर्मचारी ‘अश्लील’ पद्धतीने आडवी

पडली होती. एक दरोडेखोर तिला ओरडून

म्हणाला,

‘मॅडम! जरा सभ्यपणे वागा. हा

दरोडा आहे, बलात्कार नाही.’

*याला म्हणतात व्यावसायिक रहाणे*

( *Being professional* ). आपल्या कामावर लक्ष केंद्रीत करा.

दरोडा टाकल्यावर दरोडेखोर लूट घेऊन घरी आले.

त्यातला ज्युनिअर दरोडेखोर, *जो एम.बी.ए. होता*

तो 6 वी पर्यंत शिकलेल्या

सिनियर दरोडेखोराला म्हणाला., ‘चला

आता आपण पैसे मोजायला लागूया!’ त्यावर

सिनिअर दरोडेखोर म्हणाला, ‘वेडा आहेस की

काय? हे पैसे मोजायला कित्येक तास लागतील.

जरा धीर धर. रात्री टी. व्ही.

वरच्या बातम्या बघ. तुला आपोआपच कळेल की

आपण किती लाखांचा दरोडा घातला आहे ते.’

*याला अनुभव म्हणजेच*

*‘एक्सपिरिअन्स’*

( *Experience* ) असे म्हणतात.

हल्ली कागदी पदव्यांपेक्षा अनुभव जास्त

महत्वाचा झाला आहे.

दरोडेखोर बँकेतून निघून गेल्यावर बँक मॅनेजर

सुपरवायझरला म्हणाला, ‘ताबडतोब

पोलिसांना फोन कर!’

सुपरवायझर म्हणाला ,

‘थोडे थांबा साहेब! *आपण आधीच बँकेच्या 70 लाख* *डॉलर्सवर डल्ला मारला आहे. त्यात अजून 10 लाख डॉलर्सची भर घालूया व मग पोलिसांना बोलवूया!’*

*याला म्हणतात ‘लाटेबरोबर पोहणे’*

( *Swim with the tide* ). म्हणजेच संकटाचे रुपांतर संधीत करून

स्वतःचा स्वार्थ साधून घेणे.

सुपरवायझर म्हणाला, ‘जर दर महिन्यात असा

दरोडा पडला तर काय मजा येईल!’

*याला म्हणतात ‘प्रॉयॉरिटी बदलणे’*

( *Changing priority*).

कारण ‘पर्सनल

हॅपिनेस’ हा तुमच्या ‘जॉब’ पेक्षा जास्त महत्वाचा असतो.

दुस-या दिवशी टी. व्ही. वर बातमी झळकली

की *बँकेवर 100 लाख डॉलर्सचा दरोडा पडला*.

पण ही बातमी ऐकून दरोडेखोर मात्र हैराण झाले.

कारण त्यांनी आणलेली कॅश परत परत मोजली. पण ती फक्त 20 लाख डॉलर्सच निघाली.

*मग 80 लाख डॉलर्स कुठे गेले?*

*खरी मेख काय आहे ते सिनियर दरोडेखोराच्या बरोबर लक्षात आहे.*

तो वैतागून म्हणाला, ‘आपण

जीवावर उदार होऊन दरोडा टाकला पण.

आपल्याला फक्त 20 लाख डॉलर्सच मिळाले.

पण

त्या बँक मॅनेजरने मात्र काहीही न करता 80

लाख डॉलर्स लाटले.

*खरे आहे माणसाने शिकले पाहिजे.नुसतेच दरोडेखोर न* *होता ‘सुशिक्षित दरोडेखोर’ व्हायला पाहिजे,’*

*याला म्हणतात ‘ज्ञान’ म्हणजेच* *‘नॉलेज’*

( *Knowledge*) ज्याची किंमत

सोन्यापेक्षाही जास्त असते.

तुमचे सोने नाणे

लोक पळवून नेऊ शकतात पण तुमचे ‘नॉलेज’ कुणीच

पळवून नेऊ शकत नाही.

🔴

#WhatsApp #Forward

Peter Drucker said…

Peter Drucker said:

“Culture eats strategy for breakfast”

culture-eats-strategy-for-breakfast

Corporate-culture-vs-strategy

Culture eats strategy for breakfast everyday – decoding Murthy-Sikka battle

If you were operating at or connected to the senior levels in the technology industry, the news of Sikka’s exit from Infosys would neither be shocking nor unexpected. It was a question of when – not whether – Sikka would be out of Infosys. So what went wrong ?

The History

When Sikka took charge, Infosys was in doldrums. Once an industry bellwether, Infosys stood still as industry peers like HCL and TCS grew quicker and delivered better returns. Its efforts at moving up the value chain through Infosys 3.0 came a cropper. Murthy’s second stint as CEO under those tumultuous conditions was a largely forgettable one The only positive event were Murthy’s efforts to bring in a new CEO.

The CEO search

The Infosys board envisaged what it needed in a new CEO: a successful technology executive with a global perspective and proven track record. Sikka’s academic success and credentials at SAP looked impressive: additionally, he seemed to have the depth of strategic skills and the right vision for an organization Infosys’ size. He took charge as the first non-founder CEO in 2014. All good? Not quite. Two areas simmered in the background right from beginning:

1. The very first clue comes from Infosys’s tagline: “Powered by Intellect, Driven by Values”. While Sikka’s Stanford PhD and SAP HANA success ensured his intellect stood out, his values’ fitment is unlikely to have ticked all boxes. Sikka was a global executive schooled in liberal values – diametrically opposite to te values of a traditional Infosys. Sikka’s masterful strategic skills and intelligence were an unlikely replacement for his mismatch of cultural values, especially for the top job at an organization that prided itself precisely on these very values,.

2. Sikka’s due diligence about the role of Infosys’ powerful and domineering founders presented an important potential fault line. There is a likelihood that Sikka mistook his experience in the West – where executive freedom is nearly guaranteed – as a benchmark for what to expect at Infosys. Little did he understand the true meaning of Murthy’s line “Infosys is my middle child”: Sikka, like others, might have laughed it off as parting words from a genius – not as literal words from a very possessive strong personality.

In the battle of nature vs nurture, Infosys founders expected Sikka to get nurtured by existing values whereas Sikka expected his nature to turn Infosys around. That dichotomy – as time would tell – made all the difference.

However, difference in such subtle yet vital areas rarely manifest themselves overnight: they build up overtime and blow over soon.

Enter Sikka

Sikka scored some early successes:

1. Sikka loosened the office dress code, promoted 500 employees, gave away iphones, strengthened grassroot communication and did everything to engage employees.

2. Sikka next wooed the investor fraternity and the stock markets by presenting a grand and aggressive vision of a $20 billion organization by 2020. For an organization known to under-promise and over-deliver, this was a cultural shock. The tall talk raised expectations drastically and while that enthused the stock markets in the short run, the expectations – as we now know – made it difficult for Sikka to live upto them.

3. Last, for a conservative organization known to harp on its brand but never known to pay top-of-the-line salaries, Sikka raised the salaries of his top reports to unheard-of levels.

Seen from the perspective of Infosys’ founders, these initial “successes” were not success at all: they were cultural failures, disturbing enough to lead to uneasy relationship with Sikka, but yet not alarming enough to cause a blast.

Meanwhile, Sikka brought an army of top people from SAP to change the culture and help him transition Infosys from a lumbering elephant to nimble cheetah. Unfortunately, Sikka misjudged what it would take to bring about a cultural change: if a culture of a 30 year old, hundred-thousand employee traditional organization could be changed with a handful of imported top-managers, Drucker’s powerful line “Culture eats strategy for breakfast everyday” would not have stood the test of line.

The challenges

All of the above would still have sustained but for a few areas where Sikka and the board crossed Murthy’s red line.

1. Awarding CFO Ravi Bansal a huge severance pay package raised question marks on corporate governance. Infosys prided itself on its disclosure standards. The board’s decision of not disclosing the contents of reports from an external law firm – especially when all was deemed “fine” – gave an already disenchanted founders’ team a stick to beat Sikka and the board with.

2. Within months of the Bansal episode, the board raised Sikka’s already high salary by 55%. The stick in the disturbed founders’ hands now got a poison tipping and became a lot more potent with Murthy incessantly and publicly lynching the board.

3. After some initial success, Sikka’s turnaround strategy missed its target by an embarrassing $5 billion: finally in June 2017, the board scrapped the $20 billion target.

For an organization that consistently beat investor expectations for years, this was a strategic Freudian slip and the Infosys stock – and Sikka – lost support of some of the vital institutional investors.

And for Sikka – long dismissed as a cultural misfit – who had strategic results as the last armory in his toolkit, a slipup in strategy, positioned his rhetoric as “all bark, no bite”. This was the last straw on the camel’s back.

The Exit

With a frustrated founding team led by combative Murthy, allegations of corporate governance, a failed turnaround strategy questioning the very competence of Sikka and missing investor support, Sikka had nothing to fall back on and nothing to look forward to – except a good nights sleep and the much needed peace of mind. Exiting Infosys provided him precisely those benefits – and Sikka cut his losses.

There are some really valuable lessons:

1. With the infamous Tata episode still fresh in memory, Indian founders and family business heads would do well to rethink if they really want to let go in the true sense when they hang up their boots. If all they want is to remote-control a strategically minded executive – who is tasked with the responsibilities of a CEO without the requisite authority, they should stop searching the market and instead stick to the comforts of loyal insider.

You can have loyalty or results – rarely both.

2. For prospective CEO choosing a top job at any organization – specially with powerful founders or families, it is well worth developing a thorough understanding of the cultural factors and sensitivities involved. Raw Intelligence is a necessary but not a sufficient condition to succeed – emotional intelligence provides the much-needed sufficiency. And that involves recognizing stakeholders interest before picking up the top job.

There is no point in diving in deep oceans and complaining about sharks.

The forces of nature are so strong that in the battle of nature vs nurture, nature often wins hands down. As Sikka learns that lesson and walks into the sunset, he would do well to recall Peter Drucker’s golden lines that Cyrus Mistry at TATA group learnt equally painfully:

“Culture eats strategy for breakfast everyday”.

Source: WhatsApp Forwards and long-time Infoscions

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