Saturday, August 22, 2009

What is Strategy? IIM Professor, CEO, Sonia Gandhi and Kaminey

Which is the most used but least understood management concept? I think it is Strategy…

Every Tom, Dick and Harry has a strategy for doing some thing. If you dig deeper, you realize they don’t understand what strategy is!

One of the most renowned Professor of Strategy taught us Strategy course in B school. We asked a dumb question outside the class to Professor, “what the strategy is in real world?” He answered that even after decades of teaching he didn’t fully understood what is strategy! He added “Probably strategy is a way of life...”

I was confused and couldn’t understand his point. Now after few years of corporate life I can appreciate what Professor was talking about.

Strategy is about making choices.

Most people I see confuse strategy with goal.

Doing better is not a strategy. Doing better is a goal.

I heard from an acquaintance about recession strategy of a CEO.

CEO understood the challenge of recession and was addressing his sales force. He said “We need to formulate strategy for recession. The environment will be difficult so
We need to increase our Sales, Go out of our comfort zone and look for all opportunities
We need to be careful about profitability as your customers will pressurize you for lower prices
We need to be extra careful about cash collections as many costumers will face cash flow problem

With this strategy we should be able to face recession”

Is the above a strategy???? This is his goal of doing better for increasing sales, profitability and cash flow but definitely not a strategy. Is he making any choices or asking his sales force to make so??

Sales guys are confused… Should a sales guy go and win market share by decreasing price? Should sales guy take risk and do business with risky customers? If sales guy doesn’t opt for one of above two choices, he will loose sales.

So choice is between taking risk and increasing sales or being conservative and satisfied with lower sales. Unfortunately so called CEO strategy doesn’t provides any answer…

If Strategy is about making choices, then don’t we make choice every moment consciously or unconsciously among infinite possibilities? Is that a strategy?

That’s the point, that’s not the strategy.

For making strategic choices, one should have conscious choices in hand other wise this is business/life as usual and no real strategy...

I cannot say that I didn’t choose to become Prime Minister and that is my strategy to work in corporate life vs. politics. I never had that choice.

Sonia Gandhi had a choice to become PM of India but she didn’t choose to become PM, so probably she has some strategy behind her move.

Similarly for making strategic choices, choice should be among comparable alternatives. Smartness or Diligence cannot be strategy

I can’t say that I didn’t choose to become clerk but chose to work in management role and this is my strategy. Choosing a superior option can be smartness but not strategy. However if I choose the other way, i.e. work as clerk instead of working in a management role (despite being IIM MBA), then that could have been a strategy. Why would I like to become clerk when I can have a management career, may be to know trade secrets of a competitor (This could be my strategy, Isn’t it?)

Similarly I see people confuse strategy with
Planning of initiatives with out really making conscious choices. Detailed Action Plan with milestones and responsibilities is not a strategy. Why you choose to have that plan not the other (if any) can be strategy...
Differentiating their Product. Service, Brand without really making conscious choices. Merely because you have a differentiated product or service, you don’t have a strategy. Why you made product different? Just because you liked it, sounds cool then that this is not your strategy...
Tactics of achieving the goals

So when can we say a company or individual has a strategy?

Most convincing definition, I have came across of strategy is “Identifying what you choose not to do”

Think why you chose not to make a particular choice. There will be some logic behind it… That is your strategy.

If there is common thread behind your choices then your strategy is consistent...

As goes a dialogue in latest Bollywood block buster “Kaminey”... “Life’s course is not decided by which path you take but by what path you leave...”

Isn’t it what you choose not to do? Strategy…

That is what Professor was referring to a way of life, missing in CEO’s strategy but visible in Sonia Gandhi’s strategic moves

Thursday, August 13, 2009

Creativity in India or China?

Creativity in China? Are you kidding?

China has been long known for command and control structure, very process oriented, manufacturing economy. Creativity cannot exist in such discipline environment.

Comparing potential of creativity in India and China, India has a better chance...

I had the above world view for years

Compare the history of India and China, Indians were thinkers and invented zero and hence mathematics, where as Chinese invented paper, printing press among others.

That distinction is still relevant today as Indians have excelled in Software Industry where as China in Manufacturing Industry.

My above view got reinforced further after working first hand with Chinese colleagues (both mainland Chinese and ethnic Chinese)

I found Indians to be good at managing uncertainty, making assumptions, get some thing working, thinking out of the box, having big picture and on the other hand Chinese to be very process oriented, disciplined, focused , capable of flawless execution of projects at large scale.

My inference was that Indian companies will tend to be more creative than Chinese companies. Creativity has better chance in India

This view was challenged recently and I found, like many others, I might be wrong about creativity in China.

Global Consumer Brands can be proxy measure of Business Creativity

Name any global Indian brand in consumer space? I cannot think of any. Only few aspiring global brands are of Software Companies and these do not belong to consumer space

Name global Chinese brands in consumer space? You have some and many more are growing: Haier, Lenovo, Huawei…

How can Chinese companies be more business creative and build brands? It is again with the same process approach discussed earlier that they are applying to creativity. Chinese companies, combining process approach with execution excellence and global ambitions, are developing global consumer brands better than India. Haven’t you seen spectacular display of creativity during Beijing Olympics (Flawless execution)?

Chinese creativity style is collective or mass creativity rather than lone star creativity culture found in western world and India.

If a Chinese leader understands importance of creativity and wants his staff to develop mass creativity, his staff will take this task as a holy grail. They will do everything in their capacity to give their sincere shot. These collective sincere efforts even with less individual contribution can deliver results.

So China only needs few leaders who understand importance of creativity and have global ambitions, rest everything will follow.

In contrast, in India apart from leaders, followers should also understand importance of creativity and their version of creativity should match with their leaders. So India needs far more number of creative people and their collective synchronization to make any creative impact.

Which is more difficult to execute? India model or China model?

Incidentally, the only Indian company which comes close to building global consumer brands is Tatas and guess from whom Ratan Tata got inspired? Well China …

“About four years ago we decided to look at ourselves and our goals in a much bigger and bolder way than we had in the past. The genesis of this came from a little comparative study we did of India and China. I realized the difference was the scale of each thing they undertook. …I realized that with almost everything China did big, they grew into it very quickly. Their growth rate momentum supported that.”

In China, anything can be created even Creativity!!

Monday, August 10, 2009

Mayawati Statues and Solar Power

Mayawati is in legal trouble for installing her statues with Public Money (over $300 Million and growing) in UP

Well, she can in one stroke convert her most controversial action into wider international acclaim and even become an ecological political icon

She can convert her statues as solar power producing by coating them with special paint, which can convert solar light into electricity.

This is not a science fiction stuff or a geek’s fantasy. Italy is planning to build a 200ft high, solar energy-producing statue of one of its most cherished saints, Padre Pio

This way Mayawati can also contribute to improving power situation in UP, which is becoming worse with each passing year.

Indian leaders need to think about public utility as well when they plan and construct national monuments/ structures. The case in point is in Malaysia, where government not only build Petronas Towers as monuments of Malaysian pride and identity but also converted them into office space, which in no time became most sought after office address in Malaysia and South East Asia.

If Malaysia and Italy can do it, then why cannot M(alaysia)AYAWATI(taly)…

Wednesday, August 5, 2009

Execution Barrier 1 : Why companies don’t get it right?... Profit Making Motive rather than Idea Implementation

I read “Execution: Discipline of getting things done” by Ram Charan first time when I was in college doing MBA. I couldn’t appreciate value of execution at that time but still thought it was an excellent book.

After few years of corporate life and seeing the world change at unimaginable pace ( both boom and bust), I was wondering about Execution Barriers and Ram Charan’s book (though a good read ) cannot provide all the answers.

So what are Execution Barriers ?

Execution Barrier 1: Profit Making Motive rather than Idea Implementation

What will drive and inspire a team to produce extra ordinary results?

Setting financial goals like increasing sales by X, increasing Profit by Y, increasing share price by Z and then following this up in reviews?

Or implementing a unique product or process idea which is unprecedented and difficult to achieve and following this idea implementation process?

Idea can be a new product , better quality, better service , better on time delivery, affordable pricing , a different channel, user experience etc that on implementing will provide customers a better product or service proposition.

Radical ideas are contagious and inspire team more than financial targets. If implemented successfully they can even help to over shoot financial targets X,Y or Z.

Most executives and corporates miss the above and set only financial goals X,Y,Z and expect their team members to figure out the details, “ I don’t care what you do, just meet these numbers !!”

One cannot engage and inspire the team in this way. On the contrary , an inspiring and radical idea can even motivate folks to work and implement it for free ( like Linux, Wikipedia etc..)

Most successful examples in recent corporate history such as Microsoft, Apple, Yahoo, Google, Amazon, Cisco, Ikea, Dell, South West Airlines, Sony, Tata, Walmart, Infosys, Huawei, Reliance were those of successful idea implementers. These corporates had their radical ideas, which inspired their team to develop new products, services and processes, Thus inspiring their team to develop wining business propositions while executing on their ideas.

There will be many corporates whose radical ideas were not successful e.g. infamous Motorola Iridium case.

How can one know whether his idea is worth implementing? There is only one way to know, Just do it!! . Outcome will be successful, when idea is implemented passionately and meets right market opportunity (like Microsoft’s OS met growing PC demand). However some corporates might not be that lucky.

Luck or external environment is not in one’s control but executing an idea can certainly be one’s choice, which will be more inspiring and engaging than mere financial targets which most companies follow.

So what’s your big idea ?

To Be Contd…