july 2014
HIRING FOR YOUR OVERSEAS OFFICE
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FROM SARKAAR TO START UP
The Magazine for Growing Companies
Are you a compulsive micromanager? Take our quiz Page 09
From
Sarkaar to Start Up! Why Vivek Kulkarni, Sanjay Purohit & Sabahat Azim left the HALLOWED iAS to become entrepreneurs Page 18
The magazine for growing companies
Convinced of the great business opportunities available, Vivek Kulkarni left the IAS after his stint as the IT Secretary of Karnataka
july 2014 | `150 | Volume 05 | Issue 06 A 9.9 Media Publication | inc.com Facebook.com/Inc
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How Paper Boat has spun childhood tales into a great brand story Page 29
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contents
Third Innings He truly has “been there, done that”—first, as an IAS officer in Rajasthan, then a corporate strategist in the US to now running iProf, the e-learning solutions company he founded.
16 Innovation
A thumb ring that controls television, smart phone and car radio, all at once, using the movement of your thumb by sonal khetarpal
18 The Unlikely Journey of IAS Officers Turned Entrepreneurs
40 The Way I Work
Beas Dev Ralhan, co-founder & CEO, Next Education India has an unusual morning routine—he dives straight into work and email to make sure that by 9am his teams know what they need to do.
Vivek Kulkarni, Syed Sabahat Azim and Sanjay Purohit are a rare breed of entrepreneurs. They bring with them an immersive experience as bureaucrats in the government. It has given them a refreshingly different take on business.
as told to sonal khetarpal
photograph by subhojit paul
by preeti singh
This edition of Inc. magazine is published under licence from Mansueto Ventures LLC, New York, New York. Editorial items appearing on pages 9, 12-13, 34-39 were all originally published in the United States edition of Inc. magazine and are the copyright property of Mansueto Ventures, LLC, which reserves all rights. Copyright © 2009 and 2010 Mansueto Ventures, LLC. The following are trademarks of Mansueto Ventures, LLC: Inc., Inc. 500.
on the cover
Vivek Kulkarni, founder, Brickwork India Cover design by Haridas Balan. Photograph by Paulaumi.
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contents
July 2014
29 16
14 38
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05 Editor’s Letter
07 Launch
Six big internet predictions for 2025 Are you a micromanager? Take this quiz and find out now! How India ranks on grooming women entrepreneurs A guide to the fine art of asking. Plus: The Jargonator swats business buzzwords. How cutting-edge neuroscience research is impacting leadership
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44 Founders Forum
Rajesh Krishnan, founder, Brick Eagle, a land banking firm, on why right now is the best time to do business in India.
Strategy 29 branding How Paper Boat has built a brand using the good, old (and clever!) virtue of storytelling.
34 HIRIng Improve your global positioning by learning how to hire overseas. 36 planning Not only are you ready for strategic planning, you need it. 38 managing The source of the magic at Pixar, one of the world’s most creative companies, is simple. It lies in straight talk.
inc.com
Contents
MANAGING DIRECTOR: Dr Pramath Raj Sinha Printer & Publisher: Anuradha Das Mathur
Inc.com/lead
Three Things Leadership is Not
Inc.com columnist Les McKeown reveals what all true leaders need to know. His new book, Do Lead, which is excerpted on Inc. com, can help you spot the leaders in your midst.
Editorial managing Editor: shreyasi singh assistant editor: Sonal Khetarpal DEsign Sr. Creative Director: Jayan K Narayanan Sr. Art Director: Anil VK Associate Art Director: Anil T Sr. Visualisers: Shigil Narayanan & Sristi Maurya Visualiser: NV Baiju Sr. Designers: Haridas Balan, Manoj Kumar VP Charu Dwivedi, Peterson PJ & Dinesh Devgan Designers: Pradeep G Nair & Vikas Sharma ONLINE & MARCOM DESIGN Associate Art Director: Shokeen Saifi Sr.Designer: Rahul Babu Web Designer: Om Prakash PHOTOGRAPHY Chief Photographer: Subhojit Paul Sr. Photographer: Jiten Gandhi Community Team SENioR Manager: Astha Nagrath Khanna Associate: Akarshan Sapra Sales & Marketing Vice president: NC Singh (+91 9901300772) National Manager (Print & Online) Rajesh Kandari (+91 98111 40424) National Manager (Special Projects) Arjun Sawhney (+91 95822 20507) Senior Manager (Business Development) Anshu Kumar (+91 95914 55661) Manager (Business Development) Sukhvinder Singh (+91 8802689684) Production & Logistics Sr. General manager (Operations): Shivshankar M Hiremath Manager Operations: Rakesh upadhyay Assistant Manager (Logistics): Vijay Menon Executive Logistics: Nilesh Shiravadekar Production Executive: Vilas Mhatre Logistics MP Singh, Mohd. Ansari OFFICE ADDRESS nine dot nine mediaworx Pvt Ltd A-262, Defence Colony, New Delhi–110 024
1. Leadership isn’t about charisma
Charisma can be a great tool for a leader to wield—but it’s not a prerequisite. Nor is it necessary to be a wonderful communicator or motivator.
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2. Leadership isn’t about genius
There are very many exceptionally clever people who could never be thought of as effective leaders— most likely your old college professors included.
3. Leadership isn’t about position
Leadership has almost nothing to do with an org chart. Many people who never rise to a position of prominence in an organisation consistently act as leaders.
Published, Printed and Owned by Nine Dot Nine Mediaworx Private Limited. Published and printed on their behalf by Anuradha Das Mathur. Published at A-262, Defence Colony, New Delhi–110 024. printed at Tara Art Printers Pvt ltd. A-46-47, Sector-5, NOIDA (U.P.) 201301 Editor: Anuradha Das Mathur
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editor’s letter
Of unlikely journeys and childhood memories By no means is the Indian bureaucracy an obvious place to sharpen one’s entrepreneurial skills. Global reports often rank our government machinery business-unfriendly and nearly impossible to navigate. On risk taking, personal ambition, and the pace of adaptation, the world of the sarkaar with its huge access to power and resources and the lonely, resource-craving environment of the start up are stark in their difference. That is what makes our cover feature on three IAS officers turned entrepreneurs— Vivek Kulkarni, Sabahat Azim and Sanjay Purohit—such an unusual read. Choosing to leave an office that provides as many job perks and social privileges as the IAS would undoubtedly have been a monumental decision. But then self-belief and appetite for risk are classic entrepreneurial traits. Interestingly, Preeti Singh, who filed this story for us, and who has extensively reported on the bureaucracy for many years, says, “Actually, it makes great sense that a former bureaucrat is running a company. The IAS is an India 101 course, and there is nothing more powerful for a business owner than knowing your market like these people do.” Take Vivek Kulkarni, for example. As IT Secretary of Karnataka during the years when Bangalore first began to be known as India’s Silicon Valley, Kulkarni helped many IT majors set up base here. The opportunities for growth and the entrepreneurial zeal he spotted tempted him to resign from the service and set up Brickwork India, a KPO, in 2004. Sabahat Azim, an ambitious, young officer in the Tripura cadre, spearheaded a massive e-governance initiative before
leaving the bureaucracy; his Glocal Healthcare, a chain of low-cost hospitals perfectly combines his government experience and understanding of rural India. Sanjay Purohit who runs iProf, an e-learning solutions company, is unique even within this trio with experience across the bureaucracy, big corporate and entrepreneurship. After leaving the IAS, he spent several years in business reconstruction and strategy with firms such as Motorola and Dan Rivers in the United States before founding iProf. Don’t miss their stories on page 18. We’ve also got them to give us from-the-trenches tips on how companies can better work with the government. Do also take time out for our feature on Paper Boat, the beverage brand, which has given a new life to traditional drinks such as aam ras and jaljeera. Their clever brand story, based on evocative childhood memories of summer holidays and ancestral homes, is a great case study of a product launch. It might also prompt a nostalgic trip down memory lane that we hope leaves you with a smile. Happy reading!
Shreyasi Singh shreyasi.singh@9dot9.in
JUly 2014 | INC. | 5
News, Ideas & Trends in Brief
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Big Internet Predictions Mirror, Mirror, What’s My Future? Experts says wearables will revolutionise the internet by 2025 Pew Internet Project, a nonpartisan American think tank, along with Elon University’s Imagining the Internet Center published a report Digital Life in 2025 on the future of the internet. This report is an analysis of opinions about the likely expansion of the Internet of Things, a catchall phrase for all kinds of devices, appliances and wearable material. Around 1,600 experts of internet were asked an open ended question about the widespread effect of Internet of Things on the everyday lives of people by 2025. About 83
per cent of the 1,600 industry experts surveyed agree that there will be widespread growth of Internet of Things which will have beneficial effects. Another major point of consent among the experts was that there will be amplified connectivity which will influence almost everything and everyone. Six major themes arise out of their responses: 1. Huge advancement in technology between now and 2025:
Experts believe infrastructure and
adoption of Internet of Things will substantially progress in the next ten years. More objects, appliances, cars and other parts of the environment will be connected to each other. It will have many clear advantages, and it will far outweigh the problems it has caused. Paul Saffo, managing director of Discern Analytics adds, “The biggest shift is a strong move away from a single do-everything device to multiple devices with overlapping functions and, above all, an interrelationship with our other devices.” july 2014 | INC. | 7
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2. Privacy is a big concern:
The Ubiquity of Internet Devices
Here is the list of places where experts believe Internet of Things to be present: Bodies: More and more people will wear devices that will monitor their activities, health and fitness. They will also use such devices to monitor others (children or employees for instance). Homes: People will be able to control their homes remotely. Homes will also have sensors that will warn about everything from prowlers to broken water pipes. Communities: Embedded devices and smartphone apps will enable more efficient transportation and give readouts on pollution levels. Goods and services: Factories and supply chains will have sensors and readers to track materials and smooth out the manufacturing process and distribution system. Environment: Real-time readings from fields, forests, oceans and cities about pollution levels, soil moisture, and resource extraction will allow for closer monitoring of problems.
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The concern of privacy was raised by many. Nick Wreden of the University of Technology Malaysia in Kuala Lumpur wrote that there will be no privacy, even in the jungle or anywhere away from civilisation. He adds, conversations, which includes not only words, but also movement, eye contact, hearing, memory and more, are such holistic experiences that people will not give up gadgets that connect them to internet easily. A few survey respondents also mentioned that it will become necessary to find ways for people to be able to disengage from the network, to stop being a node that constantly sends and receives data. 3. Information interfaces will advance, especially voice and touch commands. But few expect that brain-to-network connectivity will become common:
Per Ola Kristensson, lecturer in humancomputer interaction at the University of St. Andrews, UK, sees advancement in smallscreen communications. He predicts, writing on mobiles will be as fast as on a keyboard. And, wearable sensors and mobile eye tracking will be used by systems to learn about users’ context: where are they, what are they doing, and what are they communicating. There will be better sensors, more advanced machine learning algorithms, and a better understanding of human capability. Gesture and speech recognition would evolve so much that users will be able to express themselves quickly, even if they are mobile or encumbered. However, he adds, braincomputer interaction (BCI) will not be feasible for able-bodied users, most likely because efficient BCI will remain requiring invasive equipment to be installed. 4. The large internet network may break down too:
Jerry Michalski, founder of REX, a thinkand-do tank for leaders to navigate massive change wrote, the internet of things is complex and it will break over and over again. Also, the devices exposed on the internet will be vulnerable and prone to unintended consequences. They might
even do things that nobody designed them for, mostly undesirable. He adds that humans aren’t as evolved yet to create apps and services useful for humanity which he explains by giving the example of Google Glass. It attracted backlash even before it was being used by people. He concludes, this kind of surveillance makes the society oppressive, and not liberating. And, there isn’t a possibility of a comfortable truce between the advocates of privacy and the ‘screen everything’ crowd. 5. There will be a wide digital divide between the connected and the unconnected or those who don’t want to be connected:
K.G. Schneider, a university librarian, wrote, that these devices primarily signify a growing gulf between the tech haves and have-nots. That said, he adds that these devices are interesting and important. Students today feel burdened if they don’t have home internet. There will be an expectation that successful living as a human will require being equipped with pricey accoutrements. He expresses concern that with the widening digital divide, people left behind will become increasingly invisible and will be seen as less than full humans. 6. Internet of Things will redefine the relationships people have with each other and also with organisations:
Bryan Alexander, senior fellow at the National Institute for Technology in Liberal Education, presents a clear picture of how adoption of Internet of Things will evolve mostly because of its convenience. Wearable devices makes things easier for users which is a reason good enough to drive its rapid adoption. Companies will also benefit from Internet of Things to collect customer data, and for providing services. The last point he makes is how these devices will change the ways of socialising. Personal space will expand to cover the world, at the same time contract due to too much information. There will be new ways of interaction between public and private spaces, with writing on fridges and projection on cabinets, he says. —Sonal Khetarpal
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Are You Really A Micromanger? To find out for sure, take our quiz. That is, if you’re not too busy doing everyone’s job Gauge the accuracy of this statement: In my office, everyone knows his or her role and is committed to fulfilling it.
A) Roles are so 20th-century Fordist. We are fluid and flexible here. B) Some people know their role; others, I am not so sure sometimes. C) That’s the gospel truth! As a leader, I am most focused on:
A) Myself, because I tell everyone what to do. B) My underlings, because they need constant attention. C) The results I want to achieve; I do what it takes to achieve those results. When I go on vacation, I:
A) What vacation? I don’t think the place can run without me on-site. B) Take my phone and laptop and check my mail multiple times per day. C) Put a colleague in command and say “Only contact me in an emergency”.
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When I give a team member a job to do, I:
A) Give one chance for clarification, and if he or she doesn’t do it right, I take the job away and do it myself. B) Say, “Good Luck” and then check back to see how he or she is doing. C) Say, “Tell me what I just told you.” And discuss the
job thoroughly so that we understand each other. The last time I singled out an employee in public as the expert on something and put him/her in charge of a job was:
A) Why would I ever do that? B) I think last year, when I was about to go on a maternity/paternity leave. C) Just last week. I do it all the time. I trust my employees with my:
A) Lunch order. I have no food allergies. B) Dry Cleaning. Usually it works out. C) ATM card and security code. They are rock solid. Asking sincere questions of my employees is:
A) Too time consuming. B) Nice for office rapport, but rarely useful. C) A perfect way to convey respect, build trust, and get information.
Which statement most describes your relationship with your team members:
A) We nod to one another in the hallway occasionally. B) I know a little about their interests, and we talk casually by the water cooler. C) We go out for drinks every month or so, and I buy the first round. —Kirk Kardashian
HOW’D YOU DO? Give yourself 1 point for every A, 2 points for every B, and 3 points for every C.
8-12
YIKES! You’re about as micro as it gets. Just let go, pal.
13-20
MEH. Not perfect, but not horrible. You can do less. Work on building trust.
21-24
PHEW. Congratulations! You’re doing nothing and getting a lot done!
Behind The Manic Managers MODERN HISTORY. In 1960, micromanaging was called out in The Human Side of Enterprise, a management treatise by famed MIT Sloan professor Douglas McGregor. In it, he outlined two distinct leadership styles: the “Theory X” manager and the “Theory Y” manager. Theory X execs believed workers needed constant prodding to do their jobs, because humans are basically lazy and unmotivated. Theory Y was liberating for bosses who had no interest in the in-your-face school of management. It said workers were inherently selfdirected, so managers should focus on getting employees to commit to the organisation’s objectives. McGregor was all for Theory Y. WHAT MAKES THEM TICK. Micromanaging comes naturally, says J. Keith. Murnighan, a Northwestern University professor and author of Do Nothin! How to Stop Overmanaging and Become a Great Leader. Why? Hyperactivity. We evolved to be active beings, always hunting for food and avoiding predators. Thus, we have a hard time sitting back and directing others. IS MICROMANAGING REALLY BAD? It’s inefficient, but the problem is deeper. “People react badly to being micromanaged,” Murnighan explains. “If you want team members to be motivated, committed, and driven, looking over their shoulder all the time is not the way to get it.” Murnighan recommends that micromanagers try to let go of one small project at a time. july 2014 | INC. | 9
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The Gender Gap India ranks 26th out of 30 countries on a women’s entrepreneurship index
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Globally, women and men are not on a level playing field in terms of access to resources, which continues to impact women’s ability to start and grow businesses. The Gender GEDI focuses specifically on identifying and assessing the gendered nature of factors that, if addressed, could allow high potential female entrepreneurs an equal chance to flourish. The Gender GEDI Index results distill the most important issues for policy makers, governmental officials and other decision makers interested in improving the conditions for high potential female entrepreneurship development. Not surprisingly, the South Asia region which includes Bangladesh, India and Pakistan were all low performers in the index with India ranked highest at 26.
Though most score averages are low, one of the strengths in this region is the relatively higher score for the female Entrepreneurial Environment sub-index. In India, the report found that six out of 10 women have identified opportunities to start businesses. More than half (52 per cent) felt they have the skills to do so, with 57 per cent saying they do not fear failure in starting a business. Interestingly, when it comes to start-ups, there is moderate female start-up activity ratio of 5.2/10. The index pointed out one more strength of India—a relatively well developed equity capital markets.
Key issues that affect gender At first glance, the Gender-GEDI results may seem directly linked to a country’s
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The Global Entrepreneurship Development Institute with support from Dell Women’s Entrepreneur Network recently releases its second edition of the The Gender Global Entrepreneurship and Development Index (GEDI), a 30-country analysis of the conditions that foster highpotential female entrepreneurship. Built upon the same theoretical framework as the 2013 Gender-GEDI—measuring entrepreneurial environment, ecosystem and individual aspirations, and scoring nations on a scale ranging from 0 to 100—this year uncovers the following key findings: The United States (with a score of 83), Australia (80) and Sweden (73) are the top ranking countries in the 2014 Gender-GEDI. They are followed by France and Germany (tied at 67), Chile (55), the United Kingdom (54) and Poland (51) which all received an overall score of 50 or more. Twenty-two countries received an overall Gender-GEDI score of less than 50 out of 100, indicating that many of the fundamental conditions for high potential female entrepreneurship development are generally lacking in the majority of countries. “While there are bright spots and room for optimism, the overall picture points to an urgent need for change. The world cannot prosper without the economic participation of women. It is our fervent hope that this research will help to inspire and guide action that will lead to a brighter future for women entrepreneurs everywhere,” says Charlotte Deal, director of Dell’s Women’s Initiatives.
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Women entrepreneurship in India is crippled by discouraging statistics on many indicators
6% 14% 18% 27% of growth oriented female startups
economic development and GDP levels. However, a number of countries do not fit this pattern. For example the United States (#1), Chile (#6), and Nigeria (#23) have relatively higher scores on the Gender-GEDI in relation to their per capita GDP while the United Kingdom (#7), Turkey (#18) and Pakistan (#30) have a relatively lower Gender-GEDI score with relation to their level of per capita GDP.
of women in leadership positions
of women with access to a bank account
Though GDP plays a role in creating favourable conditions for female entrepreneurship development, other issues also have an impact. Specifically, results show that the conditions for high potential female entrepreneurship development are hampered in the following ways for 30 country sample: 73 per cent countries exhibit female labour crowding; 73 per cent countries limit legal rights for married women; 27 per cent
of females with secondary education
countries limit women’s access to property; 23 per cent countries restrict women’s access to public spaces and in 23 per cent of countries at least half of the female population is unbanked. In addition, regardless of GDP levels, the Gender-GEDI Index results indicate low levels of high growth oriented female startups and female tech sector startups throughout the 30 countries in sample. —Shreyasi Singh
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The Jargonator Swatting the buzzwords of business By Ben Schott
THICK DATA /. Noun phrase. From the people who sold you big data now comes thick data, which [drumroll] “captures not just facts but the context of facts.” Ah, yes, context. What a revolutionary idea. Good Thinking, Poindexter.
OMNI-CHANNEL BANKING /. Noun phrase. “Delivering a consistent and seamless [banking] experience across various touch points” –a.k.a confirming you’re broke on a variety of technologies you can ill afford.
Source: wired.com
Source: thefinancialbrand.com
It’s All in How You Ask It’s surprising how often you can get what you want, but need the right approach
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Always be asking Ideally, startup entrepreneurs should make asks everyday. “Every time you meet a stranger or someone you think could be a part of your venture in any way, make an ask,” says Sarasvathy. Don’t be too strategic Open asks aren’t restricted to a single question and yes or no response. Instead, they allow people to become involved with the startup in multiple ways. “The person you approach thinking they are a
customer could become your salesperson,” says Sarasvathy. “The person you think is going to be an investor could be your supplier.” Be open to anything In an open ask, “You are talking to people, but you are also listening to the kinds of things they want to do with your idea, your skills, and your resources,” says Sarasvathy. “If you allow the other person to think with you, they develop emotional ownership in your business, which is good for you both.”
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Jenny Fulton, co-founder of Miss Jenny’s Pickles in Kernersville, North Carolina, is not timid. In 2012, after giving a presentation at a marketing event sponsored by designer Tory Burch, who often appears on Good Morning America, Fulton asked Burch from the stage to put her pickles on GMA. Burch agreed. “Afterward,” Fulton recalls, “she came over to me and said, ‘Do you know why I said yes to you? Because you asked.’” All entrepreneurs understand how to pitch: Identify someone with something you want and sell yourself—hard. But there’s an alternative approach: Just ask. Saras Sarasvathy, a professor at the University of Virginia’s Darden School of Business, says people with expertise or resources are often happy to help startups. But entrepreneurs too often approach them with yes or no questions, or propose narrow transactions. When people don’t fall into obvious buckets (investor, customer), some entrepreneurs don’t approach them at all. After interviewing hundreds of entrepreneurs, Sarasvathy has identified four types of “asks.” The first is straightforward: “I need this. Will you help me?” The second is the quid pro quo: “Please do this for me and I will do this for you.” In the third, which Sarasvathy calls the “dither,” the entrepreneur flails around and never actually requests anything. The ne plus ultra of asking is the “open ask.” Open asks begin as exploratory conversations and often culminate with the question: “What would it take for this to happen?” The entrepreneur, interested in a long, fruitful relationship, is open to all possibilities—especially those suggested by the person to whom she is talking. Securing what she needs at that moment is desirable, but not the priority. Sarasvathy offers the following advice for aspiring ask-masters:
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INSTA-PITY /. Noun. The shame of picking the wrong filter when posting on Instagram. What is the correct filter to express the smugness of selling a revenue-neutral company for $1 billion?
DIGITAL MESH /. Noun phrase. Car service Uber is developing a digital mesh- exploiting its brand and technology to offer its customers much more than mere transportation. Expect “surge pricing” on hot dogs on the Fourth of July.
CUSTOMER SUCCESS /. Noun phrase. “Customer success is about more than delivering service or support. It’s about having real-time visibility into the issues customers are facing and finding smarter ways to manage those issues.” Your call is important to us; please continue to hold.
Source: elle.com
Source: washingtonpost.com
Source: labs.openviewpartners.com
Getting to the Right Question
Are you asking the right questions? May be not I spend about a third of my time working
Ask for what is easily afforded Tyro entrepreneurs often start by asking for something that costs little: most commonly, advice. Seasoned entrepreneurs are generally happy to give it, so long as the question is specific (“How would you sell this?”) and not inane (“What is the secret of your success?”). One of Sarasvathy’s students once asked for someone’s frequent-flier miles, which he figured the
successful businessman in question could easily live without. The student got the miles—and the businessman is now sitting on the young man’s board. Don’t be afraid to be bold Sometimes, you have to make big asks. In 2009, Bryan Mehr needed to buy out a partner to save his startup digital-printing company, m2 Displays in Fullerton, California. Desperate, he asked a vendor for
help. “I didn’t pitch,” recalls Mehr. “I told them, ‘I know on the books it doesn’t look great. But I see the future.’ And I asked if they wanted to be part of it.” In exchange for 49 per cent of the company, the vendor paid off all the old debt and gave Mehr “way more than the company was worth,” he says. “It was almost a miracle. If you ask, people really open up to you.” — By Leigh Buchanan
with entrepreneurs who come to me for advice. I tell them I’ll help on one condition: They have to listen to what I have to say and think about it, whether they like it or not. Then they have to make their own decisions and take responsibility for them. That way, if a decision turns out to be wrong, they’ll have the opportunity to learn from it. If they blame the failure on me or anyone else, they’ll only learn not to ask for advice, which is a terrible lesson. Assuming they agree to my terms, we start talking. They generally have a specific question they want answered. It’s almost always the wrong question, and I don’t bother answering it. Instead, I ask them my own questions. How old are they? What’s their family situation? What do they want and why? When did they start the business? How do they make sales? Who are their competitors? And on and on. I’ll listen carefully until I feel I have a good understanding of both the people and their problem. Usually, that problem is something they haven’t thought of. For example, one fellow came to me for advice on how to expand his business to 10 times its current size in five years. As we talked, it became clear that he really wanted to know how he could spend more time with his family and afford a bigger house. Or consider the travel agents at a company in Boston who wanted to spin off their office as a separate business and were worried about getting sued. It turned out that the only thing stopping them was their (baseless) fear of moving to a new location a mile away. I’m glad to say they all eventually got what they wanted—because they found the right question and listened to the answer. —By Norm Brodsky july 2014 | INC. | 13
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How Neuro Literate Are You? New discoveries in brain science are changing workplaces and leadership styles T D Chandrashekhar works in the areas of leadership development, strategic planning and creative thinking, and runs these programmes for companies such as IndiGo and Jindal Steel. His last corporate role was as head of Ameriprise India, which he set up for the parent organisation and scaled it up successfully. He is especially interested in the area of decision making and innovative thinking, and is working to make Indian companies aware of the benefits of having Neuroleaders— managers who imbue their working style to be aligned to the latest discoveries in neuroscience. Inc. India recently spoke to him at a talk he gave to founders of midsized companies in Chennai. Which recent discovery in the subject, do you believe, most upturns established models of leadership as we have known?
There are several recent discoveries in the subject which can greatly influence how we
work, and manage people. Neuroplasticity is one of the big things—can we become mentally more agile than we are. Research has shown that we can, and that there are practical things we can all do to enable that? These are exciting findings which hopefully will turn into more accessible tools for all of us very soon. New research is also asserting the benefits of a “less frenetic” and “always on” mode of working. Neuroscientists stress that focussed attention or meditation (at least 10 minutes a day), 15 to 20 minutes of aerobic physical exercise, and six to eight hour of sleep are essential ingredients for keeping our brains humming well. These discoveries have significant impact on understanding creativity and innovation better. What tips would you give CEOs who want to make their teams better, more creative thinkers?
According to me, companies should work to institutionalise the following five ideas to foster high creativity:
Allow experimentation and failure: our brain learns through active trial and error Allow varied stimuli and learning styles in people: all of us respond in different ways Provide physical space for quiet time and sleep, especially for those working long hours (+10 hours /day) When doing creative activities, ensure external stimuli are minimised: have
T D Chandrashekhar introduces us to the brilliant neuroscientists who are unraveling how our brain works. If you want to be neuro-literate, follow the research and writings of these pioneers. 14 | INC. |
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Eric R. Kandel Dr Kandel is the university professor and Fred Kavli Professor and director of the Kavli Institute for Brain Science at the Columbia University College of Physicians and Surgeons. A legend in the field of neuroscience, especially in the area of how our brains learn, Kandel was recognised with the Nobel Prize in Physiology or Medicine in 2000.
Robert M. Sapolsky Sapolsky is a neuroendocrinologist, and professor of biology, neuroscience, and neurosurgery at Stanford University. He has done seminal work on how our brain and body cope with stress. He’s also a recipient of the famous MacArthur “Genius Grant”.
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Brain Gurus
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A clutch of companies are crafting their people, innovation and leadership strategies by taking into account cutting-edge research coming out of the top brain labs of the world. Please tell us about some of them.
meetings without cell phones, TV sets and operational emergencies to be discussed. Preferably, do this away from regular work zones. Encourage an atmosphere of candour and lack of fear. Let people be unafraid to suggest “stupid” ideas. All breakthrough ideas emerge in an individual’s mind. The group helps by encouraging and massaging and making it better.
Google launched an in-house programme called Search Inside Yourself which has been created in collaboration with neuroscience department at Stanford. The programme, the company claims, is designed to help their employees find greater “mindfulness” and emotional intelligence. New York-based Pymetrics applies neuroscience and big data to “revolutionise” career assessment and recruiting. They’ve replaced standard questionnaires and interview techniques with games grounded in two decades of neuroscientific research to help recruiters make hiring decisions. Ray Dalio, founder of Bridgewater, one of the most successful hedge funds, evangelises the power of meditation which is now proven to make positive structural changes in the brain (stronger and more synaptic linkages get created). An ardent advocate of meditation, Dalio has used his experience to try and understand the psychological factors that influence market decisions and company management. —Shreyasi Singh
A Reading Mind
Become neuro literate with this “brainy” list of mustread books
The Tell-Tale Brain: A Neuroscientist’s Quest for What Makes Us Human, by V S Ramachandran
In Search of Memory: by Eric Kandel
Who’s In Charge: by Michael Gazzaniga
Stanislas Dehaene Dehaene is a professor at the Collège de France, author, and (since 1989) director of Cognitive Neuroimaging. He has worked on a number of topics, including numerical cognition, and the neural correlates of consciousness. Earlier this year, he was awarded the Brain Prize, awarded to scientists who have made an outstanding contribution to European neuroscience.
Pawan Sinha Sinha won the Presidential Early Career Award for Scientists and Engineers in 2012. He is a professor of Vision and Computational Neuroscience at Massachusetts Institute of Technology, and his work spans experimental and computational approaches to studying human visual cognition.
Consciousness and the Brain: Deciphering How the Brain Codes Our Thoughts: by Stanislas Dehaene july 2014 | INC. | 15
innovation
Companies on the Cutting Edge
A digital thumb
Through his engineering degree at Coimbatore’s Kathir College, Rohil Dev N was passionate about tinkering around with and developing smartphone apps. Gesture-based apps, in particular, fascinated him greatly. In his third year, Dev developed Ferne Player, a BlackBerry app to control the devices’ music player with expansive hand gestures. To get user feedback, he asked some of his friends to test the app out. Their verdict was it wasn’t convenient to use, mainly because they felt odd making such gestures in public places. Dev figured he had to look for more instinctive ways of human-machine interaction. He found inspiration at hand. His habit—of touching his fingers with his thumb as if he was perpetually counting something—got him started on the idea of making a device that could digitalise the movement of the thumb. Along with his three friends, Dev set to work to develop the idea. By September 2013, they had a prototype of a ringshaped device they called Fin. One has to simply slip the ring on your thumb, and that enables the wearer to give commands for different tasks. For instance, a thumb swipe is used to attend a call or a double tap on the little finger can put phone on silent. Fin’s inbuilt Bluetooth transmits the command to the device (television, smart phone, car radio) it has been linked to. Dev plans to launch Fin for sale by September 2014 at a price of $120.
Name game The name Fin represents wings for technology, just as the fins of fish help them to swim effortlessly in water. Also, the name is cool, simple and futuristic.
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Wheel of funds They launched a two-month campaign in January 2014 at the crowdfunding site Indiegogo to turn Fin into a reality. They raised $2,00,000 and also got 400 distribution and 40 investment offers.
Recognitions: Top 15 Start-ups, CES 2014 TechCrunch, Las Vegas Top 50 Start-up, Pioneers Festival 2013, Vienna Second runners up, Microsoft BizSpark Challenge 2013, India
Fin
RHLvision Technologies
“This wearable “This is a gadget dummy pq. turns your palm into a is a real pq is tk. This interface and enables dummy pq, real pq is touch-less interaction with tk tk tk tk.” multiple smart devices.” —This is a pq attribute
—Rohil Dev N, founder, RHLvision Technologies
Lead tk vero dio dolestrud tat. Peros nissed magnit lore minisi.Rem zzriurem zzrit vero core magnibh exero dolorpero od magnibh eliscin ismodoloreet la consendre modo diamconum eugiam nonsendigna feu feum in henis nim ipisi.
photograph courtesy subject
reported by Sonal Khetarpal
IAS Officer
Entrepreneur
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The unlikely Journey of IAS officers turned entrepreneurs
Gutter Credit here
Sarkaari naukri doesn’t seem like an incubator for gutsy entrepreneurship. The three company builders we profile debunk that theory though. The former bureaucrats-turned-successful entrepreneurs show how invaluable their government stint has been in moulding their business models, crafting their products, pricing their services and understanding the market. Read ahead to find out how they cracked their winning formula en route a publicprivate journey like no other. By Preeti Singh Design by Anil VK
thinkstockphotos.in
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When three former IAS officers—separated by state cadres and decades—tell you that they sharpened their mantras of honesty, integrity, teamwork and speedy decision-making while in public service, raised eyebrows as a result of an Indian’s ingrained cynicism might well be forgiven. Add to this their shared conviction that the private sector is where it’s at; little trumps sarkaari training; shortcuts don’t work; and frugality without skimming on quality is the best bet and you’ll get a winning idea of their own lack of pessimism. Spread over three decades, their individual entrepreneurial journeys mirror India’s big booms in the corresponding era—IT, BPOs, telecom, education, health care. Vivek Kulkarni. Sanjay Purohit. Dr. Syed Sabahat Azim. A tech-savvy finance buff who studied engineering, an engineer-turned-reconstruction specialist and a specialist doctor who, quite simply, got bored with medicine—these three delightfully non-babu-like ex-bureaucrats are honest enough in their mild criticism of a system they were a part of but equally staunch in their defence of its exceptionality. Quick to attribute their entrepreneurial breakthroughs to experiences as spokes in the wheel of the Great Indian State, all three left the Indian Administrative Service (IAS) prematurely, albeit non-grudgingly, brimming with optimism to do something different. 2 0 | INC. |
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IAS officers turned entrepreneurs
Vivek Kulkarni
Brickwork
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As an IT Secretary, it was Vivek Kulkarni who helped usher in the IT boom in Bangalore. Wanting to be a part of that success, he left a rewarding career in public service to start Brickwork in 2004.
Photograph by Paulami Devvarman
ivek Kulkarni was the proud harbinger of the IT boom to Bangalore as the dynamic IT & Biotechnology Secretary to the Government of Karnataka. He chose to leave the accolades behind to join the private sector as an entrepreneur and founded Brickwork in 2004. Brickwork, named because it provides foundational virtual executive assistant services to busy corporations, has since then had clients in more than 88 countries. During Kulkarni’s term as the IT & BT Secretary, one global IT or biotech firm was setting up shop in the state, per week. Trying to keep up with all those breakfast meetings that his new foreign customers preferred nearly gave him diabetes, he says. An engineer for whom finance has always held a special fascination, leaving the government wasn’t really on the cards till, working with leading IT companies, he observed people doing well and thought he must also try his hand at the action! Brickwork was born when he sold his stake in his maiden entrepreneurial venture B2K Corp—a technical support centre formed out of the acquisition of a division of Talisma, a large CRM company funded by Oak Ventures. Bored with repetition, and realising that the diverse bunch of people he had hired in the US were being more than ably supported by the boys and girls back home, he turned this very support into a winning business idea. Brickwork now employs over 200 people and has annual revenues of `38-crore. From maintaining and updating personal databases and doing basic internet research, Brickwork’s universe now stretches to market research and business plans, covering both the US and foreign securities for hedge Continued on page 22 JUly 2014 | INC. | 2 1
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India 101
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BAs, medical and engineering degrees apart, it is the incrementally valuable process of selection into the IAS, the two-year gruelling induction, training and experience of seeing the way India ticks on the inside, that has given each of them an edge. Working in the trenches of India’s administrative underbelly, has not only helped them look for gaps to fill, they say, but also navigate the traps that an economy of its size and variety throws up. It definitely helps, they agree, to cut your teeth at the crossroads of India’s small towns and an emerging economy’s big opportunities. “The job of an IAS officer is fantastic and the experience invaluable”, says Kulkarni, “there are hundreds (even thousands) of different officials working under you; and without ever really having to work on the shop floor, there is no other position where a 23-year-old can go and sit in a CEO’s room.” Azim feels the same. “Where else would you get so much responsibility at such an early age”, he says. “Even on your very first posting you are already governing almost one-third of a district, and are often tasked with the welfare of lakhs in your late-20s”, adds Purohit. It’s a mantle you can’t wear lightly. This is why, when he quit the service, he decided he wanted to use his unique experience as an administrator in a sector that could help transform India’s social landscape instead of selling soup, soap or toothpaste. He chose telecommunications and used his understanding of India to help early movers like Motorola navigate it. Telecom, in turn, powered his first entrepreneurial venture—a BPO—and is the transformative force behind iProf ’s mission to reach into the heart of India on an accessible device. Except for Kulkarni, both Purohit and Azim quit after less than a decade of service, but all three agree that the first few years in the IAS are invaluable, when you work really hard and where most of the learning takes place. It is also the time you 2 2 | INC. |
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funds and investment banks, to due diligence and procurement services for companies interested in doing business with India. Brickwork may have been born out of curiosity, but its expansion into Brickwork Ratings—which takes up most of Kulkarni’s time now—is the offspring of his enduring love affair with finance—a subject he has taught at IIM Bangalore and Boston University. With an expanding footprint in 60 Indian cities and offices in eight of them— including the first in the northeast in Guwahati—Brickwork Ratings was incorporated in 2007 as India’s fifth RBI-accredited credit rating agency. Licensed by SEBI, it has rated 4,000 customers in the last year alone. “We also help Inc. with its annual Inc. 500/5000 list of the fastest-growing private companies in the US every year!” His wife Sangeeta now leads Brickwork India as CEO and— Kulkarni is proud to add—has grown the business to include Fortune 500 companies to its list of customers. For now, he seems content to teach at the Indian Institute of Science (IISc) in Bangalore, and groom banking and financial analysts at the Brickwork Finance Academy while nurturing Brickwork Ratings.
get to disconnect from classroom theory and deconstruct socio-economic realities at the grassroots, in small districts that don’t even merit a speck on the map. It is an enviable India 101 no B-school can match—a heady and handy mix for anyone looking to crack a complex market. “Government guys, selected through India’s most gruelling competitive exam, are just looking for a free environment to work, and are capable of producing not just high quality work but miracles if given the opportunity,” feels Purohit. Administrators learn to manage the often contradictory expectations of multiple stakeholders, right at the start, while working to reconcile these with budgets and resources. Azim believes in three simple questions before starting any entrepreneurial exercise. 1) What’s the demand? 2) Are people willing to pay higher than the product cost? 3) How long is the demand for your product going to last? To this he added one more for Glocal: Can you charge people only for what needs to be done, when it comes to health care? A lot of this was an uphill climb, he admits, given that health data in India can be dodgy and no solution has been statistically proven to have worked. Besides, Indians spend a mere fraction on health care than their counter-
parts in the US and Europe, even as they lead the world on the number of CT scans, MRIs and pharmacies per 1,000 population. It’s imperative then to be ruthlessly efficient when coveting a share of a pie that’s impossibly small to begin with. Patience, bidding goodbye to shortterm thinking, localisation, and innovating for India are key components of Purohit’s winning formula in a country that is a graveyard for cut-and-paste ideas. He cites Pizza Hut’s paneer toppings and McDonald’s veggie patties as examples. Complete usability will determine a product’s shelf life, he adds, citing iProf ’s emphasis on deep and patient engagement with schools to facilitate end use. While Azim had opted for laptops at SREI Sahaj e-Village to leave desktops and power cuts behind, Purohit’s iProf keeps plugged into Indian realities by being just as good offline in a country with low broadband penetration and where most students are offline 90 per cent of the time. To cater to India’s unbanked millions, Azim’s e-Village relied on an internal payment gateway, where all partners got their revenue paid up front. “In March 2010, we were doing cash transactions of `77-crore per month without a single penny being lost”. That’s when he was floored by rural
Syed Sabahat Azim
Glocal
Common Service Centres (CSCs)—set up at an average of 16 centres a day in his three years as CEO. When it was time to move on in 2009, Azim confesses—citing the Judgement of Solomon—he wanted to do something that would not pitch him against his own creation, despite the strong temptation to duplicate its success. A personal tragedy resulting from the over-priced but faulty mismanagement of a family member’s health ultimately nudged him closer to the health care industry. If this could happen to a doctor and an IAS officer who could afford to pay, he thought, then what of the rest? With seed-stage investment from Elevar Equity and Sequoia Capital, and a host of team members who left his first A doctor from Aligarh venture with him, Azim quit the services Muslim University and an IIM in 2009—a year before his sabbatical Ahmedabad alumnus, Azim ended—and founded Glocal Healthcare says he is a rural India guy Services in 2010. It offers affordable and who is easily bored to death, quality health care through an inteand is constantly looking for grated model of block-level comprethe next challenge. hensive care hospitals, health insurance, skill development and technology. Having raised `58-crore in investments, latest annual revenues of `11.3-crore, and with over 500 people working for Glocal, turning his back on that restraining staircase has sure served him well. A doctor from Aligarh Muslim University and an IIM Ahmedabad alumnus—Azim says he is a rural India guy who is easily bored to death, and is constantly looking for the next challenge. Serving as perhaps the youngest secretary to the CM in just half a decade of service, with direct access to the top offices, had made it difficult for him to go back to a regular posting, he admits. Also, he had realised, “if you are an honest officer, hen Sabahat Azim decided to take a five-year sabthere’s not much left to you at the end of the day”. Glocal is batical from his hard-won spot in the IAS, his first poised to add 50 new hospitals in six states providing secondarystop was an interview with a solar power major. His level, quality rural health care at low prices. Other projects on the enthusiastic quest ended abruptly at a staircase sign in the move include a diagnostic tool for doctors; soon-to-be-launched company’s offices that said “Please take one step at a time”. patient monitors; and a freshly-minted one-year management Instead, he founded SREI Sahaj e-Village in 2006—a successprogramme with IIM Calcutta to train hospital administrators who ful pan-India PPP venture aimed at traversing the digital barhave the unenviable task of managing doctors. rier. Partnering with the government to bring e-governance to India’s villages, the company he led helped create rural entrepreneurs who provided a multitude of services via 18,000
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Photograph by Subhojit Paul
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India’s remarkable capacity to embrace and “absorb” technology, critical for social transformation in the digital age.
Profiting from bottom of the pyramid
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With the economic liberalisation of 1991, Purohit realised the futility of socialism as a delivery mechanism for India’s growth and decided to join the private sector in 1995.
Gutter Credit here
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hat Azim puzzled over during his IAS career was why a state that was remarkably free of corruption, with good administrators, running water and electricity—all made possible by a large budget for a small population—continued to look like a shanty town. The answer, he says, is that a good government is bad for people. Doling out welfare and freebies to citizens simply does not work, as no one values it, which leads to a state being stuck at the lowest echelons of the development ladder. The State can’t be your livelihood. Industries need to come up to meet the demand and charge the right price for amenities, he feels. Just as a seemingly perfect state would collapse if government funds are withdrawn, there is no substitute for creating value if you wish to make money—the very lifeblood of a business. Glocal’s first hospital at Sonamukhi in West Bengal was built on a theoretical model that distilled 90 per cent of India’s disease load into 42 conditions. After devising a protocol for treating and managing these, the result was a 30-bed hospital that simply didn’t work! People may like free things but they don’t trust them is the turnaround lesson that the “phenomenal” failure of his first hospital taught Azim. People simply did not trust something that was priced so low—borne by the fact that a `150 consultancy fee worked better than `50! Also, opinion of others in the trade matters in the health care business. Apart from patients’ mistrust of low prices, the new hospital threatened the existing ecosystem, prompting much rumour mongering in the small town about its doctors’ efficacy. “People don’t go to a hospital because it is good; they go when someone tells them it’s good, which they never will if they themselves are
IAS officers turned entrepreneurs
Sanjay Purohit
iProf
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anjay Purohit joined the IAS in the late 80s just as a “confused” India as he calls it was entering a dark socio-economic phase, soon caught between the Mandal agitation, a ballooning deficit and petrol rationing. With the economic liberalisation of 1991, he quickly realised the futility of socialism as a delivery mechanism for India’s growth, where the government had no business being in business. Suddenly the IAS was no longer the only place to make a difference. After taking a study leave in 1993 and subsequently graduating from IIM-A, he joined the private sector in 1995. Multiple roles within the telecom boom beckoned, and were followed by a long spell in the US helping businesses in trouble. A self-confessed “reconstruction specialist”, Purohit served as a CEO for businesses as diverse as manufacturing, BPOs and textiles. He facilitated the turnaround of the $600-million textiles firm Dan River—now taught as a case study at the University of North Carolina. Finally, this smalltown boy from Rajasthan realised there were others like him back home who could benefit from a betContinued on page 26 Photograph by Subhojit Paul
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threatened,” he says. Glocal’s hospitals are still priced low, but by moving into secondary-level care, not easily available in small towns, they avoid threatening the livelihoods of primary care providers. Azim also realised the location was all wrong—patients found it easier to travel to neighbouring towns than to Sonamukhi. It has since found its feet, and the other seven hospitals that followed broke even within months and were turning profits in under a year. Glocal aims to make health care less capital intensive with modular scalable architecture that allows faster and frugal hospital build and a strong IT backbone for cheaper health care delivery. Purohit stresses on creating lasting value, saying that frugality is the key to survival and every penny matters if you wish to tap into and benefit from the bottom of the pyramid. There is a very thin line between viable profit margins and failure in a highly price-sensitive market like India, where a 10-cent ice cream cone brings in more footfalls than anything else. Nowhere else has McDonald’s priced anything as low, with the Mercedes A-class and Hyundai Santro being other cases in point.
Magic mantras for success
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rmed with his experience of working in 31 different countries, Purohit admits that India’s bureaucratic process is probably the worst. Not so the bureaucracy, all three insist. “There are more great people in government than there are outside,” feels Azim, “but being honest is not enough; you must also be competent.” Bribing ensures that you meet only the bad ones, he adds. When Purohit imported the first set of devices for iProf, customs officials mistook them for video players. Against shortcut advice from friends to just hire an agent who will get the job done, he chose instead to take his appeal higher to the customs commissioner to create a new category of imports. Cutting corners in a business you are in for the long haul will prove detrimental, he warns.
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ter education delivery mechanism. Out of this churning was born iProf—a company that employs 185 people with annual revenues of `150-crore. Steve Jobs’s unveiling of the touchscreen iPhone in 2007 was the Eureka moment for his new venture. Struggling to find the best way to transform education delivery in India’s schools—especially outside of metros—he was looking for inspiration, having dismissed the laptop and keyboard as unviable options for what he had in mind. He opted instead to import 1,000 pieces of a seven-inch Personal Education Player (the word tablet would only enter the lexicon later with the iPad in 2010), having found the right fit for his ambitious entrepreneurial experiment in 2009. Later, another tablet, which was not quite as successful, would help iProf grow. The Indian government’s Akash experiment, which failed to take off as expected, generated enough awareness
Kulkarni, who comes across as endearingly old school, believes in doing a few things well rather than doing too many at once. Growth, not untrammelled expansion; absolute honesty when dealing with customers; attention to little personal details; sensitivity to cultural nuances and
Purohit admits that India’s bureaucratic process is probably the worst. Not so the bureaucracy, all three insist. “There are more great people in government than there are outside,” feels Azim.
and hype about the medium of delivery to help Purohit’s iProf make inroads into the education sector. Five years after it was founded, more than 5,00,000 students are now using the iProf product. The country’s largest personal education tablet provider via Android-based apps, iProf combines imported hardware with an Indian software platform to provide educational content that is procured by partnering with the right academic institutions and content providers like McGraw-Hill and Macmillan. After launching in Gujarat and Bihar, iProf did its first big state-wide rollout in Meghalaya in 2012 before winning a second big, nationwide contract for Mauritius. Market leaders with more than 80 percent of the market share, the B2C-turned-B2B company has raised `96 crore in investments and has recently won a nationwide contract to provide a Learning Management Solution to CBSE’s 15,000 schools and 1.5 crore students across India to help them leapfrog into the digital era.
due process—an ingrained habit he attributes to years of meticulous “filing” in government—are the cornerstones of his work ethic. Like him, Purohit also cautions against obsession with a looming quarter’s revenue and stresses on ensuring that once a product reaches the end user, you must always know whether it is being used. Azim learnt well from the mistakes he made the first time around. Focus on supply chain management and don’t allow inventory to pile up, he advises, something that had made it difficult for him to liquidate when he quit his first venture. More importantly, in a word-of-mouth market like health care, you can’t disturb the local equilibrium. It will only trigger a butterfly effect that will benefit no one. Glocal has now found a way out; by turning to secondary care instead—“hospital quality at nursing home prices” and has changed an adversarial relationship with entrenched interests to one of co-option by not threatening local livelihoods. Sticking to a guiding philosophy is alright, but always keeping an ear to the ground helps, he says.
IAS officers turned entrepreneurs
speaking up On leadership and building winning teams
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ut the decision-making layers to a maximum of two; improve the quality of performance by training the hell out of your employees; and then trust them to do their job is what Kulkarni believes. He saw an opportunity where others usually see an expiry date. Brickwork Ratings has no retirement age, choosing instead to harness the power of India’s nifty public sector bankers whom he credits with the success of his ratings agency. Their collective wisdom trickles downward, and respect, in turn, comes easy from the younger bunch—who may just be naturally inclined to think they are smarter than their bosses, he adds with a laugh. All three agree that public administration offers unique lessons in teamwork— the most crucial being that even though you can opt for large teams, you almost never get to pick them and must learn to work with what you have. “The whole establishment is a queue”, says Kulkarni, where both reward and punishment are out of your hands. Salaries are fixed and appointments, transfers and promotions are determined by somebody else. That’s where tradition, training and relationships come into play, making the government very good at crisis management. Little happens due to just one person’s work and the job at hand often trumps the search for personal glory and one-upmanship. Purohit, while admitting that the private sector may theoretically offer you flexible hireand-fire powers, feels the dearth of good talent—a rare commodity—is still a constraint. The government prepares you well, he agrees. In any case, the biggest drag is the number of people around you, admits Kulkarni. As IT secretary he chose the support of two, while opting for only one in the biotechnology department. As Glocal grows, Azim also warns against allowing corporate headquarters to bloat up. “When
Kulkarni staunchly advocates delegation. Train, trust and delegate— Kulkarni believes in keeping his employees in an empowered state of mind to better unveil their inner strengths. Vivek Kulkarni, Brickwork
One of the most important lessons Azim learnt as a young officer was from a district magistrate, his boss, who told him that he would have a lifetime to learn the law, but only that one moment to do the right thing in the field. Syed Sabahat Azim, Glocal Healthcare
Sanjay Purohit, iProf
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bureaucracy grows, people only generate more work for others,” he cautions. If it’s not lean, it will only slow you down. Besides, more energy will be spent in managing internal dynamics than focusing on business outside the office, he adds. Kulkarni staunchly advocates delegation. Train, trust and delegate—Kulkarni believes in keeping his employees in an empowered state of mind to better unveil their inner strengths. Meticulous feedback and ratings from clients are used as metrics for compensation. “Keep a close watch, but don’t over-manage, for if you are able to delegate your work, then consider 95 per cent of it done,” he says, happily admitting that he really doesn’t have much to do! He is an advocate for natural justice when dealing with under-performing employees. Citing a government clause that says action taken in good faith will be protected, he offers it as a remedy to absorb well-intentioned bad decisions. “There is no right or wrong decision”, adds Azim, “So just take one…the heavens won’t fall!” One of the most important lessons he learnt as a young officer was from a district magistrate—his boss—who told him that he would have a lifetime to learn the law, but only that one moment to do the right thing in the field. It’s this decisiveness that has helped him defeat the difficult and challenge the impossible. He firmly believes that completing something is more important than starting something brilliant, while admitting that the need to start something new for an elusive sense of satisfaction before being transferred is the reason behind MoUs and foundation stones outstripping completed projects in India. The private sector may offer an opportunity to build incrementally, something that is sorely lacking in the government with its transfer roulettes but Kulkarni says an individual-neutral, institutionalised approach is the way to go. Purohit feels that though the government is great at recruiting and retaining great minds, the private 2 8 | INC. |
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Azim warns against listening to experts who have no field knowledge, choosing instead to embrace his own ignorance, own it and then just turn to Google. “If you want to do something well, do it yourself,” he says adding that if he had to build a temple it would house Google. sector sure knows how to train them, providing a critical edge. Azim also warns against listening to experts who have no field knowledge, choosing instead to embrace his own ignorance, own it and then just turn to Google. “If you want to do something well, do it yourself,” he says, adding unabashedly that if he had to build a temple it would house Google. Glocal, he adds, is a local enterprise built on the collective wisdom of the world—whether it is making medical devices or software or designing, building and running hospitals.
insider tips on breaking that bureaucratic barrier
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ulkarni is quick to admit that when a citizen or someone from the private sector complains about the government, he tends to believe the former at least 99 per cent of the time. Government can be impersonal, he says, and there is usually no penalty for not working. Combined with countless systems and processes and accounting for corruption, the State can be daunting to deal with. “Every entrepreneur who needs any approval or clearance from the government should know that there are about 15 layers in each department. Even if each layer takes three working days, your
file will take about 60 days on its way up and 20 days on its way down. Those who would rather pay speed money to get a quicker decision must remember that once you start, the department continues to expect it from you and might deliberately delay your file.” He advises tremendous patience and perseverance, and developing good relationships with officers at all levels as well as the clerical staff. “If not getting government clearances is frustrating you, frustrate the individual sitting across the table by following up so much that people get to know that the only way to get rid of you is to clear your file”, is Azim’s advice. “The good thing about the bureaucratic process is that there is always a higher level available for appeal,” says Purohit. The lower echelons are tied up in a repetitive day-to-day process and cannot be expected to solve, or even grasp, a complex problem. The higher bureaucracy possesses exceptional intelligence to spot opportunities and can better evaluate a problem and offer the way forward or out of a jam. Preeti Singh is a Delhi-based writer, and was the editor of iGovernment.in till recently. She can be reached at @TruthAbtNobody.
Tactics. Trends. Best Practices.
Strategy
Even before the brand Paper Boat was conceptualised, it had a story around it—of memories and of the simple past that we miss in today’s fast-paced world.
COURTESY fisheye design
Branding A sip full of good old days A range of ethnic drinks creates a successful brand using the evocative tug of childhood memories The power of storytelling has gained much currency in the world of management and company building. Brand strategists and marketers say it can be the difference between a good brand and a great one. Effectively using the art of storytelling to create a brand pull isn’t an
easily won virtue though. Hector Beverages, a Gurgaon-based beverages company, seems to have been able to spin quite a profitable tale for Paper Boat, its range of traditional Indian drinks. Co-founded by Neeraj Kakkar, James Nuttall, Neeraj Biyani and Suhas Misra
(who recently left the company), Hector Beverages’s flagship product was the energy drink Tzinga that it launched in March 2012 and which now sells more than 1.5 million packs a month throughout India. After Tzinga’s launch, the trio wanted JUly 2014 | INC. | 2 9
Strategy
Design Deconstructed to expand their product portfolio of functional beverages. They obviously didn’t want to launch another cola flavoured drinks and compete with bigwigs such as Pepsi and Coca-Cola. They knew success wouldn’t come from cluttered categories; they were scouting for drinks at the periphery of the mainstream beverage market. Many of their “what next” product brainstorming sessions would happen during the lunch break in their Gurgaon office. Misra and Kakkar brought in lunch from home while Nuttall would order in food. Every lunch hour, there was a constant bone of contention between the three co-founders—who will get the biggest share of the aam panna that Misra’s mother would dutifully send everyday in the summer heat of May 2012. Nuttall once asked if he could buy aam panna from the market. Their inability to come up with a positive answer led to a breakthrough moment. Nuttall suggested they should launch aam panna in ready-to-drink packs—to give the desi concoction the packaging of a modern drink. “As Indians, we take these traditional beverages for granted. We never thought it could be bought from the market. They have always been prepared, generation after generation, at home. But, James, the non-Indian, spotted a business potential in these homemade drinks,” recalls Kakkar. As Kakkar started thinking about this idea, he realised he missed the kaanji, fermented purple carrot and mustard drink his grandmother used to prepare. Unfortunately, nobody else in the family knows how to make this drink, Kakkar says. He realised that the kaanji can be saved from similar extinction across many homes it if becomes commercially available. Kakkar and Misra set out to test their hypothesis that there was a business merit in reviving these drinks—the 3 0 | INC. |
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The concept of memories and childhood has been brought out effectively through different design elements in the packaging. Ashwini Deshpande, founder of Elephant Strategy + Design deconstructs the inspirations and ideas behind Paper Boat’s packaging for Inc. India. The White Base We wanted the background colour to resemble paper. The problem was how to get the printers to develop our version of that perfect slightly off-white. It was after several iterations that we were able to get the matt white paper-like look.
Houses and Fishes
All the packs have these little drawings to represent the way a child views the world. It isn’t a children’s brand but a brand that brings back childhood emotions. Apart from colours, different cues such as frogs, trees, fishes are used for each flavour to differentiate them from each other.
friends they polled agreed enthusiastically that it was a smart idea. Thus began the journey of their new brand of drinks, which they called Paper Boat. Interestingly, even before the brand was conceptualised, it already had a story around it—of memories and of the simple tastes of the past that we miss in today’s fast-paced world. MarketGate, a brand and business strategy consultancy firm was brought on board to help the co-founders elaborate on their brand ethos and brand position-
Strategy
Paper Boat Sketch The paper boat is drawn like a sketch and isn’t too prominently highlighted on the pack. Everyone has their own version of paper boat in their minds, so we didn’t want to define the boat for the consumer but rather wanted them to imagine it on the basis of their experiences. The logic is simple— sometimes you fill up everything and it shouts at you but sometimes you give it some extra space and it comes to your notice and that is how we designed the Paper Boat.
Colours
One look at the doy packet and it is the fruit and the flavour that comes to notice. This has been done deliberately by Elephant by using bright colours. Also, all the colours chosen are those that resemble the fruit. This has been done to reassert the goodness of fruit and to further the point that the beverage doesn’t have any synthetic flavours. More importantly, colours that unnecessarily scream for attention on the shelves were kept out.
ing based on this concept. Shripad Nadkarni, founder, MarketGate Consulting said Hector was aware of the need to appear contemporary despite their traditional drinks. “We wanted Paper Boat to evoke fond memories of the bygone era in a present day context,” says Nadkarni. The idea they wanted to communicate was that even though life might no longer be simple, it certainly has changed for the better in many ways—greater connectivity, health care, infrastructure. “We wanted the brand philosophy to look at the past fondly but to also say that “life is still beautiful”. This idea of the simple, familiar past also tied in well with the contents of the
drink. Kakkar says, “these are simple, uncomplicated drinks where all the ingredients are familiar since these have always been made at home for generations— unlike the chemical “secret” concoction of carbonated drinks.” Also, they are completely natural, without any artificial flavourings and additives. The brand’s strong ethos helped the founder trio define their core audience— the young adult who is working, always running on a treadmill and would’ve had these drinks in the past, probably when growing up. They were apprehensive about limiting their target consumer by defining it to a young demographic. But, we figured Coke and Pepsi also target the age group of 18-25 and it is still consumed by people of all ages; beverages do tend to have a narrow core audience, explains Nadkarni. The next logical step was to find the perfect name for the new range of drinks. Ashwini Deshpande, co-founder of Elephant Strategy + Design who designed the packaging came up with the name Paper Boat. Deshpande says she got the idea from Jagjit Singh’s gazal, Woh Kagaz Ki Kashti. The song re-creates the whole world of the simple past in the listener’s mind—a world full of imagination and the stories grandmothers tell. “It symbolised everything we were conveying. Making a paper boat is such an innocent joy—we’ve all done it as children for the sheer joy of creating something,” she adds. The team did mull over another option for the name—good ol’—the colloquial American term for old-world charm. Eventually, Paper Boat won over, mainly because of the universality of the concept and the immense potential of personal stories getting attached to the concept. “A brand is successful if it can tell you a story you can associate with. But, you can’t stop at telling a story. What is more important is whether the brand can associate with your story? The cusJUly 2014 | INC. | 3 1
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A Design Brief Paper Boat has successfully taken its brand to social media. Dave Banerjee, CEO, Fisheye Design which worked with Hector Beverages on their digital branding says his job was made easier because the clients came with such a clear picture of what they wanted. Banerjee wishes all his clients were able to articulate their objectives and story as clearly. Here are his tips to companies on how to work with, and make your design agencies work well for you. Listen up, CEOs! Clarity: Have a clear product brief before you approaching a professional agency. An articulate brief helps the agency to visualise it, make it better and get the right strategy in place. Trust: When you hire a professional, give them necessary space to do their job (which would also be their competence!). Think about it—when you visit a doctor, don’t you let him write a prescription for you? It doesn’t work other way around, does it? In the past 25 years, I’ve never had a client as trusting as Hector. They wouldn’t nitpick and micromanage. We didn’t have to get their approval for each piece of content. Objective Feedback: Often there is a gap between understanding and implementation of design or product brief so it is absolutely essential for clients to give timely feedback by having review meetings or discussions. Impulsive reactions or criticism don’t help either party and might reduce the agency’s morale. It works best when the client thinks of the professional agency he or she hires as its partner rather than a third party vendor. This reduces the scope for blame game and both parties then feel equally responsible for good as well as bad things.
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tomer matters more than the brand. Paper Boat did that—it’s a place which encourages you to revisit your childhood stories,” says Deshpande. With the name decided, the team at Elephant started working on Paper Boat’s packaging. Deshpande says three key words guided the design—simple (known ingredients), goodness (health benefits) and delight (joy of drinking). The main challenge, Deshpande says, was to communicate the brand philosophy by keeping design elements to a minimum. “It is extremely difficult to make something look simple and yet communicate a lot through it,” she says. Kakkar says although they were sure
encer community, mainly because this segment isn’t as price-conscious. Also, they tied up with modern trade stores such as supermarket chain Food World, HyperCity, Nilgiris and Namdhari’s Fresh and placed it in 500 stores across four Indian metros. “We wanted consumer to discover the product from the shelves themselves and modern retail is a very conducive environment for people to experiment. Consumers can pick and choose themselves. In mom-andpop stores the shopkeeper comes in between the product and the consumer,” says Nadkarni. What they also did was create a Facebook page for Paper Boat. They didn’t
Ashwini Deshpande, co-founder Elephant Strategy + Design says she got the idea for the name Paper Boat from Jagjit Singh’s gazal, Woh Kagaz Ki Kashti. that people would appreciate the high quality of their aam ras or jaljeera (the first two flavours they introduced), they were apprehensive whether they would be willing to pay thrice the amount for what a roadside hawker charges. Since, it was for the first time such drinks were going to be available in organised retail, the cofounders wanted to ensure it will be accepted by consumers. Instead of adopting an aggressive marketing strategy, the trio decided to leverage on word-of-mouth. They wanted to understand if consumers would discover and appreciate these new flavours on their own. They took the route of limited distribution. But, they did so by entering into high-profile associations with Jet Airways and IndiGo Airlines. Air travel has become frequent among the upper middle class which Hector had identified as their key influ-
really talk about Paper Boat but started discussing childhood memories—the games that were played of raja, mantri, chor, sipahi or hopscotch or Flames. The page is built around their philosophy that “life is still beautiful”. This generated a lot of buzz around the drink. By June 2013, Hector Beverages was selling 5,00,000 units per month. The great response pushed them to increase the production capacity of their Manesar plant. By September 2013, they began work on a second manufacturing facility. The pace of sales kept up, and the company launched four new flavours— kokum, kala khatta, aam panna and gol gappe ka paani—by the end of 2013. Kakkar though is eagerly waiting for the kaanji of his childhood to be launched soon, which he says should happen within the next couple of months. —Sonal Khetarpal
Strategy
Hiring How to Make Great Hires Overseas To succeed in global markets, you’ll eventually need feet on the ground. Fortunately, there are many things you can do to connect with the best candidates. feet on the ground in order to maximise a market’s potential. But whom to hire, and how? You can learn a lot from Lieberman’s experience. Though he says he simply got lucky in finding an ideal employee in China, the networking and relationship building tactics he employed are the exact skills that many experts say are vital to finding the best candidates. You can do a fair amount of that in the U.S., by attending global trade events and conferences. And, as we describe here, you can tap many other resources, including outsourcing your hiring. —By Alix Stuart
Learn the real cost of labour
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You want to know whether your product or service has potential, certainly, but you also need to research a potential market’s labour laws, legal infrastructure, industry-specific regulations, and more. In Brazil, for example, taxes, mandatory bonuses, and employerpaid social welfare costs will have you paying three to four times as much in statutory benefits versus the U.S. terminating an employee can be costly and complex, so look far beyond base pay.
Get (free) expert advice
The U.S. Chamber of Commerce has offices in most major international cities. That can be a great starting point both for learning how to establish yourself in a new country and for finding viable hires there. The U.S. Commercial Service, part of the Department of Commerce, also offers a range of
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Larry Lieberman, founder and president of Vision Quest Lighting, didn’t set out to make a great hire in China—or any hire there at all. Lieberman’s Ronkonkoma, New York-based company employs just 33 people, but, as is the case with many similarly sized manufacturers, it sources some products in China and sells through distributors in several countries. That was the extent of his global footprint until, he says, “I struck up a correspondence with an export manager about attending a trade show in Hong Kong. I never did go, but we kept emailing, and nine months later, I hired him to oversee our sourcing in China.” As the world continues to flatten, odds are good that your company is either doing business overseas or assessing the possibilities. Your initial foray may not require you to make any actual hires, of course, but at some point you’ll need the proverbial
Strategy
Nothing Foreign About Going Abroad
Expanding overseas has quickly gone from long-term goal to reality for many small companies.
60% 65% 5% 8% 32% of small to mid-size companies say they do business in more than six countries.
say expanding overseas will be a top priority over the next three years.
say their main goal is to increase revenue or gain customers.
say their main interest in overseas markets is outsourcing or reducing costs.
say they have no employees in at least some of the countries where they do business.
*Source: CFO Research and High Street Partners
informational resources designed to help U.S. companies enter new markets. (You can tap the resources of the latter at trade.gov/ cs/services.asp.) Another resource: U.S. business schools can connect you to alums who have returned to their native countries.
Learn the cultural nuances of hiring
Interviewing candidates in other countries can be a real eye opener. You are often allowed, for example, to ask questions about their personal lives that you’re prohibited from asking in the U.S. On the other hand, the interviewing dynamic in many countries can have the candidate seeming polite to the point of being obsequious and reluctant to ask any questions. Talk to business partners familiar with the market you’re considering about how best to evaluate candidates there. Recruiters can help with this, too.
Look for workarounds
Import your new hire (temporarily)
Bring the person to your U.S. office right away and immerse him or her in the company’s history, operations, and growth strategy. The person’s first order of business may be to land customers in, say, France, but as an extension of your company, he or she needs to understand everything about it. Talk through tactical issues such as time-zone differences, email conventions (Americans tend to be curt, for example, which can be construed as rude in other countries), and expectations regarding vacations and holidays.
If you aren’t ready to plant a flag overseas, there are plenty of hybrid approaches. You can find and then strengthen your relationship with a distributor, to the point at which that partner dedicates one or more employees to your business. You could also try U.S.-based businesses such as Globalization Partners, a Boston-based company that will hire employees on your behalf; it acts as the employer of record and handles payroll and all the legal complexities of an overseas operation. Then it contracts the employee exclusively to you.
Meet, greet, and network like crazy
Talk to customers, suppliers, even employees with relatives who live abroad. Recruiters can also help. You want people with their own strong local networks, both in terms of reaching out to prospective customers and making additional hires. When Cleveland-based consulting firm NineSigma was introduced to a savvy executive in Seoul, South Korea, it decided to open an office there to take advantage of his contacts and expertise. JUly 2014 | INC. | 3 5
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In 2006, after having enjoyed plenty of success in his first eight years as a business owner, David Handmaker saw the tide turning. His Los Angeles-based printing company, Next Day Flyers, was losing ground to competitors that were adept at finding and serving clients online. Handmaker knew he needed to respond, and fast, but he wasn’t sure how. Transitioning from traditional sales and marketing tactics to Web-based techniques looked to be expensive: He would need to hire new people, invest in additional technology, and figure out how to put those new resources to best use. Until this point, he had relied on his gut for such decisions, but now he 3 6 | INC. |
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realised he needed a more rigorous approach. The time had come to do actual strategic planning. As entrepreneurial milestones go, this isn’t one that inspires founders to crack open the champagne and toast a Big Moment. Strategic planning smacks of something tedious or grimly bureaucratic: a time-sucking exercise that pulls people away from their real jobs to no good purpose. It may even seem like a genuine threat to the nimbleness and flexibility that most entrepreneurs thrive on and credit for their success. Why go to the dark side? Because it can shed a lot of light on how to move forward. And, approached with the same energy and focus that you bring to every other aspect of your business, it can yield tangible benefits in relatively short order. Even experts who make their livings advising companies on strategic planning agree that you can put off formal planning—for a while. But there is almost always a limit to how far a seat-of-the-pants management approach can take you, as Handmaker found. And sometimes you reach that limit sooner than you expect. Two factors now make strategic planning even more important, says Ken Esch, a partner with Big Four accounting firm PricewaterhouseCoopers: globalisation and technological innovation. The flattened world brings both new competitive pressures and new opportunities to grow—if you’re disciplined enough to seize them. Meanwhile, technological advances have levelled the playing field for smaller businesses that want to compete with larger ones, but they have also accelerated the pace of change and the degree of uncertainty every business owner has to live with. You need a way to assess the big picture, and that’s where strategic planning comes in.
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Planning That Sounds like a Plan Strategic planning may sound intimidating, or unnecessary, but without it, you may miss big chances to grow
Strategy
Eye on the prizes
time we need a strategy,” Doering says. “Otherwise, it’s like being in Though the primary purpose of a strategic plan is to help you chart New York City without a map—you want to check things out, but the smartest possible path to growth, there are other benefits. A you’re going to get lost.” good plan ensures that every member of your senior team is working toward the same goals, and helps you be smarter about Inside the process budgeting, hiring, resource allocation, and succession planning. If You would be surprised how quickly you can get from your initial you’re looking for external financing, it can reassure lenders that strategic-planning meeting to actual results. Handmaker kicks off you have both a vision and a specific plan to achieve it. his annual strategic-planning session each September with a fresh Keep those benefits firmly in mind as you begin the actual assessment of core capabilities and external factors that could process, because it starts with a corporate exercise that can be a real impact business. This isn’t just abstract theorising: In its initial groaner: a SWOT analysis. Yes, you’ll start by listing your foray into strategic planning, the company placed actual orders company’s strengths, weaknesses, opportunities, and threats. The with an online competitor to gauge that company’s capabilities. key is to connect that step to specific When the competitor failed to deliver, actions as quickly as possible. Handmaker became convinced that his Handmaker says that once his SWOT company could enter and succeed in the analysis revealed that wasteful online space. manufacturing processes and poor In the past, that single experiment on-time delivery performance were might have been enough to win the major liabilities, he translated that into an project a green light. Now, when his instant action step: Hire a COO planning process uncovers a potential experienced in lean manufacturing. opportunity, Handmaker vets it against Within six months, Next Day pared half his personal appetite for risk and assesses a million dollars from its annual paper its affordability and feasibility. If those costs and pushed its on-time delivery hurdles are all cleared, the idea is passed rate above 99 per cent. “I learnt that a to operational and marketing teams, great strategy is worthless if you can’t which develop a plan for implementamatch it to a tight operational plan,” tion. Sounds clunky? It’s not. Handmaker Not sure whether you’re Handmaker says. tries to complete the entire process ready for strategic planning? Focus primarily on the two extremes of within three months. Steve Harris, founder and president of the People Since the company embraced your SWOT analysis: your best Advantage, suggests that no strategic planning eight years ago, its opportunities and your biggest threats. matter how new your busirevenue has tripled. To make sure you get from strategy to ness may be, you may need a implementation as quickly as possible, strategic plan if: Stress reducer specify exactly who is responsible for You’re unhappy with your Even very small companies can benefit implementation—the actual person or business results from strategic planning. Stanley Meytin, people, not simply a department or team, You’re seeking funding or founder of True Film Production, a sixsays Linda Pophal, owner and CEO of considering making substantial investments. person, New York City-based videoStrategic Communications in Chippewa You’re planning a major production company, adopted a formal Falls, Wisconsin. Similarly, spell out how expansion of your staff. approach at the start of this year. He says progress will be monitored. You’re about to step back he made the leap when he realised his Don’t worry about sacrificing flexibility. from day-to-day company wasn’t operating smoothly Your SWOT analysis will result in longinvolvement and need to enough to cope with the growth it was term objectives; you should break them shift decision making experiencing, let alone the growth it wants. down into shorter-term goals. Anselm to others. Meytin’s initial SWOT analysis helped Doering, founder of EcoLogic Solutions, You’re about to make big him quickly develop short- and longa New York City-based company that bets about how your company will grow. term goals focused on internal makes and sells environmentally friendly “When in doubt, start creimprovements to customer service. cleaning supplies and technologies, says ating a plan,” Harris says. “Strategic planning is really an organised his company sets one-, three-, and five“It’s better to be challenged way of doing things that makes year goals, focusing in the near term on with the process because everything less stressful and lets us the 10 per cent of its priorities that are the you’re a little early, versus quickly put new ideas in action,” he says. most urgent or have the most potential. needing a strategic plan that you don’t have.” —By Randy Myers “We have to stay flexible, but at the same
Five Clues You May Need a Strategic Plan:
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Strategy
Managing The Source of Pixar’s Magic? Straight Talk
To infinity and beyond Under Ed Catmull’s watch, Pixar’s films have earned 30 Academy Awards and grossed more than $8.3 billion worldwide.
Since Woody and Buzz first burst from the toy box in 1995, Pixar’s 14 films have managed the hat trick of being at once technically inventive, emotionally resonant, and commercially gratifying. Ed Catmull, president of Pixar Animation Studios (and of Walt Disney Animation Studios, since the 2006 merger), built the studio with— among others—Steve Jobs and storytelling maestro John Lasseter. In his new book, Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration, Catmull explains how they created a culture in which no one is without a voice and new ideas are protected. Catmull recently spoke with Inc. editor-atlarge Leigh Buchanan
Pixar originally built computers that processed high-resolution images. How did those origins influence your approach to innovation?
Because we started as a hardware company, I learnt about manufacturing. And I was surprised that some principles of creativity came out of that environment, although people didn’t think of it that way. That’s why I found what Toyota did so remarkable. The company thought about the assembly line as a way to get product out. But it also engaged people in solving problems. And that turned the company into a creative environment. I saw that I had been defining creativity too narrowly. How do you manage the tension between building on something that has proved successful and creating something wholly new and original?
A director will say, “Here are things that I think are interesting.” And some of those ideas will be pretty far out. A rat that can cook. An old man who goes off in a house attached to balloons. These are not obviously commercial ideas. Other ideas look as if they will be more commercial up front. If, at Disney, we do a musical like Frozen, we know it has a good chance of being successful. When we do a Cars film, we know how it is going to 3 8 | INC. |
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do. So we try to blend things we know will do well and things that aren’t obvious at all. By putting into the hopper both high-risk and low-risk, we signal to the team that we want it to be creative. But we’re not betting it all on high-risk things, which would turn us into a boutique art studio. Some companies run into trouble because they overly rely on the audience response. They say, “I am going to tweak the product in response to what the audience has shown it likes.” But that results in incremental change and makes it more difficult to conceive of and to allow for something radically new.
Cast of Characters Lightning McQueen, and a few of the other computer-animated stars of Pixar’s 14 feature films
And you need both. You want to be in the middle ground between those two pulls. Your book’s title refers to “unseen forces” that hobble creativity. What are those?
There are levels to what we can’t see, starting with the fact that, as we grow in management responsibility, people start to behave differently around us. You go into meetings where people have prepared for you. They don’t want any surprises. That makes it harder for you to get information. Then there’s this imperative toward clarity that screws a lot of companies up. People want clarity, and so the leader tries to give it to them. But real clarity may not be there, in the situation. That leads to oversimplification and a false sense of confidence. At the same time, there are all these random events that have influences we don’t appreciate. Right now, there are things going on in this organisation, and I can’t see them. So I have to be more aware, always probing, always looking for clues. What roles do metrics and analysis play in an organisation whose deliverables involve aesthetics and emotion?
When we make a film, we have hundreds of people producing hundreds of thousands of pieces of artwork. It’s orchestrated in a very complex way, and we’ve got a lot of tools to assess the flow of information around the studio. So we can do quite a bit of analysis. But a lot goes on that we can’t measure. And, in fact, there’s a danger that measuring tools
Strategy
might lock us into a way of thinking. So every once in a while, we’ll step back and say, “Let’s break out of that mode of thinking and look at this in an entirely different way.” For us, it’s got to be a mix between the gut, instinctual side, and getting real data. Pixar seems like a company that has never run low on ideas. Have you ever experienced fallow periods?
We are never short of ideas. But an idea is extremely complex. By the time consumers see something, they may think it’s this one simple thing, with a name, like an iPod or an iPad. But underneath that thing are millions of ideas. So this notion of “the idea” is the wrong way to think of it. The question is always, Do we have a team that can tackle interesting problems and solve them? For a company that experiments so much, you’ve managed to hold quality very steady. How?
Pixar has had 14 successful releases in a row. Every one of them opened at No. 1 at the box office. But that started—right at the beginning—with us saying, “We are going to screw up. Things are going to go wrong.” And things did go wrong. We’ve had meltdowns along the way. Most people aren’t aware of that because they only see the final product. We’ve had fairly big problems. But when they happened, we recognised them and we did a restart. In recognising and catching a problem, regardless of the stage, we have been able to maintain a pretty high standard. Pixar’s keystone process is the Braintrust, a meeting used to deliver constructive feedback on works in progress. Can a company just put something like that in place? Or must it develop over time?
Disney’s team members, knowing about Pixar’s Braintrust, had put together something they called the Storytrust. But they didn’t actually know how it operated. We explained to them that the idea was to remove power dynamics from the room. But a few months into it, we realised they were deferring to what John [Lasseter] thought before they would say what they thought. That’s counter to what the Braintrust is about. We explained why deferring
Flying High Pixar’s 2009 hit Up raked in $731 million in worldwide ticket sales.
Inside the Braintrust
Ed Catmull describes Pixar’s Braintrust meetings as one of the company’s key techniques for straight talk. Every few weeks, peers gather to assess movies in progress and call out problems. Here are the three characteristics: + Participants give the director notes and suggestions. But the director has final say on what he or she will do. + Participants identify things that are wrong, missing or unclear. They do so in a constructive way, using specifics with the goal of inspiring directors to want to find fixes. + Management is responsible for ensuring the room is a safe place where people can speak candidly and without worry of embarrassing themselves.
to John was actually damaging to them. They got better, but it took a few years before they were operating at a very high level. The reason is, it’s not sufficient to say we trust each other. Trust can only be earned over a period of time. Now, [the Disney meeting] has turned into a remarkable room. But it took work. What did Disney’s acquisition of Pixar teach you about combining cultures without diluting creativity?
At the time of the acquisition, we put together a list of things we thought were important to our culture. It was a rather broad list. Some of it was a little on the silly side, and some of it was absolutely crucial. But at the time, we didn’t know which was which. The agreement was that, though we were wholly owned by Disney, we would still do things in a unique, Pixar way. So we have different systems and policies. Because John and I were in charge of Disney Animation, we made a clear choice that we would not merge the two studios, nor allow the studios to do any production work for each other at all. We felt this was important culturally, because when a studio solved a problem, then it had the psychological benefit of knowing that it did it on its own. Now people are proud to be part of Disney, but they believe they are Pixar. It’s been a model for taking an existing strong culture and letting it thrive. —By Leigh Buchanan JUly 2014 | INC. | 3 9
strategy
The Way I Work | Beas Dev Ralhan, Next Education India
“I never solve problems that don’t pose an existential risk to the company.”
His pedigreed education—M.Sc from IIT Bombay and MBA from London School of Business— would’ve easily set up Beas Ralhan for a promising corporate career. But, Ralhan’s love for developing products made him a start-up junkie. In 2007, after his stint at UK-based online gaming company, PartyGaming, which he had helped grow to $12-billion, Ralhan finally decided to brave an entrepreneurial plunge. He co-founded Next Education, a digital learning solutions company, with his former colleague Raveendranath Kamath and two other co-founders who have since left the company. In FY 2013-14, the Hyderabad-based company closed its books with `150-crore in annual revenues, and a customer base of more than 6,000-plus schools. Ralhan credits his ability to grow the company to his approach, one that he says pretty much resembles a school timetable neatly bookmarked for all activities. In this story, he takes us through that studied model. As told to Sonal Khetarpal | Photographs By Arshanapally Prabhakar Rao 4 0 | INC. |
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My day is usually quite structured. I get up at 6.30am and start working by 7am. I use the morning quiet
to email my team members—responses on stuff they’ve sent me, or ideas and instructions for the day ahead. This way they have their to-dos for the day lined up even before they reach office. Responding to emails takes me almost an hour. This is followed up with a conference call with the sales team. I have to get a daily update on the new schools that have enrolled for our e-learning solutions and the ones from whom we have collected the payments. We have 6,000-plus schools as customers in 500 towns and cities across India. In addition to providing e-learning solutions for lower primary to secondary class (the K-12 segment), we also offer schools maintenance services for their hardware upkeep of digital content. Schools pay us an initial installation fee and the rest of the am ount comes through monthly instalments. This makes our company’s business model very operations heavy so it’s essential to keep a tab on everyday revenue movements.
With A Free Hand Beas Dev Ralhan feels that he should learn to micromanage a tad bit more to have a better grip on what his team is doing.
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A
We have around 350 to 400 people in the sales team all around India, however my focus is on the 25 people who comprise what I call the “bridge team”. This team has people that are common between the sales team and the R&D team and they are the ones responsible for launching the product and making it successful. Having such a bridge team is quite crucial for us as e-learning programmes are quite complex. It is only when my sales team understands the product in and out that they will be able to explain better its value to the customers, thereby, increasing the chances of making a sale. My morning call at 8am is with this team. It is then their responsibility to disseminate the information to the rest of the sales force. After these calls get over, around 9am, that I have my breakfast and start getting ready for work. Office is only a kilometre away so I walk the 15-20 minutes it takes me to get there. In the past 12 years, or ever since I began working, whether in Dallas for Infosys Technologies or in Europe for PartyGaming, I’ve never stayed more than two kilometres away from my place of work. It is stupid to waste two or three hours of your life everyday in commuting from one place to another. I reach office by 10 am. Since I have already sent out the instructions and replied to emails, no one usually disturbs me for the next two hours. Till 12.30pm I have the luxury of me-time. I use these two hours to critically review our e-learning solutions. Each day, I pick up one of our products for examining—one day I will be thinking about TeachNext, our audio-visual learning solution to aid teachers in teaching students, planning lessons and assessing students; the next day, I’m scrutinising about one of the self-learning programmes for students, for instance, the MathsLab or EnglishLab. I will think about the new updates made, features that should be added or removed, if any new insight should be included. That way I analyse seven different products in a week. Yes, I work for six and a half days, taking a break only on Sunday evenings. I understood the value of ideating alone after reading the research paper The Death of Leadership in Management by Dana L. Hudnall who says that real ideas and solutions require solitude and deep think-
ing. R&D at its core is not a team activity. In a group, when people discuss ideas they might not find the best solution but the most easy solution, Hudnall says. s I ideate, I write my thoughts down. More often than not I will also draw the features I want to include or change. Since drawings are more visual, it’s easier to explain the new idea or concept to the R&D team. In product development, I feel, the common mistake we make is we visualise the look-and-feel of the product but overlook how the customer will interact with the solution. Drawing it out really helps with that. After these two hours of sitting alone in my cabin, the rest of the day in office is spent in meetings. I have divided my meetings in two parts. From 2pm to 5pm we have tracking meetings wherein I will get updates and monitor the progress of one of the departments in the organisation, HR or call centre or admin. Then, from 5pm to 7pm I have review meetings with the same team. I will then analyse each metric, solve problems and try to optimise processes, if required. All the issues that arise in the company, apart from tracking and optimising, I delegate. Any problem that does not pose an existential risk to the company should not be solved by me. And, I don’t even listen to those problems. For me, the best way to delegate is by not listening. If I listen, I will have an opinion. If I form an opinion, I will share it. The moment I share it, people will just follow it without even giving it a second thought. I don’t want to think about such problems. I don’t have a God’s complex because I am the CEO of the company, I can’t solve every problem, and I don’t want to try. My core strength is R&D and I focus on that. We end all meetings by 7pm. I don’t work at all after that. I learnt this while working in the US. There, everyone starts work as early as 8 am and ends it by 5pm or so. You then have the entire evening to yourself and I find that it really helps increase productivity the next day. After 7pm, I’m not really available to my staff. I spend time at home with my wife, watching television or reading a book.
“For two hours every day I take the luxury of me-time which I use to critically examine our products.” 4 2 | INC. |
July 2014
strategy
These meetings also help me understand consumers’ expectations from our products and get first-hand feedback. It helps recalibrate my thinking on product development for the rest of the year. I have also realised to get honest feedback it is important that I visit schools in regions where I can speak their language. Schools are notoriously colloquial. It is difficult to get them to say more than an okay, good or bad, especially if you don’t talk to them in their regional language. So, I make sure I visit all the schools in north India. Fortunately, my co-founder Raveendranath Kamath, who takes care of finance and servicing side of our business, is from Kerela and can speak or at least understand several south Indian languages so he covers schools in that region. Whichever region we cover, both of us concentrate on schools in tier two cities. This is in line with our company’s philosophy to make digital learning products affordable and hence, accessible for all. Digital learning solutions even now are considered to be the domain of the elite schools of the metros due to their high cost. So, schools for whom cost is a prohibitive factor can’t use such solutions. We focussed on that market gap. We offer digital learning products at almost one third the price of others in our industry; we’re able to do so because we use an open source Linux-based operating system instead of MicroThe Critical Thinker Product development is a way of thinking, believes Ralhan. “For products to be successful, you have to hit the sweet equation of solving soft’s very expensive operating system. The other some important problem and deliver more value than its price,” he elaborates. important cost of these solutions is the technology used. Other players use the cloud platform which costs around `30,000 to `50,000 per This routine is more or less quite fixed, day after day. However, I month. Instead, we offer hardware required for e-learning on indibreak it for two months in a year—in February and March. This is the vidual classroom basis where each digital classroom costs just `4,000 time when schools are preparing for the new academic year and take per month. This approach has worked for us. We’ve been adding 1,200 major decisions about allocation of funds. During these two months, to 1,500 schools every year as customers. I travel and visit around 50 schools. Focussing on tier two town also gives us some great feedback Such personal visits are absolutely essential. Even now a lot of school mainly because schools in these areas have a greater focus on acaprincipals don’t understand the value e-learning adds to the whole demic excellence, not extracurricular activities or all round develpedagogic exercise. They think of it as a trend that will pass away soon. opment of the children, as is the case in metros. Whether it is the If you look at schools in the US and UK, apart from using audio-visual right thing to do or not is an entirely different debate. In fact, it was teaching aids, even their administrative work is done on an ERP system. during a visit to such a school in Lucknow that I saw a group of We can’t say that about India. We are still ages behind. Teachers waste students of Class IX who were running the digital classroom and so much of their time in classrooms just writing on the board, or draw- studying from it on their own. There was no teacher in their class. ing diagrams while the students wait for them to finish. This reduces Seeing students engaging with, and benefiting from, our e-learning the productivity and engagement level among students. With digital solutions gives me a great high. learning solutions, all such tasks are done with a click, and the visual We are targeting to reach 10,000 schools by this year end. This means aids ensure students are constantly engaged. So, it’s important to visit that even if each school has a minimum of 100 students, our e-learning schools to bring in a change in the mindset that e-learning is not just solutions will be used by at least 10 million students. If we are able to another way to charge parents money but an important tool to make improve or increase the interest in studying of even one per cent of these the process of learning easy and fun. students, then I will feel what we are doing is worthwhile. July 2014 | INC. | 4 3
founders forum Ten questions for Rajesh Krishnan
The 40-year old founder of a `50-crore land banking company Brick Eagle is taken in by the Narendra Modi wave and is being bullish. He thinks it is the best time to be doing business in India and has raised `250-crore to buy land for residential projects. Who gives you the best advice?
If I don’t say it is my wife, I will be in big trouble.
What is the best advice you have given your children?
I want my kids to be creative, independent thinkers so I encourage them to challenge authority, explore different things, be disobedient and believe in their own thoughts Whom would you trade places with for a day?
With Narendra Modi on May 16, 2014 and be the prime minister of India for one day.
The biggest myth in business is...
You got to be smart to be successful. The truth is you have to work hard and be persistent.
What have you sacrificed for success?
I was UAE junior badminton champion in school. It is difficult to believe now given my current waistline. What’s the toughest part of being in charge?
The psychographic challenges of managing human emotion day after day, and keeping people excited about the work they are doing. What was the hardest lesson you learnt during your first year in business?
That people can think, say and mean three different things in one communication.
What’s one rookie mistake you made early on?
Believing in the statement ‘samjho ki ho gaya’ and not providing for contingencies.
Describe your power outfit:
Thinking hat and a broad smile
courtesy Subject
My hair
What is the one thing your employees would be surprised to know about you?
4 4 | INC. |
JUly 2014
as told to Sonal Khetarpal
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