Tuesday, June 20, 2017

Knowledge Management: Key to success and speed

A sustainable competitive advantage of an organisation success comes from its intangibles like Brand, Culture, Knowledge etc. Because its these intangibles that cannot be copied easily by competition.

The global economy is moving towards knowledge economy. The consumption and production of intellectual capital is the new order. The organisations that do this are far more profitable than their counterparts in traditional industries. Its the knowledge that adds the extra margin to the bottom-line, that added competitive advantage which cannot be imitated. All knowledge centric companies enjoy much higher margins compared to traditional manufacturing and services industries.

A knowledge centric company prioritises managing its internal knowledge as virtuous cycle whereby the knowledge is produced, then shared, consumed and produced further more. The new knowledge generated is what flows into every area of its value chain (like strategy, products, operations,..). The organisation that produces knowledge faster than its competition invariably remains ahead.

Moving towards knowledge centric organisation requires a focus on knowledge management. Its important to distinguish knowledge management from information or database or business process management. Knowledge management is about meeting the high value knowledge needs of the organization which impacts the success of the organisation. Following are key considerations to bear in mind: 
  • Take feedback on organisational high value knowledge needs from people in senior and key positions.
  • External knowledge sources are equally important as internal knowledge when producing new knowledge.
  • Don't loose focus on tacit knowledge like experience, insights and network.
  • Quality is important than Quantity. Otherwise it will become a search for a needle in haystack. 
  • Its also about behavior and culture than just the IT platform. The change management and top management support are key to success.
It was in 15th century that Sir Francis Bacon mentioned "Knowledge is Power" and its more so true today in the knowledge centric economy.

The Disconnect between Innovation function and Product/Business strategy

Why do companies trail behind the product/market trends even after having a dedicated Innovation function within the company?

At an Innovation conference, there was an impressive presentation on Innovation capabilities of a top Multinational Company. On the sidelines, I asked the Innovation Head about the new product launch, and he was too happy to explain its features. He missed entirely the question as to why their product came so late in market and still not at par.
Innovation function in companies is a separate department and has a diverse mandate. They work on new ideas and engage the main machinery in implementation and go-to-market. They also provide innovation service whereby other functions seek them to solve a problem or help explore/implement an emerging technology for them.
Where organizations fail is in connecting Innovation to Business and Product strategy. Innovation function sees the shifting product and market trends which a Strategy function fails to see and appreciate. As a result, Strategy sticks with existing plans and product strategy a bit too long while the landscape changes around them. Innovation function is also considered downstream and their inputs are not taken in Strategy decision making process.
Companies which stay ahead of trends and launch disruptive products have Innovation inbuilt as part of their business and product strategy. Innovation is upstream to business and product strategy. Such companies do not have Innovation function but an Innovation platform and every function (including strategy) uses it by default.
Coming back to the discussion with the Innovation head of the top multinational company, after much prodding he replied that they did go to Product Strategy guys earlier but were not heard.

Off the Beaten Path to tap New Markets

While working on tapping into new and emerging markets, the product development approach was that of Frugal Discovery. And it was very different and at odds with the conventional approach accepted within the organization. Hence, devised the framework below which explains when and why different product development approach should be used.
Product development of new products and services is often a linear approach. First comes the market research, then the product R&D followed by a big-bang launch. This linear approach rightfully suits the existing markets which are the bread and butter of the organization.
But when it comes to new and emerging markets, such linear approach fails to deliver. And history is replete with such examples like IBM PCjr, Apple Newton, HP's Kitty Hawk, Premier Smokeless Cigarettes... The underlying reasons for such market failures being:
  1. Companies wade into uncharted territories solely based on their research & forecasts. Their efforts give them the confidence that they have figured out the unknowable/uncertain emerging market. 
  2. And they put huge money, resources and execution capacity behind the launch. This big bet launch gives them little financial room later to turn back and correct course. The managers leading the launch also hurt their credibility.
The recommended approach is to use a Discovery mode for the first point above and combine it with Frugal approach to address the second point.
The framework above explains when the Frugal Discovery mode is relevant.
The Discovery mode is required when:
  • Customers do not know what they want. The need is yet to be created or perceived.
  • A company is not sure what customers want. Though the company may rely on its market forecasts. But the actual use may be out of their research radar.
It takes time for consumers to warm up to new product/service features. And to better understand their own needs w.r.t. to given product/service. Discovery mode allows exploration and learning for both company and customers. 
And being Frugal in discovery mode helps to:
  • Conserve resources for second or even third attempt at getting the product strategy right. Companies tend to do the opposite by opening the full tap and going gung-ho with full scale implementation in the first attempt.
  • In discovery mode, iterations may happen even in commercialization phase on product design and manufacturing capacity. And since such iterations are later in product development lifecycle, they are going to be costly. Hence, it helps to be frugal from the beginning.
Be frugal, make limited prototypes/demonstrators, test market and iterate. Customers will also learn in due course what they actually want and new customer segments might emerge. 
Many companies are now looking beyond their traditional markets towards emerging markets to drive growth. And to do that, they would need to move beyond the traditional big-bang and know-it-all approach to a more humble, frugal and discoverer approach. 

Thursday, January 5, 2017

Why Corporate Accelerators Do What They Do

Having setup Airbus Corporate Accelerator (Bizlab) in Bangalore and interacted with many others, It was insightful to see the various objectives behind and associated challenges.
For those uninitiated, a Corporate Accelerator is a form of startup incubator which is setup by corporates for mid to late stage startups. An acceleration program is run for a fixed period (range: 4-12 months) whereby startups are provided mentorship, space and sometimes capital support. Some corporate accelerators also host internal projects.
Corporates have either of following two primary business objectives, each comes with its own challenge:
1.  To build customer base: For some corporates, startups are potential large customers of tomorrow. Hence, corporates select startups based on their business potential and provide required support to help startups scale their business.
For instance, Microsoft acceleration program helps tech startups to scale up while using Microsoft technologies. Bosch supports startups to build their products with Bosch sensors and also launch new business around their products. Intel provides hardware startups with design support and Intel's own processors, boards (Eg: Curie), chipsets etc.
Challenge: The main challenge which a corporate faces is to give support on business aspects for a startup to grow in its target industry/market. Each startup can have different target industry/market and a corporate will not have in-house expertise in each. Corporates tend to hire serial entrepreneurs and startup mentors to fill this gap. 
2.  To find innovative ideas to improve business: In this case, corporates see startups as potential partner/supplier for innovative solutions. Corporates define their interest areas in terms of technologies & applications and select startups with innovative products/solutions in the same. During the acceleration program, a Corporate would expect startup to pivot and solve the need of their company or industry.
For instance, Target work with startups to enhance retail experience. Lowe's, Lbrands, Airbus also have similar objective to drive-in innovative solutions from startups into their business.
Challenge: The challenge here is very different from that in previous objective. The main challenge here is to work with its internal departments to find the right problem to solve, secure their commitment and launch projects. Sometimes internal departments are reluctant to work with startups. 'Not Invented Here' syndrome and internal politics also add to the challenge.   
 In addition to the above primary objectives, there are other benefits which a corporates expects to derive with accelerators :
  • Introduce entrepreneurial mindset and way of working in the organization
  • Accelerate internal projects by hosting them in acceleration program
  • Identify and hire talent in specific areas of technogly and business
  • Enhance corporate image and marketing for talent attraction and retention
  • Review and Qualify deals (startups) for corporate venture/partnership

A Corporate Accelerator is a win-win for both corporates and startups. Startups stand to gain with access to Customers, Industrial Problem statements, Subject Matter Experts and Mentors, Investors and overall exposure.

Hardware Resurgence

Software has been the talk of the town. Be it Artificial Intelligence, Big Data or Software defined hardware. The value addition in various products/services has been increasingly coming from software. Companies are keen to give their business a digital boost. Hardware has been treated all along as commodity. Value creation came via software on top of hardware. Even in IoT applications, hardware has been treated as a sidekick at best.
Recently the Hardware is seem to be making a comeback. The various software and its platforms are all there. But more and more technology applications/usecases require sophisticated hardware to enable them. We need hardware which are processor + storage + sensor + self-powered + small form-factor to enable next gen applications of IoT. We need more capable VR hardware to enhance user experience and convenience. We need flexible hardware to do faster prototyping. We need hardware flexibility in datacenters to switch roles between storage, CPU and GPU as per demand. Other disruptive real-world hardware technologies on the anvil are morphing structures, self assembling structures, exoskeletons, printed electronics, structural batteries and lot more.
Hardware development is capital extensive. Unlike Silicon Valley, not all startup ecosystems are able to support it. India startup ecosystem is on cusp of maturing with big hardware players like Intel and Bosch stepping in to nurture hardware startups. The Open Source Hardware, On-demand fabrication and the Maker movement will provide further impetus to hardware startups. On other end, cutting edge hardware research in universities/institutes will find its way into more real-world applications through spin-offs and incubated startups.

Wednesday, October 5, 2016

Need for speed. Need for ambition. Need for hunger to disrupt.

Having worked closely with multinationals and Indian corporates, I couldn't help but notice the difference. I admire Indian corporates for business prowess but at the same time feel concerned about lack of hunger for radical innovation.

Innovation in Indian corporates are mostly incremental improvement efforts with an objective to enhance quarterly results. Their pursuit of business excellence and performance is commendable. However, a sole focus on this pursuit alone can lead to 'frog in slow boiling water' syndrome. Whereby Indian corporates do a good job in adapting to heating competition and business pressures, but do not show ambition to jump out and disrupt.

To illustrate, a large Indian conglomerate announced that they want to go Digital. But after meeting them, it turned out that their definition of Digital was narrow, it was limited to leveraging ecommerce in their business units. They lacked the ambition to use Digital Technologies  to disrupt their business and market.

Another case in point is automotive sector. Indian automotive companies are  rightly focused on improving products & securing sales in a competitive market. Recently we heard a news that an automotive company partnered with leading taxi aggregator service. What we do not hear, unlike in rest of the world, is Hybrid/Electric vehicles, Self driving cars/trucks, Connected system, Drones, Next Gen Mobility etc. These disruptions are bound to shift the most value adding link in entire value-chain away from traditional automotive companies, chipping away their differentiation and margins.

Indian corporates are good in responding to competitive pressures with clever tweaks on existing markets and products. Unfortunately, they are not investing on breaking the mold and taking disruptive bets. Many do not even have a defined Product Strategy to cater to both business and technology trends/shifts.

Going forward, disruptive forces will bring fundamental shifts in several industries. Value chains will change, some industries may morph and others would cease to exist. Hence, Indian corporates need to be ambitious, spearhead disruptions and make future bets.

Sunday, September 4, 2016

Know the Visionaries, Pragmatists & Conservatives

If creating innovative products is hard, selling them is even harder. A B2B innovative product caters to either an implicit/un-met need OR a not-thought-of gain. In either case, selling it is an uphill task. Its quite similar to high-tech market development model as explained by Geoffery A. Moore. The model divides the customers majorly into Early Adopters (Visionaries), Early Majority (Pragmatists) and Late Majority (Conservatives).

When the customers are companies in B2B, segregating them in these boxes is not that straightforward. Companies have both good and lacking areas. For example, an Airline may be ahead in customer service but might be a laggard on operations side. A more pronounced segregation is seen inside a company. People in the company are from across the spectrum of Visionaries, Pragmatists and Conservative. And each contributes in their own way to effective running of an organisation:

Visionaries: These are enthusiasts, seek the radical improvement, can see the big picture and strategic opportunity. People like them are usually found wearing the hat of Innovation, R&D and Business Development. Usually, they hold budget to invest in new ideas but do not control big ticket purchase decisions.

Pragmatist: They form a big chunk in the organization. They look for quantified benefits, low risk, proven solutions and are comfortable with incremental improvements. These are Departmental heads in Operations, Marketing, Finance etc. They decide on big ticket purchases and their expectations can be different from that of visionaries.

Conservatives: They too are sizable. They always have the word of caution, prefer in-house development, worry about compatibility with existing systems and prefer convenience over performance. These usually come from support departments like IT, Procurement, Administration and others, but are also found in line departments. They can influence and delay big ticket purchases.

Similar to market development model of Geoffery A. Moore, there is a chasm between Visionaries and Pragmatists. A buy-in from visionary can get you a pilot phase, a foot in the door. But for the big-ticket purchase and company-wide deployment, buy-in from Pragmatists becomes the key.

To cross the chasm, its important to reach out to the Pragmatists early on to understand their expectations. And pick up a specific area to solve on an industrial scale. This may narrow down the scope, but then Rome was not built in a day. A pragmatist buy-in becomes a strong reference in that market segment.

There is no one size fits all when it comes to bringing innovation to market. Knowing your Visionaries, Pragmatists and Conservatives does help and feeds into a sound product and market strategy.

Monday, August 1, 2016

'Fail Fast', a catchphrase that can fail you

Mantras and catch-phrases dominate the management lexicon these days. Consultants, thought leaders and experts use it to condense ideas and popularize them. Business leaders pick it up and go gung-ho with it in their organizations. Before one knows it, catch-phrases start getting applied in literal sense, overshadowing common sense at times... until the next catchphrase arrives.

One of such catchphrase is 'Fail Fast' used in combination with 'Fail Cheap', 'Succeed Faster' etc. However, its 'Fail Fast' that grabs attention the most. Its important to understand the circumstances 'Fail Fast' should not be applied.
  • When perseverance is key, keep this catchphrase at bay. For example, while struggling with product-market fit, its tempting to drop ideas/projects if customer feedback is not very encouraging. Or when crossing the chasm, where a slow adoption rate may tempt to shelve the product. Or when working on innovation, which is not a linear journey but a winding road filled with conflicts and struggles.
  • When working relationships are to be built. Imagine a company hires an individual/agency to partner on a new initiative. Things do not go well first six months. What does the company do? Fail the partner! And face the same issues all over again. When both the company and the partner are on a journey to something new, its important to communicate, empathize and invest in making the relationship work.
But their are circumstances where 'Fail Fast' catchphrase is relevant. 
  • When experiments are required for problem solving. Or when iterations are required in Agile development. In these circumstances Fail Fast is to Learn Fast.
  • When its required to galvanize a risk averse management to take on new initiatives without the fear of making mistakes. Fail Fast is to Bounce Back Fast for the management when mistakes are made.

Saturday, July 2, 2016

AI for Business Simplified

What is AI? How can it affect my business and industry? What can I do with AI? 

AI is hot and happening these days. Investment activity is high. The research in AI is finding its way into real-life applications. Corporates are waking up to it and are grappling with above questions. Having leveraged AI for business applications, my attempt here is to address above questions in plain language sans buzzwords.

AI simply put is computers doing things normally done by human mind. Hence, by this definition, an AI ..: 

Recognizes and understands like a human

AI technologies are attempting to provide computers the ability like human mind to recognize and understand unstructured inputs like handwritten inputs, natural language, audio, pictures, video and more. The application of these in real world are diverse:

  • Understand queries in natural language. Current popular applications are personal assistants like Siri, Cortana, Google Now. However, in future it will extend to work related queries 'Which fastener should I use for ....?' 
  • Extract valuable data/information from handwritten documents, audio and video  for analysis. Eg: Handwritten records in regulated industries, Audio and video recordings of experts and executives, Customer feedback.
  • Automate management of unstructured data: Imagine an app that goes through all your pictures and videos, identifies the best moments and catalogues them in a timeline and makes a collage out of it. Or a software that organizes lifecycle data of a product/part (say car engine) from paper records and databases.
Social media and consumer tech companies like Facebook, Google, Microsoft, Amazon, Apple, Amazon are leading in such applications since they deal with natural language, pictures, audio & videos.

Interacts/Responds like a human

Enabling machine to converse like humans allows to automate human interaction and improve user experience.
  • Customer service, service desk, 'Help and FAQ' can be automated by using chatbots which can understand and respond to queries in natural language. 
  • Chatbots can be used for branding. A customer can actually talk to a brand. Eg: Barbie chatbot for interaction with kids.
  • Chatbots can be your concierge and advisor: Eg: Book itinerary (flights, taxi, hotel) through chat. Organize and order your shopping. Advice on preparations for special occasions.

Thinks like a human

AI technologies are adding self-learning power to computational power of machines so that they can rival humans in performing specialized tasks. The applications are diverse:
  • Gaming: AI have been pitted against humans in Chess and Go. In future Gaming will include AI to make games more adaptive and engaging.
  • Driving: Driverless (Tesla, Google,..) and driving assistance (Porsche) vehicles are evolving rapidly.
  • Training/Assessment: Recently AI performed better when pitted against a fighter pilot in dog fight simulation. In future, one could imagine AI training humans at specific tasks and also assessing them.    
  • Professional services: AI is automating the knowledge and analysis work in legal and financial world. UBS and Goldman Sachs are using AI for both employees and customers.
  • Automation in IT industry: Many aspects of software development and testing can be automated with AI. 
  • Healthcare: AI will participate/assist in diagnosis, treatment, nursing and follow-up. It will improve overall healthcare quality and reduce costs.
  • Shopping: AI will learn buying preferences over time and suggest relevant and interesting products. Will benefit both shoppers and retailers alike.
  • Entertainment: Insights into likes and dislikes of individuals and masses will help entertainment industry to put together better storylines and shows.
  • Security: AI technologies can learn about anti social elements, terrorists, criminals from past actions and investigations; and predict their behavior and next move.
  • Business decision making: Activities like processing data, mathematical analysis, applying frameworks, forecasting can be managed by AI. AI assistants to CXOs are a distinct possibility. And maybe an AI CEO in future. 

Creates like a human

It has been argued that AI can emulate human creativity and art. AI can learn and produce beautiful music, painting, poetry etc.. Recently, Google's Magenta created a 90-second piano melody. The early attempts by AI are tad simple and imperfect but cannot be ignored by art world.

Feels like a human (Self aware)

This is still far-off and in realm of science fiction. If it happens, mankind would have effectively spawned a new intelligent species. The implications of which would be far reaching and best left to imagination for now.

AI technologies & applications are expanding fast and will disrupt businesses, job profiles, our daily work and get more intertwined in our personal life.

Wednesday, May 11, 2016

Servant Leader : paradoxical but effective leadership style

We are well familiar with autocratic, participative and laissez-faire styles of leadership. They are considered to cover the entire spectrum from controlling to facilitating. Yet, there is another paradoxical approach beyond this spectrum, i.e. a Servant Leader.

Why do we need a Servant Leader? Are the familiar leadership styles not enough. To answer this, let's first understand the relevance of these familiar leadership styles:
  • Autocratic leadership: Leader directs and controls the team. Role of every team member is clear and compliance is important to achieve the objective. Eg: Production, Construction, Military
  • Participative: The team also participates in the decision making. This works with knowledge workers who are self-motivated and eager to share their ideas. Eg: IT industry
  • Laissez-faire: The leader only offers guidance and support. The team members has complete freedom to decide and complete their work. This suits when working with highly skilled and experienced people who are independent. Eg: R&D, Innovation, Creativity works
Other leadership styles like transactional, bureaucratic etc.. also lie in the same spectrum.

There are two basic premise for above leadership styles.
  • There is a team in place 
  • The leader has some formal authority over the team.

What if the above two premise are taken away? Imagine a situation when one needs to achieve an objective with people over whom he/she has no formal authority, who are in different departments, some of them are experts and some other department head themselves. Each having a day job and independent responsibilities. How does one lead then?

This is where Servant Leader comes in. A Servant Leader is outside the spectrum of above familiar leadership styles because he is the doer first. He/she does not control. Instead he/she inspires support and commitment based on the merit of what he proposes and his work.

Based on my personal experience, servant Leader is very effective in  following conditions:

  • The objective is novel and ambitious
  • Uncertainty in how to achieve the objective
  • Requires specialised knowledge and expertise.
  • The team to achieve the objective constitutes other departments, experts and external partners
  • Team members have a day job and general lack of time to support outside their regular work

In above conditions, 'leading by doing' works best. The leader gets access to specialised skillset and benefits from expert knowledge of team members. The team members would be more open to contribute without feeling burdened by extra work. The leader will still be in charge, anchoring the whole initiative and steering it. The team members will also act as ambassadors of the project and contribute to overall buy-in within and outside the organisation.

Servant Leader may sound paradoxical but it is very real and works. The usual management education portrays a leader who is sitting on top of his team, is autocratic or benevolent depending upon the situation and the team does the work. Turn this portrayal on its head and you get a Servant Leader who might be sitting at bottom or side of the team and leads by doing.

Saturday, April 9, 2016

Being Future ready (contd..): Making active and effective bets rather than passive ones

The previous post on ‘Being Future Ready’ discussed the approach to creating future bets and portfolio. In this post, we pick up from where we left off, i.e. making active bets rather than passive ones.

A technology bet is passive if its being researched and developed in a silo with no link to business and market. A bet on new business model or market segment is passive if its only being explored in powerpoint presentations and reports. Such passive bets are common to organisations with siloed and conventional way of working.

In contrast, an active bet has product/commercial applications and benefits in medium and short term (refer figure below). An active technology bet would see a launch of prototype/demo in short-term and the first product application over mid-term. An active bet on a new market or business model would have a pilot phase in short-term, followed by a commercial offering over mid-term.

For bets in unrelated areas (an unconnected market/industry or technologies), finding a partner is an apt approach. To evaluate and find a right partner in short-term and then work closely with the partner towards field/market test over mid-term. The partnership approach allows to access new capabilities, share risks and gain experience/expertise.

For a company with not so deep pockets, the partnership approach can be extended to core and adjacent areas. This would reduce investment requirements and allow to have a diverse portfolio of bets.

Active bets are easier said than done. It requires an organisation which is tuned to cross-functional, design thinking and agile way of working; collaboration with customers and external parties; and a positive disposition towards risk and failure. Even with best of intentions, it's the organisational readiness which becomes the constraint and an active bet may relegate into passive one.

Friday, March 11, 2016

Being Future ready: creating a Portfolio of Bets

How does one prepare for the future business environment? What new markets will emerge? What kind of products and services will customers pay for? What technologies will disrupt the industry? What will disappear? What will become a commodity? And what will be the new high-margin and value adding areas in future?

Above questions are the key to long term business and product strategy of a company. So how does a company be future ready? There could be four approaches to it.
  1. Predict the future accurately and invest for it?
  2. Invest in various potential futures scenarios?
  3. Evolve as the future unfolds?
  4. Shape the future itself?
However, each of the above may not be sufficient in itself.
  • As to first point, predicting the future has never been easy. A future is an outcome of complex interactions of several factors, some of which are known today and some are not. For every person who predicts the future correctly (and becomes famous), there are hundreds who get it wrong.
  • As to second point, creating several future scenarios is helpful. It improves the probability but still doesn’t guarantee success.
  • For the third approach, it’s easy to apply but then the company remains a laggard, a follower, a second-best. It’s not a bad business strategy though. Not every company can be a leader.
  • Fourth is a game-changing proposition, but need to be realistic if the company has the required resource and clout to shape the futue.

What could be a realistic and practical approach then? The recommended approach is to create a portfolio of future bets by leveraging the above four approaches. Each bet can be dropped or scaled up in response to business environment. And a dropped bet can be revisited if required.
Following are the three grounds for creating the future bets:
  • Future scenario studies based on megatrends,  customer shifts and other factors.
  • Emerging or current hot topics so as to evolve with them.
  • Own strengths (technological or business). So that company can shape a future where the strength will give a competitive advantage.

Number and size of such bets would also depend on how deep the pockets are of a company.
But what does a company with not so deep pockets can do about it? How to make Active bets rather than just Passive bets? Well… that would be the topic for my next post.

Sunday, February 7, 2016

To Pivot, or not to Pivot...that is the question!

'Pivot' implies strategic course correction. Its perhaps the most challenging decision for both startups and corporate innovation projects. Both entrepreneurs and intrapreneurs go through this dilemma some or other time. The dilemma is exacerbated when the situation do not seem that bad but is also not getting any better.

To make a good pivot decision, lets understand its business impact areas. From my experience, there are three distinct areas of Pivot:

  • Customer: A pivot decision may involve changing the customer segment itself. Eg: Selling it to an intermediary rather than to end consumer, Moving from B2C to B2B,.. 
  • Value offering: A pivot decision would be to rethink the offering to customer. Offerings generally evolve based on customer feedback. But sometimes one may have to change the offering completely. Eg: Selling platform rather than the content on it. 
  • Technology: The technology behind the offering may have to be changed sometimes. This is perhaps the most common pivot decision and logical to arrive at compared to the above two.

Pivots are necessary to identify the right approach to grow the business, whether its a startup or corporate business development. 

However, its the cost of Pivot that discourage people from doing it. How can we reduce the cost of Pivot? How can we take a peek in the future post Pivot?

  • One way to reduce the cost is to develop MVPs (Minimum Viable Product). Building an MVP over an existing product does not cost much. Sometimes MVP can be a mockup with less automation and more manual backend support. MVPs can be used to get feedback from new customers, get feedback on a new offering and/or a new technology. 
  • Also to reduce cost, Pivot needs to applied judiciously. It cannot be a blind exploration exercise or a leap of faith. To identify potential Pivot opportunities, a value mapping exercise on paper is useful, followed by taking the feedback from the customer. Its important to clarify with the customer his willingness to pay for proposed product/service.

Another hurdle for Pivot is more of human nature. To love one's ideas so much so to not consider Pivot as an option. I will not call it as human weakness because such passion is required for entrepreneurs and intrapreneurs to succeed. Its the role of mentors then to help them see the reason and guide them.

To Pivot, or not to Pivot?.. Is not a reactive approach, but a proactive question that needs to be asked from time to time, especially when in predicament by flat-lining sales/profit and a mediocre situation.

Sunday, January 3, 2016

B2B Marketing: transitioning from Messaging to Dialogue

A customers needs supplier as much as a supplier needs customer. Yet, the process of discovering each other is fraught with pitfalls. Having experienced B2B buying cycle from both sides (supplier and customer), its insightful to see how the information asymmetry impacts the success of B2B marketing. The customer has the information of its needs(both explicit and implicit). Gaining this insight and closing the information asymmetry is key to the success of a B2B supplier/company. 

A B2B company instead relies on one-way messaging to customers and closes the information asymmetry other way around. In Push marketing stage, a company is busy advertising its offering and same messaging is carried over in Pull marketing when dealing with queries from customers. Emphasis is on expanding the media mix to include blogs, social media, conferences and others. But the nature and content doesn't change, often to maintain 'consistency' in marketing messages.

The way to gain information symmetry is to enter into a Dialogue with customer. To pick the brains of the customers, to seek their views, to brainstorm with them and to be genuinely interested in understanding their needs. Opportunities for dialogue can be created within push and pull marketing stages. For example, instead of highlighting product features at a conference, storytell a future vision and how is your company contributing to it. When customer reaches out with queries, try to meet him (not as salesman but) as a fellow professional to offer guidance. Rather than just posting messages, use social media to start a dialogue.

I would conclude by citing an outcome from McKinsey study on B2B companies. The top quality that is appreciated most by customers (700 global executives) is 'Cares about honest, open dialogue with its customers and society'. And surprisingly, the above quality was missing in brand messaging of surveyed B2B companies. 

Sunday, December 6, 2015

The Digital boost to the Business: A practical approach

Business are looking at Digital as a mean to drive revenues, efficiencies and competitive advantage. 'Digital' could mean different things for different people. For some, its about digitisation and mobile devices. For others its Cloud, IoT and Data Analytics. Digital is not IT. The discussion on Digital is often skewed towards a narrow set to technologies. Instead, the starting point should be the business and then comes the technologies that can be leveraged.

A straightforward approach would be to divide the business into following areas and then frame the digital initiatives:

Customer Offerings: Digital can be a game changer in terms of how a business designs its offerings and serves its customers. 
An entire new line of product based services can be enabled by digital initiatives. There are examples of a water purifier company selling pure water remotely. Consumers can buy the pure water just like a prepaid talktime on mobile.   
Sensors, Digital Material Technology (MIT) and others can improve the physical products itself. 
Various digital technology enablers include Big Data, IoT, Analytics, Augmented Reality, UAVs, Digital Materials and so on...

Processes: Digital innovations can improve effectiveness of processes like design, supply chain, production, maintenance, financial, marketing, HR and administrative.  
Production can benefit from IoT, 3D printing, AR, Wearables, and Robotics based solutions.
Supply chain can benefit from Tracking and Analytics solutions.
Fintech is an emerging area. Serious Gaming, AR, VR and Virtual Simulation technologies can benefit training and design processes. Marketing can benefit from social media analytics, mobility and animation technologies.

Decision Making: Digital can help make decision making at all levels of management more objective and data driven. 
Data visualisation and analytics is a common thrust area. Social media technologies help management keep an ear to ground and also communicate better.

Infrastructure: Digitalising the infrastructure allows the company to get more out of its fixed investments, be it buildings, equipment or IT. 
Smart buildings save money. Digital solutions enable predictive maintenance which can improve equipment productivity. IT infrastructure can expand its horizons to data lakes, remote sharing and connectivity, contextual search, mobility to give the digital edge to organisational working.

Digital initiatives in above areas can be at both departmental level and corporate level. Coherence and synergies between them can be ensured by transparency and open interaction across departments. A core central team can also help coordinate and facilitate such initiatives.

Lastly, there is a behavioural aspect to this topic. There is no ready template for digital business or digital initiatives that a business can simply adopt and implement. Its innovation driven and an intrapreneur skillsets are required to conceive and implement digital initiatives in an organisation.

Friday, October 16, 2015

Indian Aviation: Lifts & Drags

Indian Aviation is gaining global attention with the potential it holds. It is fastest growing and 3rd largest in absolute number of passenger growth. Billionaires growth rate of 20% indicates the potential for corporate aviation. The huge gap in flights per capita (4 times less than China and 40 times less than US) is another indicator of unrealised potential.

The 'Lift' that Indian Aviation is experiencing is more due to favourable econometric factors.
  • Growing GDP and GDP/capita
  • Income distribution moving towards to middle and high income groups
  • Young demographics and increasing working population
  • Increasing urbanisation
  • Downward trend in inflation adjusted travel cost due to competition driven efficiencies

However, story of Indian Aviation is also of missed opportunities. It missed out on using geographic advantage of India to become a major hub for East-West connectivity in 1990s. More than half of the revenues of foreign travel in & out of India is with foreign players rather than with Indian operators. India also lost out on becoming MRO hub to smaller countries in neighbourhood. India constitutes just about 1% of Global MRO market. 

The 'Drags' on the Indian Aviation are due to policy and structural issues.
  • High fuel cost compared to global prices due to taxes (excise, sales tax). Hence, airlines in India are saddled with higher fuel cost compared to their global counterparts.
  • 5/20 rule (International operations only after 5 years of domestic operations and 20 aircrafts fleet). This rule delayed the airlines in India spreading their wings globally. Only few large airlines operate internationally. And the rule stifles new entrants with ambitious growth plans. 
  • Unattractive incentives for route dispersal to remote and unprofitable hubs. 
  • Lack of low cost airports. Lack of alternate airports in busy hubs. For example, Bangalore is not allowed to have its old airport as an alternate airport for domestic LCC. 
  • High tax burden on MRO operations.
  • Inadequate FBOs for General Aviation.
  • Non Acceptance of Bio jet fuel for aviation. Biojet fuel can cut both costs and emissions. In addition, it will stimulate growth in biofuel segment which has links to rural economy.
The above issues stem from years of Govt. indifference to aviation. Aviation unfortunately has been considered transport of elite and its stimulating effect on economy has been ignored. Aviation can speed up the business exchange, goods movement, tourism and overall economic growth. Today commercial aviation caters to a middle class citizen for both leisure and business travel. 

Even if we were to take the corporate aviation which is used by business heads, it helps them save 20% of time compared to commercial airlines and enable them to visit remote places at their convenience. Thats a huge improvement in their productivity and connectivity which translates into faster decision making and business growth.

In India, Aviation is a major employer and supports 1.7 million jobs. Globally, aviation contributes to 3.5% of Global GDP, but in India it contributes just about 1.5%. The 'Lift' from the favourable econometric factors presents an opportunity to derive substantial economic benefit and create jobs provided the 'Drags' are addressed. Or else, it would again become another of many missed opportunities.

Data sources: Airbus, IATA, Frost & Sullivan

Sunday, August 30, 2015

Framework for Trans-national R&D strategy

Multinational companies generally tend to have R&D concentrated at their parent company location. Having a closed setup in one place has its obvious advantages in terms of better coordination, efficiency and information security. 

However, multinationals do want to break the mould and connect with and learn from broader ecosystem around the world. The approach though has been more or less ad-hoc,
  • captive centres to fulfill an offset obligation or for access to cost effective talent
  • sponsoring research in relevant areas 
Some multinationals just do it since other are doing the same. 

A more structured and strategic approach can not only deliver operational benefits but can also build competitive advantage. This blog post would highlight a strategic approach to R&D setup and partnerships in different regions of the world.

A regional R&D strategy would be aligned and in sync with corporate and R&D strategy of the company. And it would have following three objectives as its corner stones:
  • Leverage strengths of the geographic region
  • Provide advantage over competition
  • Build strategic relations/assets for the company in that region

To build the above strategy, a broad based research would be required covering various aspects of the given region. 

To analyse the research data and derive meaningful insights, one could use a matrix layout to analyse and rank on multiple criteria. The outcome of the analysis has to be actionable insights related to the three corner stones mentioned above.

However, a strategy is never complete with an executable plan. Following framework is a good tool to derive and communicate the action plan.

For many companies, decision for expanding R&D outside home location is driven by operational and obligational considerations. However, companies gain to benefit more by treating it as a strategic move and putting more thought and diligence behind it.

Sunday, August 9, 2015

Emerging Hyper-local Aggregation markets and startups

Aggregation model of business brings various sellers and buyers on a common platform. Flipkart, Snapdeal, Redbus, MakemyTrip and many more companies have since matured the aggregation model and grown in both valuations and scale of operations.

These aggregators sacrificed profitability to build market share. The nascent e-commerce market and sluggish economy only added to their woes. Soon the long term sustainability of aggregator model came under questioning. But interestingly, the aggregator model is only picking up pace, now in its new avtaar of Hyper-local Aggregation.

New startups have cropped up who are aggregating at the local level of a city or even a neighbourhood. Big Basket is delivering locally sourced groceries at one's doorstep. FoodPanda, TinyOwl, Delyver are delivering food from nearby restaurants. And new players like Grofers are delivering from your trusted shops in the neighbourhood. Then there is Practo who helps locate and rank doctors locally. SeekSherpa aggregates local people who provide tours with real local flavour.

The urban lifestyle is fuelling the demand for such hyper local aggregators. A typical urban consumer has disposable income but not time. They look for convenience and tend to buy experience. It's not the lack of demand but the poor service delivery which can hurt a hyper local aggregator startup. Cracks are already showing up; Cab drivers do not show up, Food orders get cancelled, Low quality vegetables delivered, not enough SKUs. 

Another area of concerns is scale. Can these hyper local aggregators scale up and become unicorns? Or would their growth stabilize at a smaller scale. Unlike Flipkart and likes, these startups are not nationwide. The only way to grow in scale is to replicate their business model in as many cities as possible.

Nevertheless, its encouraging to see new sprouts of economic activity at local levels and should be nurtured. And with creative offerings of these young startups, its certainly interesting times ahead for urban consumer.