shelfesteem

cults or communities

2006-03-17T06:13:00.000-08:00

Vinay Kamat

In the age of interactivity, will brand cults dissolve into communities? Will fanaticism morph into romance? Will consumers be swayed less by brand myth and more by brand awareness? As brands become transparent in the online world, will cult be shorn of mystique?

After all, brands are learning to live with online communities. They are not averse to being criticised by bloggers; they even pick marketing and user insights from them. Here’s what Microsoft's own blogger Robert Scoble posted on March 14. “Microsoft is a consensus culture and consensus (which means everyone has to sign off on things) does avoid trouble, but it also makes for uninspired products and marketing. That is our internal challenge to figure out, that's for sure!”

Why are brands willing to go the extra mile to reveal themselves to their communities? It makes them transparent; it provides an opportunity for users to interact with the brand and offer useful feedback; it develops tons of trust; and it makes the brand highly accessible. In the interactive world, brands cannot afford to be inaccessible.

Openness creates communities; mystique creates cults. Importantly, brand cults are driven by symbolism and ideology. Brand communities are driven by interactivity and transparency.

Here's why brands become cults. "Brands are symbols. We live in a world dominated by commercial icons, total design initiatives, and completely integrated marketing efforts, where products are consumed less for what they are (materially) and more for what they represent (spiritually, or at least socially)," writes Douglas Atkin, in The Culting of Brands, a solid account of customer loyalty.

As customers group themselves into communities, they seek solutions, not symbols. They seek convenience, not sophistication. They desire performance, not promise. Communities don’t just create a feeling of belonging. They ensure that the brand belongs to them.

“Customers ultimately determine what your brand means,” says marketing expert Guy Kawasaki in his blog: "For decades Apple has tried to make the Macintosh brand stand for power. For decades consumers believe the Macintosh brand stands for easy to use. Ultimately, you flow with what's going, and you’ll be thankful that it's flowing at all."

So, have Google and eBay formed cults or communities? By constantly interacting with users, they have created tribes which are not swayed by myth, mystery and mystique, but by the brand attribute of convenience. It is a lifestyle of cutting-edge simplicity. It is a community of critics, not a cult of worshippers.

romancing money

2006-03-17T06:11:00.000-08:00

Vinay kamat

Risk is the biggest differentiator. Take it, and you separate yourself from the crowd. If that doesn’t tickle you, just think: If the economy is beaming, salaries are galloping, and jobs are exploding, what should you do? How do you sense change and pocket it? How do you junk conventional thinking and position yourself for the next big leap? How do you power your career? How do you hitch your wagon to India’s growth engine?

Look around. Your friend has trebled his salary in one year by jumping jobs. Your ex-colleague can’t stop talking about her SUV, the first piece of prosperity she gifted herself on becoming a veep. Your cousin, who runs a VC-funded startup, has bought chunks of real estate across the country. Everyday, you read about IIM freshers setting salary benchmarks. In this cat race, would you like to be a bystander or a marathon man?

More than stamina, you need insight. If you map the change around you, you will see something profound: Even as you are battling IIT freshers in the workplace, your job is rapidly turning obsolete. Two years ago, you could have hung in—even performed—by reinventing yourself. Now, you need to jump on another bandwagon: wealth-creation. It is the mumbo-jumbo of material salvation.

Perhaps the best paperback to carry around these days is a 1997 book that pops frequently on bestseller lists: Rich Dad Poor Dad. Its racy plot lies in the sub-title: What The Rich Teach Their Kids About Money—That The Poor And Middle Class Do Not. If you present you daughter with Rich Dad on her 11th birthday instead of Pride and Prejudice, don’t feel guilty. This is the age of wealth- creation, where hyper mobility, obscene sign-on bonuses, and lavish penthouses, are signs that you have arrived. And, if greed is ethical, why not pay for it through EMIs?

Rich Dad’s author Robert Kiyosaki has a portfolio of tips for the uninitiated. The controversial financial bible can be reconstructed into a few commandments:

1.Focus on assets, not income.
2.Understand accounting, investing, marketing, and law.
3.Master communicating skills.
4.Don’t fear risk.
5.Remember: you are one skill away from success. Find out which.
6.Employ money

Well, you need to read the book to put the canons in perspective. You may even come up with an alternative title: How To Romance Money.

Next time you hear about an executive who has chucked her job at 33, don’t dismiss it. It is the surest sign that India’s middle class is moving into asset class. Interestingly, filthy rich dads may call it rational exuberance.

fun and turf

2006-03-02T20:24:00.000-08:00

Vinay Kamat

Will tomorrow's organizations be bothered too much about culture? After all, culture, as we know it, is linked to hierarchy, process, brand image, strategy, and most importantly, history. But these goal-posts are being constantly shifted in a fast-changing marketplace. In fact, by default, process is becoming culture in today's organization.

But, gradually, process will shrink as firms outsource sub-processes to suppliers. Culture, then, will be a set of shared values. John Micklethwait and Adrian Woolridge argue in The Company that the "dicrete" company could well be replaced by the "network" or the "boundaryless firms of Silicon Valley". These could be an ecosystem of individual entrepreneurs or organizations turning fractal by creating internal entrepreneurs.

Even as the reorganization of the organisation is under way, how do companies prevent themselves from being cultural clones? Indeed, how do they retain their cultural buoyancy and exclusivity despite living on the edge? How do they become cultural enclaves first and profit centres afterwards?

In a piece on Google (June 2004, www.cioinsight.com) management expert Warren Bennis outlined the challenge of creativity: "Even obsessed geniuses burn out. Once the bomb is built, or the PC is invented, the members of the group suddenly realize that they have been working 20-hour days for a long time, and they can't remember the last time they petted the dog or ate a meal with their children. Suddenly, work that seemed like play isn't fun anymore."

Still, despite being in a domain where the business model must always be flexible, Google may have just got its cultural algorithm right.

Who's the typical Googler? What makes her tick? You can get the answers to those questions on Google's site. "Googlers range from former neurosurgeons, CEOs, and US puzzle champions to alligator wrestlers and former-Marines. No matter what their backgrounds Googlers make for interesting cube mates."

"Google engineers all have 20 percent time in which they're free to pursue projects they're passionate about. This freedom has already produced Google News, Google Suggest, AdSense for Content, and Orkut – products which might otherwise have taken an entire start-up to launch."

What Google has done is simple: it has created virtual organizations and individualized corporations within. It has wired itself for tomorrow's necessities. It's a future that Tom Peters has been reminding us: "Buildings are tumbling. Boundaries are vanishing. Temps…are coming. Where 'you' start and where 'I' stop are no longer clear. Where 'I' stop and where 'you' start are no longer clear. How far will it go? Very far."

Yet organizations like Google may have found an answer by creating a fun atmosphere in the workplace. "Forget turfs. Think of people innovating across functions--and delivering. That's Google," says Google's Ashish Kashyap, country head, India sales and operations.

Fun knows no turf. It requires no buy-in. It is a feeling that is equated with quality of life. Just imagine discovering fun where you least expect it: the shopfloor. For the corporation, it is the only way to pre-empt the boundaryless organization.

hair and fire

2006-02-24T08:50:00.000-08:00

vinay kamat

Here’s a true Sunday entertainer—a book straight from the copywriter’s desk. It tells you which soundbites sell, why insights score over ideas, and how to pitch an idea at GE’s Jack Welch, FedEx’s Fred Smith and Pepsi’s Roger Enrico. Phil Dusenberry’s book is an ad zapper: you will look at the world of advertising afresh.

Don’t be misled by the title, though: Then We Set His Hair On Fire. Nothing punk about it. The title comes from a Pepsi ad shoot done by ad agency BBDO featuring Michael Jackson. “Michael’s hair caught on fire from an exploding special-effects fireworks tower at the edge of the stage. It was a fluke, an errant leaping flame that somehow covered enough stage space to attach to Michael’s hair.” Needless to say, the accident—and the commercial—became a phenomenon. And a title.

Dusenberry’s take on advertising—a domain he bestrode as BDO North America’s chairman and chief creative officer—is like an ‘errant leaping flame’ in today’s world of search-driven text ads and viral marketing. His creative epiphanies hardly make sense to a generation that hates to listen; they may be even out of tune in a world of comparison shopping. But his is a world that creatively triggered romance between the consumer and the brand.

That romance is now called relationship. Cupid has changed, too. Gone is the copy writer. Instead, you have a one-on-one relationship blossoming in cyberspace between the user and the brand.

Dusenberry’s book centres around insights that created brands. Like GE’s famous one-liner, We bring good things to life, which was born in a cab as DBDO’s creative team “honked, bounced, and stalled our way through traffic.” Then came Pepsi’s The choice of a new generation, a super-phrase that was coined 20 minutes before presentation.

The best part in the book is Dusenberry’s belief in insights: “In the advertising world, a good idea can inspire a great commercial. But a good insight can fuel a thousand ideas, a thousand commercials…At the risk of overstating the value of We bring the good things to life, I would argue that it was more than just effective advertising slogan. It also explained the fundamental rationale for (Jack) Welch’s company: every business GE goes into must provide a benefit to some consumer constituency, must make people’s lives better.”

But where does Dusenberry’s ‘insight moment’ fall? Does it fall between innovation and execution? Can it be applied to other wings of business or other organizations? Does it qualify as an out-of-box thought? Is it the answer to creative advertising’s ills?

Here’s the last word from Dusenberry, on ‘insight moment’: “The moment you hear it, you can’t see the world in any other way.” That is good old creativity reminding you that it is still around. You may need a Sunday and Dusenberry’s book to realize that.

delight is discipline

2006-02-24T07:27:00.000-08:00

Vinay Kamat

Customer satisfaction comes in many names and forms. Some call it romance, some think it is delight, some equate it with value-creation. Very often, questions are raised about delight—which is a step above (customer) satisfaction. Is there a level above delight? Has anyone reached there?

Most books on customer satisfaction suffer from a 'purple cow' syndrome. The term, coined by marketing maven Seth Godin, refers to something remarkable, something awesome, that you come across in what is otherwise a boring world. So, is there a 'purple cow' in the black, white or brown world of customer satisfaction?

Yes, there is. Written in 1995, The Discipline of Market Leaders still survives as a purple cow in the brown world of customer satisfaction. Here, authors Michael Treacy and Fred Wiersema show us through case studies how firms rule the market by creating a customer discipline inside and outside the organisation. Put simply, they talk about three value disciplines: operational excellence, product leadership, and customer intimacy.

Operational excellence is about continuous improvement; product leadership is about positioning; customer intimacy is about bonds. This disciplined approach helps firms to institutionalise spontaneous interactions with customers. It tells CEOs how and why to empower the last mile—the people that constantly interact with the customer.

To explain spontaneity and empowerment Treacy and Wiserama fish out a Home Depot anecdote, which centres around founder Bernie Marcus. In the back-office of one of his stores, Bernie "noticed a Sears Craftsman wrench lying in a pile of items that customers had returned. Marcus called the store's customer-service people together, held up the wrench, and asked who had accepted it as a return, since Home Depot doesn't sell Sears wrenches. One employee admitted guilt, whereupon Marcus broke into a grin. This was a great example, he said, of someone taking responsibility for doing the unorthodox to please a customer."

The example provokes one key question: How do you suffuse your organisation with an 'unorthodox' spirit? You don't, you just create the right value disciplines throughout the organisation that focus on product quality, customer focus, and brand positioning.

Such a culture will automatically empower last-mile employees to satisfy the customer in out-of-box ways to create delight, delight and more delight. But before that happens, firms must set up route-maps for delivering superior customer value. It is a simple process that Treacy and Wiersema narrate so delightfully.

why you need a brand manager

2006-02-17T00:32:00.000-08:00

Vinay Kamat

“Just do it”, said a sneaker, and became a super-brand. I would say something similar to the knowledge workers out there innovating 24/365 to crack the brass-ceiling of hierarchy. I am sure if a TV channel launches Kaun Banega VP, even BPOs will stop humming. Every one wants to rise in the organization but nobody has been able to explain how, satisfactorily.

So, if you want to shine in 2006, all you need to do is to get yourself a brand consultant or a Velcro Manager (VM) who sticks by you through thick and thin. Once you have one, you need someone else to fill up the brand management team: you need an office spouse.

Office life is getting harder. Just make a list of what your boss expects of you: month-on-month leaps in revenues; quick rollout of Six Sigma in obscure places like canteens; fluency in Chinese, in just six months; understanding of Google’s algorithm to ensure your company can be in the top 3 search results; idea of Taimur Lang’s out-of-box military tactics; ability to discuss Kate Moss’s reinvention in the board-room and apply it to some of your own dying brands; working knowledge of ancient Indian nuptials to impress your joint venture partners; Deepak Chopra’s wellness mantras …The list is bottomless. If you look like a monk hit by a Ferrari, it’s natural; all execs feel so at the end of the week.

Believe me, 2006 will not be the Year of the Organization Man. It’ll be the Year of the Renaissance Man! The concept is catching on in other fields too. “I'm Michelangelo, and you're my Sistine Chapel,” says Will Smith, playing a date doctor, to his client in the movie Hitch.

So, who’s your Velcro Manger—your own Michelangelo? If the idea of having a brand manager still hasn’t sunk in, here are some pre-dinner apperitifs:

1. Your flattest organization has just two layers: brands and commodities. So, the upward rise is tougher and longer. Climbing Mt Everest without O2 is easier.

2. People have personal yogis to manicure minds and personal soothsayers to show the futures. But none of them can offer you the ultimate career recipe. You require a brand druid to brew your future.

3. You can make an impression on your boss only in increments. He may like a PowerPoint presentation on market dominance with King Kong backgrounds since he’s a movie-freak. Or he may like the sound of verbs like “tee off” because he’s a habitue of the greens.

4. You may create a Sistine Chapel in the organization but unless somebody creates a blog-type buzz around it, it may turn out to be a Christmas decoration.

5. You may suddenly realize that standing-up-for-others isn’t a virtue anymore. Maybe, you need a brand-manager to tell you the PUTs (plain urban truths) of corporate life.

6. You may need to develop a mental algorithm which tells you when to keep a high profile and when to sound dumb? Bosses love human failings; they hate flawless threats.

7. Bosses don’t wipe their slates. So a mistake in 1995, when you first joined the organization, may figure in your 360-degree performance appraisal in 2006.

8. Multi-tasking is a test. Bosses spring it on you to gauge your maturity. It only works at home; in office, it makes you look like a hands-off baby-sitter.

If you think these questions have provoked the commodity in you, then start looking for a VM. Typically, potential VMs are natural game-theorists and can provide multiple outcomes. They are brand-killers, since their idea of pushing you is based on pulling down somebody.

But even as you get a VM, search for an OS as well. They are inseparable. Nowadays, it’s fashionable to have an OS, or office spouse. It’s another window to your future. You don’t need to have an affair to have an office spouse, you just need to exchange sympathies. After all, the modern office is like a cutting-edge trench in which you relentlessly duck to perform. When the tasks are too much to handle, you need an emotional reboot. You need your dear office spouse.

As 2006 gets going, remember blue ice. It means you could be knocked out when you least expect it. So, start a blog and find your own VM and OS if you don’t have the courage to find them in person. Alternately, find an OS and let her help you find a VM. And please create a relationship, not an affair.

In short, in 2006, think like a brand. Don’t ogle like a commodity.

[First printed in Outlook's 2005 yearend issue]

multiducking

2006-02-17T00:28:00.001-08:00

Vinay Kamat

A month from now you could be sitting in front of your boss trying to answer that tricky question. "Well, tell me, how well have you multitasked?" Your performance appraisal would depend upon how effectively you have applied the multi logic to work.

Have you, for instance, mentored subordinates, upheld organizational values, listened to 100 customers on average every month, suggested 10 business ideas during the year, helped hire talented people, met delivery schedules every time, doubled team productivity, suggested smarter ways of production, and remained virtually connected to your boss when not in office? And, do you promptly answer 400-odd emails a day and read enough books and journals to maintain your cutting-edge?

Before you protest, let us accept multitasking as a given in an economy where multi is the norm: multiplex, multinational, multimedia, multigaming…

Plain words like task, chore, assignment, stint, project, undertaking and duty have all begun to resemble multitasking. Naturally, the Dept. of HR revolves around one performance criterion and measures you accordingly. Shorn of Excel and Word formats, a typical HR performance review form would encompass the following:

How many tasks can you perform at a time?
Will you have the RAM to add two more tasks?
Do you compromise organizational values when you multitask?
How many multitaskers do you have in your team?
Have you been able to save cost by multitasking?
Are you able to implement a project end-to-end? Give examples.
Can you resolve all HR issues yourself?
Have you declined any task because of lack of time?

US researchers Joshua Rubinstein, David Meyer and Jeffrey Evans, who investigated the new corporate phenomenon, point out that "subjects lost time when they had to switch from one task to another, and time costs increased with the complexity of the tasks." So much for productivity.

How about an alternative? Management consultant Lisa Haneberg suggests the idea of "multichunking" in her blog: "Chunking means carving out blocks of time to work one task, project, or activity. The blocks should be at least one hour long and you should get in several two-hour chunks per week."

Despite its flaws, multitasking just can't be wished away. It will keep figuring in job interviews and performance appraisals until someone comes up with a better idea of performing. Nobody will. For, multitasking allows bosses to shift goal-posts. Its ambiguity attracts HR managers.

For all its complexity, multitasking develops one dominant trait, or skill, in an individual. Other traits, then, become accessories. In the case of Alexander the Great, his "connective style" defined his personality. Says Partha Bose, in Alexander the Great's Art of Strategy: "Before any battle he would ride up and down the front, speak to his men directly, call out to familiar faces by name, and remind them of previous acts of bravery." It was a simple gesture , not a process called multitasking.

intimacy & hijack

2006-02-10T03:41:00.000-08:00

vinay kamat

Man is a hyper-interactive animal and the net is his preferred medium. Well, if that is what the world is coming to, marketers must rethink the battles for customers’ minds.

Good old marketing was a process driven by positioning. Sharper the focus, cooler the message, and greater the hype, the better were the chances of success. But as brands crowded minds and markets, clarity and simplicity became the buzzwords. Significantly, informality brought marketers closer to customers.

John Grant defined the mood in The New Marketing Manifesto: “It is time for marketers to get off their pedestals and get closer to the real world. You can think of it as a kind of marketing informality, a bit like Casual Friday.” One of the examples Grant highlighted was Pizza Express which set up its kitchen amidst customers, showing them their pizzas were all hand-made. That was how close the brand got to its customers.

Even today, the king of all marketers, Procter & Gamble, relies on the experiential. As Jim Stengel, head of marketing, P&G, told Financial Times recently: “You have to be experiential. And some of our best ideas are coming from people getting out there and experiencing and listening.” Little wonder then that Stengel is not hot on focus groups.

While the net has turned brand management into interactivity—where usage creates buzz—it has also given the customer a big say in defining brand persona. Hotmail, Napster, and Google are creations of the online community. True, they were engineered by codies, but they became what they are after numerous one-on-one interactions, user tips, and word-of-mouth marketing.

Customer proximity is passé. Customer involvement is the new thing. In the open-source era, it invites users to engineer the product by rewriting the code, partly or wholly. The idea of new-age marketing is simple: let the user create the brand. After all, the networked consumer, the netizen, is as savvy as the marketer. She dislikes aggressive push strategies, preferring to be drawn to the brand instead. She prefers informality to formality. And she likes the relationship to keep evolving.

Alex Wipperfurth’s Brand Hijack maps this changing brand universe in a provocative statement: Let the market hijack your brand. As he explains: “Marketing managers aren’t in charge anymore. Consumers are. Across the globe, millions of insightful, passionate and creative people are helping optimize and endorse breakthrough products and services—sometimes without the companies’ buy-in.”

For consumers, it’s not just a buy-in. It’s a live-in which strengthens the relationship between the product and the user. It’s not loyalty. For, loyalty is a lock-in. In live-in, you are not bound by a brand’s values. You chose the relationship, you architect it, and you keep evolving. In the structured world of brands, such unfettered, informal, relationships work.

For marketers, it is the best way of knowing whether a brand can survive intimacy or interactivity. It is perhaps the only way.

toughest P

2006-02-09T08:07:00.000-08:00

Vinay Kamat

It is the toughest P of marketing. It is the ultimate positioning statement. Marketers are still grappling with this P in internet space. For, Pricing is not about numbers alone. It is strategy.

“Too often, however, greed gets confused with positioning thinking,” say Al Ries and Jack Trout, in their best-selling book Positioning. Where you perch the product in the customer’s mind through ads is critical. It sets the price point. It creates the value proposition.

But how do you establish a price-point when comparison shopping—using powerful search engines to scour the net for best prices—is gradually becoming the norm? How do you showcase value when brands are turning into utilities in cyberspace? How do you compete in a space where buyers set the price and sellers bid?

Forget new economy. Pricing just lacks innovation. Says marketing guru Philip Kotler: “Many companies do not handle pricing very well…Pricing is too cost-oriented; price is not revised often to capitalize on market changes; price is set independent of the rest of the marketing mix…and price is not varied enough for different product items.”

Who said pricing was easy? Yet Rafi Mohammed has come with competent answers in his recent book, The Art of Pricing. The sub-title has a tear-your-hair effect: How To Find The Hidden Profits To Grow Your Business. It simply means profit lurks in very nook and corner of your office. A net price increase of 1 per cent, for instance, could translate on average into an 11% rise in operating profit.

As the book underlines, pricing is not about number-juggling alone. It is about creating team spirit, as Ford Motors realized. When it shared its pricing information with dealers, they realized what models to push. They started focusing on higher-margin cars, raking in bigger profits for the company.

Pricing helps companies to build ecosytems around brands as well. Sony resisted the temptation to increase the price of its gaming console, PlayStation 2, when it was launched in 2000. Sony’s retail tab was $299 when auction sites were hawking it for $950, writes Mohammed. While Sony’s pricing strategy hinged on market creation, technology adoption, and media hype, the company was keen on creating a gaming ecosystem, comprising consoles, games, and message boards.

If anything, pricing helped create a culture called PlayStation.

Perhaps the best quote in Mohammed’s book is from Sun Microsystems CEO Scott McNealy, which first appeared in Fortune magazine: “In the whole history of Sun, we have never known what demand is, what elasticities are, or what the ‘right’ prices are for our equipment.”

It shows why pricing is not just a process but an art and a strategy. Indeed, it is a short-code for positioning. And those that are not clear about their positioning miss the point—and the price.

customer's dilemma

2006-01-26T12:16:00.000-08:00

Vinay kamat

Can innovation sell? In the dotcom era, the idea was christened the next big thing and oversold. It explained the power of the idea but failed to explain the boring part: how to move things from Points A to Z. While A represented imagination, Z was all about execution. When dotcoms went bust, innovation became suspect.

What was once a motivation tool for generals, and an intrinsic part of their strategic vocabulary, became a worn-out cliché nobody was prepared to buy. Innovation had not only become a generic word, it was no longer fashionable.

How stale is innovation? We may have to come up with some other expression for breakthrough transformation, says Vijay Govindarajan, author of 10 Rules For Strategic Innovation. Sometimes it can be entrepreneurial and out of the box—
just like the last 15 minutes in Tamil films.

Typically, as Govindarajan points out, this is the most exciting part of the film. The heroine gets kidnapped in a Merc by the villains. But her rescuer, the hero, uses a horse to outrun the powerful car. He rides down the hill, across fields, and through other hurdles, to win the day. “If that isn’t an innovative solution, what is?”

The horse versus Merc anecdote describes the odds that innovators have to battle against, which is amply visible in India’s entrepreneurial success. But without the choreography of execution, innovation can’t budge, let alone gallop.

In his well-researched book, Govindarajan details what comes between an idea and execution. Tomorrow’s businesses must forget, borrow, and learn. They must forget, or discard, templates that create success for the parent; they must borrow best practices and assets from the parent; and they must learn to create their own templates of success, improving with every step.

It’s really the last step that drives innovation in the organization. But for all his emphasis on execution, Govindarajan is a firm believer in the revitalizing role of innovation. An organization that creates a startup culture within, by taking the forget-borrow-learn path, prolongs its life. “And I’m all for increasing the longevity of organizations. The loss of an organization is the loss of knowledge, talent, and jobs. It’s huge.”

Of course, there are cases where independent startups have sounded the death-knell for organizations. Take Google which did not have any parent to inspire or bankroll it. Or Yahoo, which created a crowd of followers with its content aggregation model. Does the future then lie outside the organization, where upstarts like Google keep prowling and scoring hits?

It all depends on a firm’s ability to sense the birth of a new market. It hinges on the speed at which it breaks the tyranny of customer satisfaction. After all, customer satisfaction is the emotional connect with the loyal customer. Firms that keep satisfying her ought to win. But what if the loyal customer is not a savvy customer? What if she is not able to sense change and demand tomorrow’s products from the firm?

Such customers can disrupt a well-established player, as Clayton Christensen documents so well in The Innovators’ Dilemma. For organizations venturing into the digital era, it’s really a question of what, and how many, customers to forget.
It also depends on whether innovation is bred within the organization, on its periphery, or outside, in a skunk works.

Until that is decided, least expected competitors like Google and eBay will challenge the organization. And hasten its demise.

business of paranoids

2006-01-26T08:16:00.000-08:00

The 1990s were the best years of management. Re-engineering, Six Sigma, Core Competence, the Customerised Corporation, Mass Customisation, and a host of other ideas dominated the era. Michael Porter, C K Prahalad, Gary Hamel, Michael Hammer, Jack Welch, Tom Peters, among others, defined the rules of contest.

Despite the proliferation of ideas, one unusual writer-he was a practitioner like Welch-stood out. The odd guy: Intel’s Andy Grove.His book was a guide to deal with inflection points: dramatic changes in the rules of business. Inflection points could vapourise companies. What caught the fancy of the management world was the book’s title: Only The Paranoid Survive.

If the purpose of companies was happiness — customer happiness, that is — companies had to reflect that mood inside as well. How could paranoid workers create delighted customers?Well, Grove wasn’t just defining the aggressive mood of the 1990s-a decade where IBM was being pushed into the pit, Microsoft was acquiring pole position, and Intel was overtaking, or reinventing, itself. He was talking about the future, where upstarts could hobble giants.

To understand ‘paranoia’, just look at Google and Sony. One has changed the rules of competition; the other, once a byword for innovation, is playing catch-up.Grove, Intel’s then CEO, was forthright and intuitive even as he was explaining his book’s unusual title: “Business success contains the seeds of its own destruction.The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left… the prime responsibility of a manager is to guard constantly against other people’s attacks and to inculcate this guardian attitude in the people under his or her management.”

Grove’s title has resonance even today. For, paranoia has two aspects. First, never tire of watching competition. Second, paranoia leads to innovation.Steve Bennett, CEO of accounting software major Intuit, gave an idea of the first aspect when he told USA Today recently: “It’s better to be paranoid and focus on doing everything you can to eat someone else’s lunch rather than being the person who gets their lunch eaten.”

Ravi Kant, managing director of Tata Motors, dwelt recently on paranoia’s second aspect at the Mumbai launch of strategy guru Vijay Govindarajan’s book, Ten Rules for Strategic Innovators. Great organisations, he said, require a crisis to think anew. He was talking about the Rs 500 crore loss his company incurred a few years ago and how it jumped back into the black by improving processes and creating new local and global markets.A crisis helped the organisation to reinvent itself.

So, as Kant put it, organisations (do) need to create a sense of crisis to manage the future better. In a sense, he was echoing the message of paranoia. As Grove wrote in 1996: “Most companies don’t die because they are wrong; most die because they don’t commit themselves.”Indeed, it wouldn’t be wrong today to say “only the paranoid win.”

For, paranoia is a state of mind that senses change and welcomes it. It makes innovation possible by focusing the mind.

real madrid and content

2006-01-13T03:52:00.000-08:00

Vinay Kamat

Is Real Madrid a content company? The answer to that question provides a glimpse of the economy that we live in, where content drives digital strategy. Not surprisingly, Microsoft, Apple, Intel, Google, Yahoo and a host of other digital players are moving towards a single destination: the living room.

What they seek to do is simple: create mother platforms that manage content flows from all electronic devices and delivery channels. Such a platform will be the nucleus of the digital home’s content ecosystem, which includes TVs, PCs, gaming consoles, sound boxes, PDAs, digital cameras, and other electronic devices.

The big challenge is not technology, nor technology platforms, but content architecture. Already, technology has moved beyond our expectation. Take Microsoft’s Xbox, for instance. Its high-powered CPU, HD gaming display, and superior graphics make the console a pocket-rocket. Look at content delivery channels which are becoming smarter, quicker, and smoother. Yes, broadband is becoming broader and faster.

With technology setting a scorching pace, companies are now focusing on content architecture. Here’s Kodak CEO Antonio Perez’s take on the future, which he mapped at the International Consumer Electronics Show in Las Vegas last week: “Consumers own the future of digital imaging—their pictures, their memories, their life’s data, the stories they can tell about their life. But it’s no longer about just pictures or voice, data or text. It’s the future where information and imaging become one, and consumers can access the important images of their life anytime, anywhere.”

What Perez is talking about is content architecture. It’s an area that is still evolving because nobody is sure how content will be consumed or who will be tomorrow’s content king? Will it be PlayStation, iPod, Google or Windows?

iPod may have been a breakthrough but it’s really iTunes—the business model that made music downloads possible—that is Apple’s biggest idea. It made a music revolution possible by pulling music labels into the digital era. It built a novel content architecture: music on tap.

In the Entertainment Economy, author Michael Wolf describes a similar transformation: “As retail stores began to reproduce the look and feel of theme parks, it became clear to me that the line between entertainment and the rest of the economy had disappeared.”

In the new internet era, the line between technology and content is disappearing too, with technology companies seeking bits, instead of chips, to rethink their strategy.

So, if Google can be labeled a content company, why can’t Real Madrid or BCCI (Board of Cricket Control for India)? As the football club’s corporate managing director, Carlos Martinez de Albornoz, describes it, in Financial Times: “We structured ourselves as a company and began to think of ourselves as content providers. This was an authentic revolution.”

The content kickoff in today’s web championship is an authentic revolution too. It will decide whether tomorrow’s economy will be an entertainment economy, an experience economy, a search economy, or an economy of pods.

middlescence

2006-01-06T03:55:00.000-08:00

vinay kamat

At the height of corporate structuring in the mid-nineties in

India

, one HR species was grabbing all attention: the middle manager. Caught between a demanding top management and a restless entry level, middle management was being squeezed into irrelevance. Between the ages 45 and 55, middle managers could either reinvent themselves or get marginalized.

Those days CEOs would harp on downsizing, short-sizing, and smart-sizing. But what they were all really talking about was the middle manager. HR departments were busy drawing up retraining and retooling modules to help middle managers morph into hybrid men, with multiple skills and more KRAs.

Nothing could explain the phenomenon better than an obscure word just waiting to be put into circulation: middlescence. A combination of ‘middle’ and ‘obsolescence,’ it was intelligently coined by some management writers. It symbolized the fat, multi-layered, organisation.

Often, it was left to the organization to yank a manger out of obsolescence brought about by newer technologies, changing work ethic, and high-powered growth. At a big multinational that I visited in November 1996, for instance, a middle manager had just moved out of his shop-floor function which was getting redundant. Top management had offered him another job: canteen management.

Even though he initially lacked the skills in canteen management, the manager was able to learn them fast enough to bag two consecutive ‘best industrial canteen’ awards. His approach of learning everything fast was an antidote to middlescence.

During the first internet wave, which lasted in India until end-2000, middlescence reflected the agony of the analog generation: it was caught right in the middle. But since then, the middle has started aggressively reshaping and recalibrating itself to cope in an era where email, Google, PDAs, and PowerPoints have become workplace fixtures.

Even as middlescence has been reinterpreted by the brave middle manager, it has had an impact on life as well. Wordspy.com, which showcases newly-coined words, defines it as the turbulent, rebellious middle age of the baby-boom generation. Talking about middlescence, America’s retirement guru Ken Dychtwald told BusinessWeek Online that the period 50-70 in one’s life represents the search for a new identity. As he summed up: “It’s not the end of life but really just the third quarter.”

If you broaden the definition of middlescence, you will realize that it affects all of us at all ages. It is a strange urge to do something different in your career or life, which could provide the one thing we miss: satisfaction.

The picture of middlescence is incomplete without Po Bronson’s fascinating account of people who have been courageous enough to chart their own lives or careers: What Should I Do With My Life? In his introduction to the book, Bronson describes his literary journey: “Looking for guidance and courage…I became intrigued by people who had unearthed their true calling, or at least those who were willing to try. Those who fought with the seduction of money, intensity, and novelty, but overcame their allure. Those who broke away from the chorus to learn the sound of their own voice.”

Now, Bronson expands the theme further in a riveting account of families: Why Do I Love These People? Even as it explains the idea of the family through real-life, moving, experiences, it shows what makes people different.

Middlescence is not just about careers or middle managers. Its answers don’t lie in management or psychology books. It’s an idea that opens a whole Pandora’s Box of life’s intricate issues. Like the newly-appointed canteen manager, it’s about trying. It’s about willingness. And it’s more than a job.

Indeed, it’s an interesting time of your life when you ask: What next?

toyota toyota

2005-12-23T06:58:00.000-08:00

vinay kamat

9.06 million cars. That’s Toyota’s production goal for 2006, which will make it the world’s largest car-maker. It would be a big moment for a company that has always relied on lean manufacture to shift its paradigms. In doing so, Toyota has given operational excellence a new meaning: strategy-on-the-fly.

In their paean to Toyota, in The Machine That Changed The World, James Womack, Daniel Jones and Daniel Roos define the strategic dimension of lean production: “[It] combines the best features of both craft production and mass production—the ability to reduce costs per unit and dramatically improve quality while at the same time providing an ever wider range of products and ever more challenging work.”

Now, kaizen, or the force that drives lean manufacture, is a culture of relentless improvement. The beauty of the Toyota Production System (TPS) is to blur the boundaries between improvement and innovation. In an insightful piece in the Harvard Business Review, Learning To Lead At Toyota, Steven Spear describes the induction process of a top manager in its plants in the US and Japan. He details how lean manufacture is not only a bottom-up communication process, but a change agenda as well.

Change, after all, comes from total knowledge of what you are doing. In essence, kaizen is art of leveraging knowledge flows from every nook and corner of the organization to create tomorrow’s products.

Eli Goldratt, author of Goal, underlines the importance of creating two simultaneous paradigm shifts to forge ahead of competition. Microsoft is banking on two: web-based products and gaming. Toyota appears to have created two paradigm shifts through quality (kaizen) and technology (Prius). Yet both are spin-offs of its lean culture.

A blog on soultek.com provides the answer: “Toyota does acknowledge that cars require vast amounts of energy to function, i.e., trillions of dollars of gasoline, refined from environmentally destructive oil. To ignore this would be to ignore kaizen; therefore, Toyota didn’t give up when the first Prius hybrid car was laughed at by automotive ‘experts’.”

The original brief for Project G21, or Prius, came in kaizen language. As Jeffrey Liker points out in The Toyota Way: “The only real guidance was to develop a fuel-efficient, small-sized car. In addition to the small size, a distinguishing feature of the original vision was a large, spacious cabin.”

In a recent column, Financial Times’ Simon London describes the three strategic steps that Toyota took to stay ahead: lean manufacture, design and marketing, and hybrid-power technology. Only a multifocal strategy, focusing on craft, cost, and change, can help an automotive brand to position itself at both ends of the product spectrum: from Qualis to Lexus to Prius.

If there’s anything to learn from Toyota, it’s the art of challenging oneself to do infinitely better. Once Toyota becomes the car king, perhaps kaizen will enter the pages of management as continuous innovation—a tool that has continuously reinvented an industry.

guru murthy

2005-12-23T06:55:00.000-08:00

Vinay Kamat

N R Narayana Murthy never appears in the league of management gurus: people who successfully mix vision, concept, and experience to provide route-maps to business. Yet the chairman and chief mentor of Infosys has enough experience, and ability to distill that experience into simple do’s and don’ts, to be part of the guru club.

Like Bill Gates, Lou Gerstner, Jack Welch and Ricardo Semler, Murthy has not only created an institution, he has consistently passed the severest global tests of scale, strategy, and (customer) satisfaction. If Murthy—who ranks among the world’s 10 most admired CEOs in a survey by Economist Inteligence Unit and Burson-Marsteller—were to write a book, he would surely give a new zing to management literature—a discipline that thirsts for plain truths.

Although the story of Infosys is now part of business folklore, the intricate details of process creation, talent management, succession planning, brand-building, inflections points, and genuine Indian leadership, can only be captured in a management book. By writing about his company in Maverick, Brazilian entrepreneur Ricardo Semler opened a new chapter in management, by redefining empowerment.

But what would Murthy write on? Maybe about the heart, not the mind alone. As William Henderson, former CEO, US Postal Service, explains, in Wisdom of the CEO: “Organizations do not thrive on mind alone. They need heart. Their systems may be great, their strategy cunning, their incentives world-class, but without heart an organization can never reach or go beyond its limits.”

Most Murthy-isms are about the heart. They turn management into a set of values that one must practice to inspire oneself. Here’s a short-list of Murthy’s defining moments:

On values: “The Infosys value system can be captured in one line: the softest pillow is a clear conscience.” [In a lecture at Wharton School]

On vision: “I have realized, over the years, that a powerful vision expressed as a simple sentence, capturing the core of our values and aspirations, enthuses generation after generation of employees in the company.” [Lecture at Wharton School]

On self-esteem: “We have to create a grand, noble vision which elevates energy, enthusiasm and self-esteem of everyone in the company while ensuring that everybody sees a benefit in following the vision.” [At a meeting of the World Economic Forum]

On people: Work hard and smart for eight or nine hours…Being in the office for long hours, over long periods of time, makes way for potential errors.” [Figures frequently in discussions on the web]

Jim Collins, a management guru Narayana Murthy often likes to quote, gives an interesting insight into greatness, in Built To Last: “Everyone would like to be the best, but most organizations lack the discipline to figure out with egoless clarity what they can be the best at and the will to do whatever it takes to turn that potential into reality.”

Indeed, management literature requires an egoless simplicity to clear the thicket of jargon that fills its pages and fogs its messages. Like Semler, mentors like Murthy can create a new discipline in management literature: pure simplicity. It’s a language that readers of management sorely miss.

India’s top managers are top-notch, says Goldratt

2005-12-03T02:58:00.000-08:00

Do you have a mafia offer? Business guru Eli Goldratt, 59, throws that question at a gathering of CXOs in Mumbai, who have all come to savour his insights. “It’s an offer that your customer can’t refuse,” clarifies Goldratt. Such an offer helps create competitive edge—and value. “But your edge can vanish in no time since competitive advantage is just a window of time,” he warns, with an air of suspense you often encounter in his best-selling business thriller Goal. Even as he pats India for having the best top managers in the world, he points to tomorrow’s challenge: two paradigm shifts instead of one. Goldratt spoke to DNA’s Vinay Kamat about his experiences as a consultant and teacher.

Q: You speak of two simultaneous paradigm shifts to create a competitive edge? How do you do that?

A: One paradigm shift is not enough. A paradigm change in sales must be matched by one in operations. Both have to be in synch, and deliver, to create viable vision.

Q: You have labeled strategy as “long-term bullshit” and have counselled managers to chuck strategy books into the ditch. Is strategy a self-realization that comes from full knowledge of organizational constraints?

A: Yes, that’s true. I find people building plants without (properly) assessing market opportunities. When I see what people are doing, I am reminded of gambling in Las Vegas. They [CEOs] call it strategy and continue to do so.

Q: India’s real infrastructure, as you say, is not ports, roads, and airports. It happens to be top management, and you rate India higher than the US and Europe on talent? Why?

A: That’s true. We have had to hold back managers during our management programmes in Indian companies. Elsewhere, we have to push managers. The time we require to train people here is half the time it takes us in other countries. In India, the level of intelligence is higher on average; the openness is higher; the ability to critique is higher. Indian managers should have a superiority complex instead of an inferiority complex.

Q: In your book, the best leaders are those that provoke, not provide, solutions. Have you come across such leaders?

A: The best example of such leadership is Warren Buffet. He does that beautifully. Of course, the other example is me. What defines such leaders? It’s their ability to figure out the solution but exercise enough self-control not to reveal it. Indeed, it’s their ability to remove the stumbling block rather than provide the solution.

do you see the goal-posts?

2005-12-03T02:44:00.000-08:00

Vinay kamat

In the hands of Eli Goldratt, management can turn into a page-turner. As a discipline that involves individuals and their personal lives, management needs to speak to them like a novel. It must grip their imagination, entertain them, provoke them. For, ultimately, management is self-realization.

No one explains this better than business guru Goldratt. His book Goal, which he co-wrote with Jeff Cox, is not just a celebration of his experiences in management; it’s a true action-thriller. It’s about a plant manager, his
demanding boss, his unhappy personal life, the fear of losing his job, the
search for solutions, the chance discoveries, and the final realization. You
have to read Goal to understand how Goldratt handles characterisation, conflict, climax, and catharsis.

For Goldratt, catharsis is simply an awareness of oneself. As he says in the foreward to Goal: “If we can better understand our world and the principles that govern it, I suspect all our lives will be better.”

When he visited Mumbai last week to talk to CXOs about his work and ideas, he provoked his audience by trashing strategy: “Strategy is long-term bullshit…Throw your strategy books in the ditch.” Without an understanding of your constraints, how to leverage them, and the purpose of what you are doing, strategy is meaningless. It is just a mental leap without the wings to hold it up.

Despite being racy and suspensful like a John Grisham thriller, Goal has lots of philosophical takeouts. Here’s one big-picture insight: “Just remember we are always talking about the organization as a whole—not about the manufacturing department, or about one plant, or about one department within the plant. We are not concerned with local optimums.”

And here’s a deliberate remark by one of the characters, which reflects the shortfalls of today’s top managements: “…you cannot understand the meaning of productivity unless you know what the goal is. Until then, you’re just playing a lot of games with numbers and words.”

Perhaps the thriller is the simplest way of not just telling a story, but simplifying the conflict in the organization. In real life, too, simplicity unlocks complexity. You only need to believe in it to break convention. Only then will you be able to see your organisation’s goal-posts. That’s the simple tip in Goldratt’s revolutionary idea: Goal.

The restaurant that Jack Welch built

2005-11-28T06:40:00.000-08:00

vinay kamat

Jack Welch is always a fascinating read. As the CEO of GE between 1981 and 2001, Welch did what no CEO would have dared to: create a new GE.

For, the GE that Jack was rebuilding was already a global giant. But why did he fix it? That’s the central question every Welch best-seller tries to answer.

In short, Welch saw GE as a nimble giant, not a global goliath. He saw GE as a culture of best practices. And Welch prepared GE to face the future: cost warriors from Asia, particularly China, who are stampeding competition today.

In a Financial Times-PwC survey (Friday, November 18), Welch ranks second among the world’s most respected leaders, after Microsoft’s Bill Gates; he ranks third among the world’s most influential management gurus, after Peter Drucker and Bill Gates. But is Welch really a guru?

Actually, he is a CEO’s guru, a mentor who is able to granularise leadership to a few why’s and why-not’s. In all his books, Jack: Straight from the Gut (which he wrote with John Bryne in 2001), and Winning (which he wrote with his wife Suzy in 2005), Welch exudes the passion and enthusiasm of a Peter Drucker. It’s only his GE-ness (he spent 40 years in GE) that makes his universe of observation smaller. Still, Welch has the ability to bring concepts alive through his experiences as manager, entrepreneur, leader, and writer. It’s like Sony’s Akio Morita constantly bringing a new zing to the repetitive life in the organization.

“There is no perfect business story. I believe that business is a lot like a world-class restaurant. When you peek behind the kitchen doors, the food never looks as good as when it come to your table on fine china perfectly garnished. Business is messy and chaotic,” says Jack, in Straight From The Gut.

In Winning, Welch tells managers where to start: “In my experience, an effective mission statement basically answers one question: How do we intend to win in this business? It requires companies to make choices about people, investments, and other resources, and it prevents them from falling into the common mission trap of asserting they will be all things to all people at all times.”

That’s nothing new; Michael Porter has said that. But Welch also created the templates of implementation; each template was a best practice at GE, like Six Sigma (a quality-enhancing tool). It not only impacted profitability, it gave a new voice to GE’s people.

It’s a mood that Control Your Destiny Or Someone Else Will (the 1993 book written by Noel Tichy and Stratford Sherman) captures completely. Tichy describes the scene in GE’s training centre: “(Ten) young college graduates, all recently hired as GE junior managers, were ferociously debating two propositions scrawled on a flip chart… Jack Welch is the greatest CEO GE has ever had. Jack Welch is an ***hole.”

Such irreverence, notes Tricy, could have only flowed from a culture of openness and confidence. It’s easy to conceptualise such inflection points with a few graphs, PowerPoints, and buzz-words. But the real success lies in institutionalizing something that is constantly changing. That was the restaurant that Jack meticulously built.

on peter senge

2005-11-22T04:12:00.000-08:00

Not a knowledge guru, but a community organiser. That's what Peter Senge, 58, would like to call himself. For, the author of Fifth Discipline (1990) and Presence (2004) has focused all his work on creating the learning organization--a community of people who continuously enhance their skill-sets not to survive but to innovate. Senge's organization creates leaders at all levels--learners who function like a networked community. Senge, who met DNA's Vinay Kamat in Mumbai on Monday, speaks about his experiences with companies and CEOs.

Q: Fifteen years after the publication of your book, have organisations become wiser? Or are they still grappling with the basic question: How do we create a learning organisation?

A: It's a pretty difficult world out there. Organisations are under great and constant pressure. The environment has only got tougher the last 15 years. There's more short-term pressure today. But there have been achievements in pockets too. For instance, there's a lot more pressure today on organisations to focus on social responsibility. So, it's a time of cross-currents. Learning is a process that never ends. Remember: all organisations are imperfect. They are laboratories of change.

Q: How do you smell a learning organisation from a distance? How does it pass the Peter Senge test?

A: You know it when you get a sense of enthusiasm. I visited an automobile company in China recently and found quiet energy on the shopfloor. It looked like a life-force: relaxed, focused, not frantic. Have you seen martial artistes practising? There's no wasted energy: there's more outcome from less energy. I saw that kind of energy in the Chinese factory. The people there were eager to learn even after having achieved a lot. They had that one question on their minds: Could you tell us how we can be better?

You discover a spirit of learning in great organisations. People are very excited but they are humble enough to learn. It's so very different from other organisations. Six Sigma, for instance, is a hype created by consultants. Learners don't promote themselves. That's why I don't give examples of companies that have become learners. Now tell me: Can you find a perfect individual? I think it applies to companies too.

Q: Does leadership have to be collective? Doesn't the single leader model work well too? Haven't we seen that in the case of Jack Welch's GE?

A: It's not so, in my opinion. I don't think the single-leader model works. And, at GE, it wasn't Jack Welch alone. Of course, he was a good CEO. But he was always surrounded by talented managers. Often, collective leadership is a hard story to write. So, when you talk of Welch, you must also talk of GE's culture which created its top managers. Welch was certainly one of them.

Q Should learning organisations also have different vision-horizons of say, 10, 20, 30, years?

A: Yes, organisations should have layered vision horizons: 6-month, 5-year, 10-year and 50-year visions. We call them progression of visions. These visions are crucial to the evolution of the company as a learning, and progressive, organisation.

take the drucker test

2005-11-19T03:33:00.000-08:00

vinay kamat

If management writing can be simple and clear, why make it complex and intimidating? And, if solutions are obvious, why do writers brand themselves as gurus? You’ll get the answers if you read Peter Ferdinand Drucker, the man who created his muse.

Although he invented the discipline of management, Druckersphere is shorn of hype, fad, mantra, buzz, paranoia, wow. It is a place to unravel yourself; know how to manage your time; realize the value of learning; and understand why results are important. Filled with powerful characters like GM’s Alfred Sloan and AT&T’s Theodore Vail, Drucker’s prose is as understated as Tom Peters’ forewards. When you finish Drucker, you are quietly bewitched by the clarity and linearity of his plot.

Drucker, who died on November 11, could well have passed off as a travel writer. With his acute observations and fascinating anecdotes, he rediscovered the organization for the reader. He peopled it with knowledge workers—resources in quest of superior results. In doing so, he exalted work; it was always something to be contributed, not executed.

In his 1966 book, The Effective Executive, Drucker said his would be the first word. If you read the book, you’ll realize that it’s the last word. Indeed, it’s the most convincing word in management literature. Read it before you read The Concept of the Corporation (the 1946 work based on GM) and The Practice of Management (the 1954 publication focused on tomorrow’s managers). The Effective Executive is the quintessential Drucker because it’s not just an idea; it’s a how-to manual and self-motivation tool as well.

Drucker’s anecdotal touch is the glue that holds the text. One anecdote tells how a President focused on deliverables, not weaknesses. “Lincoln, when told that General Grant, his new commander-in-chief, was fond of the bottle, said: ’If I knew his brand, I’d send a barrel or so of it to some other generals.’” In Grant, Lincoln saw what he wanted: a winner, not a guzzler.

“The first rule in decision-making is that one does not make a decision unless there is a disagreement,” explains Drucker. He elevates this rule with an anecdote from GM. “Alfred Sloan is reported to have said at a meeting of one of his top committees: ‘Gentlemen, I take it we are all in complete agreement on the decision here…Then, I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.’”

In The Practice of Management, Drucker quotes Jonathan Swift to describe the essence of management: “Whoever makes two blades of grass grow where only one grew before deserves better of mankind than any speculative philosopher or metaphysical system builder.”

Drucker grew two blades of grass too by contributing to the growth of the new corporation. It was an effort worth applauding. For, it also created a benchmark for ideating and writing.

unbrand yourself

2005-11-14T02:55:00.000-08:00

vinay kamat

Try this one. How about getting yourself a brand manager? If companies have them, why can’t people? If the idea still sounds far-fetched, it’s because we think we can easily manage ourselves. So, we try to shore up strengths that we think are right. Well, they may be the wrong ones.
Simple idea. Too tough to implement. It’s been around though in many avatars. Maverick management guru, Tom Peters, popularised the concept of Brand You and Me Inc. What he said was attention-grabbing. Since then, converts have marketed themselves in their organisations by showcasing — or showcausing — their pluses. They have stopped being human resources. Instead, they have become human brands. They have realised that peer perception is as important as individual excellence.
The idea of self-branding was given a new spin by a CXO (a chief something, or everything, officer) I met last week, who has used it to climb up, and across, hierarchical ladders. His formula may sound like journalist Naomi Klein’s argument against an over-branded world; it’s actually a product extension of Jack Welch’s famous rule: Control your destiny or someone else will.
The CXO’s tried and tested mantra: Unbrand You. As you’ll see, it’s a deeper look at yourself.
Debrand yourself: “Companies get locked into the brands they create; individuals should not. Sony can never make cars, for instance. But you and I can change our careers if we want to. And, in an era where careers are shortening, how can you create Brand You around one career? You need to be as flexible as possible in positioning yourself just as you need to diversify your skill-set.”
Think community: “The future of pharma is generics; the future of technology is open source. Why can’t the future of careers be communities? As work increasingly gets outsourced, the individual’s ability to fit into virtual teams will be the biggest plus. A community chain, unlike a value chain, is based on personal relationships. Here, your ability to communicate laterally, not vertically, creates a feeling of oneness.”
Get yourself a brand manager: “If you can have your own financial planner and medical counsellor, why can’t you have your own brand manager. It’s not to create a brand but to help you not to create one. The best place to find a brand manager is your organisation. Your colleague could be the best choice: he would know where your shoe screeches or why your ring-tone affects sensibilities. By conducting a daily performance appraisal, he can tell you why you are making zero-impact in the corner room. He can even give you an indication of your internal and external market values, map your next career move, and conduct informal peer surveys to gauge your popularity. And if you still want to tag yourself, he would position you as a Walmart rather than a Prada. For, accessibility, not attitude, is the key to Unbrand You.”
“An eye is a new way of viewing something old,” says fashion designer Vera Wang, in Newsweek. Perhaps the CXO’s eye is an attempt to view careers in a new way. It’s an attempt to present oneself without using PowerPoint. It’s a nice way to be different.

mega mantra

2005-11-05T03:07:00.000-08:00

vinay kamat

Name the mother of all management mantras. Name the mantra that companies and individuals can’t do without. Name the slogan that has the highest recall. Name the chant that's a wellness recipe as well.

It's called Positioning and it was introduced by Al Ries and Jack Trout in 1972. Until then, nobody had even thought of structuring the idea of positioning. What they said was pretty obvious: "To succeed in our over-communicated society, a company must create a position in the prospect's mind, a position that takes into consideration not only a company's own strengths and weaknesses, but those of its competitors as well."

Since then, Nike has positioned itself as the "just do it" brand, Apple as the "think different" company, Volvo as the purveyor of "safety." The idea of positioning was further simplified by Jack Trout in his book Differentiate or Die. “Being different,” says Trout, “often requires going against conventional thinking. You have to have the guts to go against what is often conventional wisdom.”

Needless to say, positioning is the world’s most powerful survival, or revival, mantra. It’s your lifebuoy-cum-booster. Positioning could be an ideological statement like Coca-Cola’s (the classic image) or Pepsi’s (the new-generation persona). It could be a cultural manifestation like Toyota’s (operational excellence) and Sony’s (innovation). It could be the assertion of identity like BMW’s (driver’s car) and Merc’s (top-class engineering). It could even be a connect with legacy like Cadillac’s (standard of the world) or VW’s (think small).

Positioning is the company’s belief in itself, its competencies, its people, and its vision. Some have called it shop-floor spiritualism; others have fondly referred to it as the wellness recipe. For, employees can motivate themselves only if they are encouraged to position themselves within the company so that the company can, in turn, position itself in the marketplace. An organization that articulates its positioning well to its employees has no stereotypes; it buzzes with individuals.

Michael Porter’s strategic fit (configuring your value chain to reflect strengths and strategic trade-offs) and C.K. Prahalad’s and Gary Hamel’s core competence (your basic strength that gives a competitive edge) are all manifestations of positioning.

Positioning is an attitude that is hard to miss. It becomes a war-cry when you are sure of yourself. China’s online guru-cum-entrepreneur Jack Ma is definitely sure of his. “Ebay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose--but if we fight in the river, we win," he told Forbes magazine.

Jack Ma’s stance is not just strategic intent. It is a positioning statement for a local firm that is preparing for battle with a transnational. It defines the game, the domain, the players’ strengths and weaknesses, and the game-plan.

Indeed, it’s not just positioning. It’s an awakening. That is the power of positioning yourself in you adversary’s mind.

how would techies describe a dog?

2005-10-28T23:04:00.000-07:00

vinay kamat

The Cluetrain Manifesto? What's that? Those were the questions that geeks would ask when the book first hit them in 2000. Short of asking the netizen in you to rebel, it said everything. Perhaps it should have had an elaborate sub-title: Converse, You Lose Nothing But Your Chains. The book became a cult very much like Po Bronson's paean to Silicon Valley entrepreneurship, Nudist On The Late Shift.

The Manifesto came alive last week, in The Economist, when David Sifry, founder of the blog search-engine Technorati, acknowledged he was inspired by the controversial work. But what the hell is The Cluetrain Manifesto? Here's blogger Andrew Savory's take on the geek bible:

- it's made up of two words, "clue" and "train"- "clue" is something you give to users "hitting them with a cluestick, hitting them with a clue-by-4".
- train is obviously something for transporting people, but also a general idea of "moving things along".
So, I think the general idea of cluetrain is that it's something that everyone should hop on to really_get_ the idea of the manifesto.

According to the frequently updated Wikepedia, the book and its website (www.cluetrain.com) both challenge outmoded, 20th-century, thinking about business, listing 95 theses as a reference to Martin Luther's manifesto which heralded the start of the Protestant movement. To understand what maverick authors Rick Levine, Christopher Locke, Doc Searls, and David Weinberger have to say, let's look at their core thesis:

"Markets are conversations. Their members communicate in a language that is natural, open, honest, direct, funny, and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably genuine. It can't be faked. Most corporations, on the other hand, only know how to talk in the soothing, humorless monotone of the mission statement, marketing brochure, and your-call-is-important-to-us busy signal. Same old tone, same old lies. No wonder networked markets have no respect for companies unable or unwilling to speak as they do."

Simple and heretical. After all, organizations need structures to create, perform, and improve. Size and complexity feed on processes. Conversations can't scale up organizations. But if markets began, and continue, as conversations, why can't organizations be chats, discussions, or even blogs? Why can't informality redefine formality? Why can't we converse strategy instead of formulating it?

Why can't we all jump on a cluetrain and have a jolly good ride? To cluetrain your thoughts, think of Abraham Lincoln's Gettysburg address as a PowerPoint presentation. Google's Peter Norvig already has a six-slide ppt at www.norvig.com. It's delightful because it's structured. But it may not provoke you because it's not emotive.

Well, six years after The Manifesto first appeared on the web, it's still a refreshing read. It's not the internet's very own manual, nor is it the guiding principle of the blogosphere. It is a handbook of ideas, starting with you.

Perhaps the best posting in the book is its advice to companies to first understand themselves: "Every business is dysfunctional because everything human is at least a bit broken. It's not an accident. It's the human condition."

So, conversation is surely continuous improvement. That is one view among the many threaded opinions you'll find on the web.

If anything, The Manifesto is amusing, intelligent, provocative. It's not afraid to take a dig at its own community. Here's an extremely sticky example: "A veterinarian using TechnoLatin might say that a dog serves as a platform for sniffing, is an open environment for fleas, and that it supports barking." Can you you think of any line with a better bite?

mavericks of tomorrow

2005-10-27T06:02:00.000-07:00

Two contrarians. Two counter-intuitive thinkers.

One, truly a colossus in the arena of management.

The other, a Quentin Tarantino of economics, who senses the extraordinary in the ordinary. Indeed, the duo - Sumantra Ghoshal and Steven Levitt - are dream-catchers, filtering conventional wisdom and showing us a new way to dream.

Ghoshal is a must-possess for every manager wanting to be different. In Sumantra Ghoshal On Management: A Force For Good, editors Julian Birkinshaw and Gita Piramal have brought out a 378-page book that distills the work of a man that many regard as an inflection point in management literature.

His books, Managing Across Borders and The Individualized Corporation, have become management classics. The first, co-authored by Christopher Bartlett, argues for a transnational strategy that seamlessly combines size, speed of response in local markets, and ability to disseminate knowledge across the globocorp. The second, also co-authored by Bartlett, puts the individual at the epicentre of the organisation, even arguing that the organisation must be built around him.

Birkinshaw’s and Piramal’s tribute gives a composite picture of management’s finest story-teller, the metaphors he formulated, the ideology he happily subscribed to, and the multiple disciplines he crisscrossed to give management a humane touch.

When Ghoshal passed away in March, 2004, the apostle of empowerment still hadn’t completed his preaching. But his rule-breaking ideas, or conversations, published with co-authors still challenge management paradigms. Interestingly, Ghoshal even changed the writing construct: he preferred a partner for writing books, believing that two can always distill the essence of a conversation better than one.

The other pick, Freakonomics, which has just come out as a paperback, is like an iPod: radical, refreshing, with zero fog-index. The book focuses on a young economist, Steven Levitt, and his weird, but absolutely convincing, ideas about day-to-day issues.

Like Ghoshal, Levitt is a keen observer and has an infectious mind. Even as he sees an elderly homeless man with torn clothes begging, the curious Levitt doesn’t fail to notice the beggar’s headphones in his car’s rear-view mirror.

Like Ghoshal, Levitt marries curiousity, data, and lateral rethinking to produce absolute stunners. Here are some of the questions that Levitt answers: Why do drug-dealers still stick with their moms if they make piles of money? Why do blacks jeopardise their kids’ careers by giving them certain names?

How corrupt is sumo wrestling? And, of course, how does a beggar sport $50 headphones?

If you have been wowed by The Tipping Point, Blink, and The Wisdom of Crowds, then don’t miss Freakonomics. Written by journalist Stephen J. Dubner and economist Levitt, the book has no unifying theme but a common thread of surprise in its dazzling discoveries about mundane things that never amazed us. So, next time you see a beggar or a sumo wrestler, start thinking. And reading Levitt.

who says msft can't dance?

2005-10-27T05:58:00.000-07:00

vinay kamat

Microsoft is a peculiar giant. It dominates the desktop, your dashboard to the digital world, with its software prowess, pricing skill, distribution reach, and branding muscle. But that does not scare away innovative challengers.

Yet, when Microsoft celebrated its 30th birthday on Friday, it was a landmark. For, resilience and learning have been its best defences against competitors as insanely great as Apple, Netscape, and Google.

To defend Microsoft is to defend the status quo. That is what Microsoft’s PC-centric world has become. As futurologist George Gilder said in 2000, “the PC revolution has stiffened into an establishment”. It is an establishment that has become synonymous with Windows, Microsoft’s cash-cow. When nimble newcomers were rolling out products using the web as a platform, Microsoft was busy shielding its turf: the desktop.

Yet what looks like a turf fight is actually a strategy. If competitors carve out niches, Microsoft creates a software supermarket. Put simply, Microsoft layers its core Windows with innovations ranging from browser to spreadsheet to search. None of these is strictly an innovation but when they are bundled onto Windows, they create a new experience. Today, Microsoft’s software powers more than 90 per cent of the world’s PCs.

Bill Gates, who reinvents Microsoft every time it falls behind in the web race, may never be credited for creating a truly great company. Perceived variously as a software monopoly, an “evil empire”, a start-up gobbler, a geek foe, Gates’ Microsoft is a loner. Yet what differentiates Gates from other great leaders is his frozen resolve: it is a quest to create a learning entity.

To imitate is to learn. In the disruptive world of technology, only those that decipher the competition survive. Indeed, Microsoft has been able to create a culture which helps the corporation to quickly morph itself into a project the moment a rival product emerges on its radar screen. See how Microsoft has kept pace with Sony’s PlayStation with its Xbox gaming console. In both gaming and search, Gates is still behind. But few believe he will remain a pygmy when Microsoft turns 32.

Despite its strengths, the $40-billion Microsoft has quite a few things to fret about. Its stock, at $25.3, is uninspiring; its product flow is drying; it is still not intuitive enough in spotting web-driven killer apps. Free and flexible Linux software now threatens the flagship — Windows. Unlikely competitors are emerging in the world of convergence, where gadgets and formats will have to shake hands. We are already seeing tomorrow’s living rooms through Nintendo’s GameCube, Sony’s PlayStation, and Microsoft’s Xbox. The future, as Gates points out, is an “ecosystem of technologies.” Will Microsoft create that ecosystem or will it be just a part of that network?

Along with Apple, Sony, Nokia, Samsung, Google, and Yahoo, Microsoft is faced with an unfamiliar future. Technologies are converging but nobody knows for sure what the dominant technology, or the overall user architecture, will be like.

As Lou Gerstner, the CEO who taught IBM to dance, puts it: “It isn’t a question of whether elephants can prevail over ants. It is a question of whether a particular elephant can dance.” Microsoft can be that particular elephant if it cranks up its product pipeline. That’s one way to leverage size, breadth and depth when you are 30. With an R&D budget of $6.8 billion and cash reserves of $40 billion, Microsoft has the firepower to define the future.

In fact, Microsoft’s success is embedded in its own strategic code: just be ahead of the herd. It sounds convincing, if not disruptive. It is herd logic, not instinct. But that’s one way to tread into unknown terrain.

oceans of strategy

2005-10-27T05:55:00.000-07:00

Vinay Kamat

After Tom Peters, who? That was the FAQ a few years ago. Today, after the popularity of Tipping Point, that is perhaps the least asked question. For, author Malcolm Gladwell may have just become management’s feisty intellectual, its pop diva. The simplicity of his writing, and his uncanny ability to relate management ideas to you and me, explains why Tipping Point has become as significant as Tom Peters’ In Search Of Excellence and Al Ries’s and Jack Trout’s Positioning.

Still a hip best-seller, Tipping Point explains why certain ideas click and why others don’t. On his website, www.gladwell.com, the author explains the idea behind the book: “It’s the name given to that moment in an epidemic when a virus reaches critical mass. It’s the boiling point. It’s the moment on the graph when the line starts to shoot straight upwards.”

And when and why does this happen? Perhaps the best example in the book is about Hush Puppies. The brand was dying until a few kids in downtown Manhattan started sporting them because nobody would. Soon, a fashion celeb wore them too, creating a buzz. It did not take long for the shoes to debut on Manhattan catwalks, triggering an epidemic and creating a global brand out of Hush Puppies. All this happened in two years, and the manufacturer, Wolverine, had absolutely nothing to do with it. What the kids had created was a word-of-mouth effect.
How did it all start? It all began with a good product that hadn’t reached the influence market. A few kids added attitude to their walk to be different, bringing their bold act under the gaze of the influence (fashion) market. And once the influencers got infected, a tipping point was crossed.

Despite his talking gigs around the world, Gladwell has hardly been on the Indian seminar circuit. And although his books are intellectual treats, they are not management gospels since they lack the academic vigour of Peter Drucker or the data-driven constructs of Michael Porter. Still, like Hush Puppies, Gladwell is an attitude that will continue to infect marketers when they are not sure what to do when they have a great product.

Blue Ocean Strategy, a new arrival, may just provide you with the impetus to reach a tipping point. Like Gary Hamel’s and CK Prahalad’s pet theory of strategic intent — the Honda-like obsession to gain global leadership — Blue Ocean is a desire to be different. Authors W Chan Kim and Renee Mauborgne do not steer away from strategic intent’s core premise: that “the strategist’s goal is not to find a niche within the existing industry space but to create new space that is uniquely suited to the company’s own strengths – space that is off the map”. They add easy-to-follow tactics to the very idea of outwitting competition.

The authors give an interesting example, Cirque du Soleil, which reinvented the circus by crisscrossing multiple business formats and upselling big-top entertainment. How did they do that? “Instead of following the conventional logic of ... creating a circus with even greater fun and thrills...it sought to offer people the fun and thrill of the circus and the intellectual sophistication and artistic richness of the theatre at the same time.” In essence, Le Cirque got out of a red ocean mindset and plunged into their very own blue ocean.

Another Blue Ocean navigator, Casella Wines, devised a wine for the entertainment economy. They turned wine into a fun product that was high on attitude and low on pedigree. “Instead of offering wine as wine, Casella created a social drink accessible to everyone: beer drinkers, cocktail drinkers, and other drinkers of non-wine beverages.”

Both Tipping Point and Blue Ocean are sister ideas. For, you need to create a tipping point in your organisation to lead your team into a blue ocean.

search for wow

2005-10-27T05:48:00.000-07:00

Vinay Kamat

To understand Google is to understand the future. Armed with just an algorithm, or computer code, Google not only dominates the web, it rules your life. But the six-year-old Google has become more than just a piece of code. Nowadays, you don't search Google for simple answers alone. You locate friends, compare prices, check maps and weather, see real places, email, blog, and talk. And you would soon start using Google toolbar as your desktop's ultimate console. Google is slowly becoming the surfer's dashboard, competing with Microsoft on its own cozy turf.
What will Google be up to tomorrow? Its ability to roll a slew of leading-edge products, revive internet advertising, create search benchmarks, reinvent e-mail through Gmail, enter telecom space through Google Talk, and simply thrill its customer base, has sent pundits and competitors wondering about Google's next big thing. After all, at $80 billion, it is the world's largest media company by market value.

No wonder when two media students Robin Sloan and Matt Thompson put together a Flash prognosis of the media's future, few questioned their imagination. The duo's prediction: "2008 sees the alliance that will challenge Microsoft's ambitions. Google and Amazon join forces to form Googlezon. Google supplies the Google Grid (a universal platform that provides a functionally limitless amount of storage space and bandwidth to store and share media of all kinds) and unparalleled search technology. Amazon supplies the social recommendation engine and its huge commercial infrastructure. Together, they use their detailed knowledge of every user's social network, demographics, consumption habits and interests to provide total customisation of content — and advertising."

Googlezon may be fantasy. But its basis lies in Google's marvellous search code, around which Google is building enough muscle — a set of linear offerings — to elbow out competition. The Google algorithm creates a class structure of the web when you search. It ranks pages based on links, their readership record, and the frequency of updates. And it throws up search results in less than half a second. Now, imagine Google dominating mobile space, allowing you to search and transact on the move.

Google believes it is not just an online library but a real-time database. Actually, it is an information superpower, with eight billion indexed pages and a billion images. And when you use Google search, a back-end supercomputing system is intelligently at work. Its search prowess allows Google to position itself as an ad aggregator, helping advertisers get relevant surfers/customers by a unique process of micro-targeting.

Google’s ability to process the world's information needs in nanoseconds is a test of its hardware and software skills. This dual strength is something that competitors like Microsoft are not comfortable about.

Argues Stephen E Arnold, author of The Google Legacy: "Google is, like IBM, a company that owes its existence to both hardware and software. Unlike IBM, Google has a business model that is advertiser supported. Technically, Google is conceptually closer to IBM (at one time a hardware and software company) than it is to Microsoft (primarily a software company) or Yahoo! (an integrator of multiple softwares)."

If Google becomes the first point of entry for surfers, it could set the standards for newer products just as it did for search. Predicts Patricia Seybold, author of customer.com: "Google will play a major role in digital rights management and in creating a de facto standard for pay-per-use information. It's also possible that Google will play an increasingly important role in consumer and business retail."

But what did Google do right to get where it has? Google is a cool brand built around simplicity and convenience. Its minimalist 37-word homepage hides the complexity of its back-end robots. Beneath this simplicity is the story of its founding. Like Hewlett-Packard, Google was bred in a garage by two computer science graduates from Stanford University, Larry Page and Sergei Brin. It thrilled its fans as a geek adventure before finally deciding to create a revenue model.
Often it is an innovative experience. When Google launched gmail in beta, it created a buzz by inviting people. Gmail was a robust product with 2 gigs of space, unheard of in those days. Gmail crossed the tipping point by word of mouth, fulfilling what Google believes in: focus on the user and all else will follow.

But has Google institutionalised Wow? After all, Wow is a spontaneous, unplanned way of delighting a customer that can hardly be industrialised. Marketing experts have long deliberated whether Wow can actually be systemised. For instance, can companies delight customers on a regular basis? Can products then be rolled out in Wow fashion consistently?

Indeed, Apple and Sony have created Wow technologies. Google may have taken the Wow factor away from technology to sheer user-experience and institutionalised it.
That is why Google appears a whole tera bigger than it is. That is why it looks so unpredictable.

schelling's game theory

2005-10-27T05:41:00.000-07:00

What is the ultimate objective of game theory? That was the question buzzing in our minds when the Nobel Academy awarded the prestigious prize for Economic Sciences to Robert J. Aumann and Thomas C. Schelling for their contribution to game theory. True, games help unravel the dynamics of conflict and cooperation. But, as Schelling explains in the following interview, investigation is one aspect of game theory. The other, more important, part is peaceful co-existence.

By Vinay Kamat & Sumit Chakraberty

Q:. Why do you think the Nobel Academy awarded you with the top honor? Is the ultimate objective of game theory peaceful co-existence?

A: They didn't really tell me, except that I'd contributed to the understanding of conflict and cooperation with the help of game theory. They haven't mentioned any specific works of mine, or specific ideas I'd contributed. I think it's more of a "lifetime achievement" award than an award for any specific contribution. The ultimate objective of game theory is to illuminate the nature of conflict and cooperation; the ultimate objectiveof some game theorists, like myself, is peaceful coexistence

Q: How do you relate to day-to-day life as a game theorist?Do you see day-to-day relationships, family interactions, through the prism of game theory? Is life also about game-theory situations?Has it made you a better father or husband?

A: Yes, I tend to see day-to-day relationships through the prism of game theory--not technical mathematical game theory but game theory's insight into strategic behavior. Game theory may have made me a more perceptive father or husband, whether a "better father or husband"you'd have to ask my wife and children…

Q: What would you consider as your most significant contribution to game theory?

A: I think my most significant contribution, not so much "to game theory" as to the kind of behavior alanalysis that game theory tries to illuminate, is the concept of "commitment". Commitment lies behind efforts to make credible promises, credible threats, credible offers and counter-offers in bargaining. Finding ways to commit is often difficult but crucially important. It is important to commit the nation never to launch a surprise attack, but how to do that requires careful analysis, appropriate technology, and an appreciation of its importance.

Q: How does a game theorist apply his knowledge and work to international conflicts? Do governments take their help often? In how many cases has the US Government sought the advice of game theorists?

A: I’ve often been asked for help and advice, but Ithink not because of game theory. Game theory helps me think about important issues in international security, butI never phrase my advice in terms of game theory and I'm not sure that the people who seek or heed my advice think of me as a game theorist.

Q: How would game theory apply to some current international situations?

A: People who are game theorists, or who know a little game theory, who spent time during the Cold War trying to make deterrence work, might in years to come try to help a nation like Iran, if it should acquire some nuclear weapons, think about how to use its nuclear capability solely for self-defence via deterrence rather than in more mischievous or dangerous ways.

Q: Do you wish game theory were more popular than it is today, where its benefits percolate to larger sections of society? How can it be made more accessible and popular?

A: Game theory will always be restricted to people who do explicit formal analysis, mainly academics or specialists in business, law, or government. A lot of the results of game theory can be made usefully available to a much wider audience by game theorists who are good at translating their results into normal language.

metaphors of transformation

2005-10-27T05:37:00.000-07:00

by vinay kamat

Objects have a strange way of telling stories. They can be metaphors for actions and objectives; they can even be reflections of real issues. Film director Ang Lee is said to have come up with a box of metaphors to create a film. During the making of Hulk, he gave his animators four objects to deliver what he wanted. The four keys to the animation puzzle: driftwood, sand, wet rock, and rake. Together, they represented a persona called Hulk: strong, sentimental, adaptive, bottled up, wounded, uncared, a split personality. Lee was on the dot with the odd items he had collated to help create a complex personality. His symbols helped bring the comic superhero alive: a human being caught between frailty and superpower.

What if CEOs asked their COOs, or strategists, to create an organisation they really desired? And what would be the ideal objects they would give these designers? At a meeting, four friends—all aspiring to be Ang Lees—came up with ideas to create blockbuster organizations. Separately, the ideas are at odds with one another. Together, they represent a new way of scripting success.

First friend: “ICE should be one of the objects. Ice explains the difference between curiosity and detachment. Ice is a metaphor for innovation. You can’t afford to be clinical and detached in the workplace; you must get curioser and curioser. Gabriel Garcia Marquez describes the joy the villagers of Macondo experience when a gypsy introduces them to ice, in his book One Hundred Years Of Solitude. Ice was the spirit of discovery and imagination in the colonial village. It made Macondo so very different.”

Second friend: “There’s nothing better than DUSTER. Always start with a clean slate. If you want to change something, first rub your organisation clean. You can’t change what exists. Here’s what Tom Peters has to say on learning: ‘Organisational learning is one of the hottest management topics of the 1990s (some say even beyond). But I say forgetting is far more important. Cybernetics pioneer Gregory Bateson said it best: You can’t leave without an eraser. Gentlemen and women…are you erasers ready? They better be.’”

Third friend: “Personally, I prefer MUD. It is nothing but waste. If you think mud, you think ahead. It’s an individual initiative: Keep your desk clean, keep your shop-floor clean. Contract the obsessive compulsive disorder of cleanliness if you want to change your organisation. Inventory management doesn’t start in warehouses; it starts and ends in your inbox. Have you finished all your tasks today? Is your personal inventory piling? Get the mud off your conscience, gentlemen.”

Fourth friend: “Since I am not into metaphors, I’ll suggest a simple, easily attainable, object. It’s called Execution, and it’s written by Larry Bossidy and Ram Charan. I quote a small passage from the book: “Much has been written about Jack Welch’s style of management—especially his toughness and bluntness, which some people call ruthlessness. We would argue that the core of his management legacy is that he forced realism into all of GE’s management processes, making it a model of an execution culture.”

Whichever way you look at them, ice, duster, mud, and execution are essential to the process of differentiation. After all, three metaphors and a meta tool are all it takes to create an Ang Lee in the organization, whose lean, simple, ideation can create a grand metaphor for execution. It can hulk up the company you work for.

the most misused word

2005-10-27T05:33:00.000-07:00

by Vinay Kamat

Perhaps the most misused word today is proactive. It’s all around you: your boss may ask you pen a proactive letter to a customer; your wife may ask you to be proactive with your neighbour; and you may decide that thinking out of box is proactive.

Was Carly Fiorina, HP’s former CEO, proactive because she was aggressive? Does podcasting sum up teenage proactivity? Are hedge funds proactive investors?

Nothing in business literature has been so commoditised, so victimized, as proactive. It’s a trait that bosses would pay top dollar for; it’s a value that colleagues expect in a leader; and it’s something that you would readily trade off for a hefty increment. It’s not easy to be proactive. You can be active, reactive, but proactive? What’s that?

Well, if you want an idea of proactivity, you should read the fascinating story of a small company that made its customers happy in a mega crisis. The company: Mississipi Power, whose power lines were demolished by Katrina. Yet, reports USA Today, the company relit people’s homes in flat 12 days, showing its crisis-management skills, lateral thinking, and good practices. “One crew chief (even) stripped a generator of an ice machine to get a substation working.” But what drove the team was a true inspiration: Stephen Covey’s The 7 Habits of Highly Effective People and his “be proactive” mantra.

The first habit of highly effective people, writes Covey, is being proactive. In his 1989 book, which is still a best-seller, Covey explains the feeling from every angle: emotional, rational, and strategic. It’s perhaps the most elaborate definition of a word that we frequently use without understanding it.

“Reactive people are often affected by their physical environment,” says Covey. “If the weather is good, they feel good. If it isn’t, it affects their attitude and their performance. Proactive people can carry their own weather with them. Whether it rains or shines makes no difference to them.”

People often mistake proactivity with being aggressive, or filling the vacuum. Some call it vacuum management: If you spot a void in the organization, you simply rush to fill it, thereby creating a space for yourself. In Covey’s book, proactivity is a responsible action that must be wedded to values: “Many people wait for something to happen or someone to take care of them. But people who end up with the good jobs are the proactive ones who are solutions to problems, not problems themselves, who seize the initiative to do whatever is necessary, consistent with correct principles, to get the job done.”

Proactivity is the sincerest form of humility. For, it will spur a boss to accommodate divergent views, exercise subtle controls, and learn from mistakes. Here’s Covey’s tip for bosses: “The proactive approach to a mistake is to acknowledge it instantly, correct and learn from it. This literally turns a failure into a success. Success, said IBM founder T J Watson, is on the far side of failure.”

If only companies were run on proactivity, rather than by Six Sigma, TQM, EVA, or Reengineering, the organization would be a fun place. After all, great organizations are run on principles, not results. They are peopled with responsibilities, not deliverables. That’s what proactivity is all about.

A marketer that changed the world

2005-10-27T05:29:00.001-07:00

by vinay kamat

How Dell is Dell? Not a particularly simple question to answer. Yet, if you look at the computer major, and its highly-charged CEO, you will realise why leadership makes Dell different.

For, Dell is focused on cost, culture, and the customer. Ultimately, it all boils down to cost. Or the art of doing things simply, quickly, and effectively.

At Dell, leadership is cost management. Everything that Dell excels in has to do with cost. If a corporation comprises three parts--the supply chain, the demand chain, and the innovation chain--Dell leads in the first two. It ensures it has minimal inventory in its supply system even as it provides customers made-to-order products at high speed. By avoiding middlemen in its Direct-from-Dell model, the company develops intimacy with its customers.

An MIT study called Toyota the machine that changed the world because of its emphasis on continually declining costs, zero defects, zero inventories, and endless product variety. Dell, whose focus is as sharp, could easily be called the marketer that changed the world. What Dell did was to differentiate itself from other computer-makers by interacting directly with customers. As Michael Dell, the founder, put it: "While other compnies had to guess which products their customers wanted, because they built them in advance of taking the order, we knew--because our customers told us before we built the product."

This super-efficient demand chain, which has made Dell the biggest computer-maker, is now testing its future. The big questions: Can Dell roll out technologies at the same pace as Samsung? Can it create iconic products like Apple's iPod? Does it have Microsft's R&D muscle? Is Dell slipping behind like Sony? Should it have diversified into printers, hand-helds, and television sets at all? Is Dell now realising that a process innovator must be a product innovator as well?

Dell's problem lies in the industry it operates in: computers. Here prices are falling and margins are shrinking. And, in areas that Dell is diversifying into, the contest is severe. Even high-end computing, an area that Dell is now interested in, will not be easy to capture for a commodity-maker. For, Dell has been criticised for being just a piece-by-piece assembler and a savvy marketer with a tight supply chain, nothing more. In the world of hi-tech, you can either be an Apple, which rolls out iconic products, or a Samsung, which make huge bets on future technologies; you can't just be a just-in-time, made-to-order, seller. Can you?

Strangely, technology, the fuel for relentless product innovation, could power Dell still. For, tomorrow's customers would desire made-to-order gizmos in a world of hi-tech clutter. Convenience, customisation, and personalisation would be the key criteria for product success. This requires savvy marketers like Dell to spot the right technologies and rewire their supply-and-demand chains accordingly. Innovative products, which are actually assemblies of different types of components and technologies, can fail if their supply chains are suspect. So, vendors must meet demanding quality norms, tight supply schedules, and work to high customer expectations. Dell has flattened the learning curve in each area through its Direct-from-Dell model.

Behind every innovative technology lies a highly sophisticated supply chain. Even a small glitch can prove costly. Which is why Apple, which has encountered vendor-quality problems in its iPod Nano, is busy recalling defective music-players. The future of technology is about betting on dominant technologies and managing vendors with flexible supply chains. It is a future that Dell should be at home in.

But it's not the supply chain alone that makes Dell a highly clinical machine. It's also the values that Michael Dell, the founder, has hardcoded into the company. Business Week gave a glimpse of his style when Dell was faced with dissonance within the organisation:

Dell faced his top 20 managers and offered a frank self-critique, acknowledging that he is hugely shy and that it sometimes made him seem aloof and unapproachable. He vowed to forge tighter bonds with his team. Some in the room were shocked. They knew personality tests given to key execs had repeatedly shown Dell to be an "off-the-charts introvert," and such an admission from him had to have been painful.

In his insightful autobiography, Direct from Dell, the founder says the biggest threat to his company wouldn't come from a competitor. "It would come from our people...my goal has always been to make sure that everyone at Dell feels they are part of something great--something special--perhaps even something greater than themselves." This belief is vital for a company that can take pride only in its operational excellence, not in its tech or design skills.

Dell's autobiography details the creation of a virtual company and the people that helped nurture the Dell magic. It's plain objective was "to steer customers through the storm of technological options."

A bigger storm is coming. It is a world where virtual companies like Dell will have to learn to customise newer and newer technologies for its buyers. In other words, they will have to create the ultimate convergence offering by customising it. Can Dell do it? Yes, if it broadens and segments its customer base quickly to learn more from it. Which is why Dell's diversification may not be a bad thing after all.

james bonding

2005-10-27T05:29:00.000-07:00

by vinay kamat

How out of box are you? Would you tolerate 007s in your organisation? Maverick management gurus keep raising these questions in their quest for an organisation which thrives on non-conformity. But what would it take to have a licensed demolition-man or an unlicensed innovator in your midst? Yes, what would it take to create a Bond who rejuvenates the company every time he breaks a rule?

One management guru says Bonds are born, not made. Another says the problem is CEO-related. A CEO has to wear two thinking caps, that of M (Bond's boss) and Q (the gadget-maker in Bond movies). M is an unusual boss: he doesn't compete with Bond to show who's boss; he allows him his flamboyance while laying down the big, broad, rules; and he backs him to the hilt. Q is the magician who regales Bond with gadgetry although he is always upset with Bond's demolition spree. In a way, Q is Bond's biggest challenge: his innovations represent the future that Bond must constantly unravel.

Both M and Q are essential to creating a climate where Bonds can be bred, nourished, tempted, and challenged. A colleague reminds me that one of the best examples of the M-Bond combo was the PV Narasimha Rao-Manmohan Singh duo. A non-competing boss, Rao managed the administration, allowing Singh to launch the process of liberalisation. And, like M, Rao was able to create a hero by shielding him from the politics of the day and empowering him to fight the licence-raj. Rao even allowed Singh to be a Q as well.

How tolerant are organisations of mavericks? In The Living Company, a view of the company as a living being, author Arie De Geus gives a taste of tolerance. "Long-lived companies...generally avoided exercising any centralised control over attempts to diversify the company. Later, when I considered our research again, I realised that seventeenth-, eighteenth- and nineteenth-century managers would never have used the word decentralised; it was a twentieth-century invention. In what terms, then, would they have thought about their own company policies? As I studied histories, I kept returning to the idea of 'tolerance'. These companies were particularly tolerant of activities in the margin; outliers, experiments and eccentricities within the boundaries of the cohesive firm, which kept stretching their understanding of possibilities."

But the notion of tolerance has only gone so far as the creation of strait-jacketed Bonds or structured eccentricity. While organisations are not very comfortable with the idea of having Bonds loose within, they are open to the idea of innovation-teams working far away from the main organisation. One such team was the skunk works, a term still used by organisations when they work on secret, market-redefining, projects. According to Wikipedia, skunk works is the unofficial name for Lockheed Martin's Lockheed Advanced Development Projects Unit and was the production unit responsible for a number of famous aircraft, including the U-2, the SR-71, and the F-117.

Samsung has its own skunk works in its VIP House, or Value Innovation Program. Fortune's writer, Peter Lewis, descibes a recent VIP drill at the Korean consumer-electronics major: "These days team members are allowed to go home to sleep if they want to, although Samsung executives acknowledge--with obvious pride--that the building is occupied 24 hours a day, seven days a week."

In Leading the Revolution, Gary Hamel showcases the mavericks that changed their MI6es. "Inside IBM and out, (John) Patrick and (David) Grossman are today recognised for their pivotal contribution to IBM's e-business metamorphosis...These two unlikely heroes--a software nerd and a corporate staffer--along with a pro-change CEO, helped give IBM the chance to do something it hadn't for a couple of decades: lead from the front."

The story of Sony's James Bond is even more exciting. "Lacking any formal mandate, (Ken) Kutargi launched a bandit project that eventually led to the establishment of the Sony Computer Entertainment division in 1993 and the introduction of the PlayStation video game console the following year."

But do Bonds arrive on the scene at the time of crises or can they be hired, trained, and then let loose? Perhaps the answer lies with the boss himself. Jim Collins defines the Level 5 leader as one who "blends extreme personal humility with intense professional will". Such leaders can help to create a maverick counter-culture. For, only humility allows a boss to lead without actually leading. While a CEO's intense professional will, like M's, defines Bond's broad focus, it gives Bond enough room to re-invigorate the organisation by attacking its stress-points: fossilised bureaucracy and age-old beliefs. Interestingly, both define current strategy.

The biggest problem, of course, is not about creating a nursery for baby Bonds. In fact, the real problem lies in the self-transformation of the CEO. After all, you need to be a Dr Yes to create a change-agent. And, yes, you can't have a JB unless you have an M and a Q too.