Why it pays to have a diverse workforce
The smartest moves the hottest trends and (at least)
13 FIXES FOR 2013
16 reasons to be optimistic
The Magazine for Growing Companies
FIXES FOR 2013
ISSUES Tender Process GST Urban Autonomy Modernise Regulation Medical Tourism Ease of Doing Business
Entrepreneurs lay out their wishlist. Can the
Prioritise MSMEs Faster Implementation
Solar Power The magazine for growing companies
Ashok Soota on crowdsourcing his company logo
Creating an ecosystem
Education Urban Renewal January 2013 | `150 | Volume 03 | Issue 12 A 9.9 Media Publication | inc.com Facebook.com/Inc
6 0 | INC. | JANUARY
14 Innovation Toxic smoke from cooking stoves is one of the biggest health hazards in rural India. Could the Greenway Smart Stove be the way out? by sonal khetarpal
24 13 Fixes for 2013
In this special new year story, we get leading founder-CEOs to put out their wish list for a brighter future of the Indian economy. Is the government listening? as told to shreyasi singh
34 How I Did It
His family wasn’t thrilled that Harsh Neotia didn’t enjoy working for the family’s cement business. Instead, erecting houses and buildings caught his fancy. Happily, that interest has grown into a `1,200-crore business. as told to dhiman chattopadhyay
38 How and Where to Make Money in 2013 (and Beyond) Game-changing trends, hot markets, daring predictions, and 15 reasons to be cheerful about the year ahead. by adam bluestein
This edition of Inc. magazine is published under license from Mansueto Ventures LLC, New York, New York. Editorial items appearing on pages 4, 12-13, 20-22, 38-45 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.
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Cover design by Anil VK
Photograph by SUBHOJIT PAUL
05 Editor’s Letter
06 Behind the Scenes Bikes, posters and lots of gatorade. Companies that kept the Montra Desert 500 Ultra Cycling Rally a step ahead
Deloitte’s manufacturing index bodes well for India A one-stop shop for your grocery needs A book that exposes “bullshit” The Inc. Data Bank: Why entrepreneurs fail at retirement A Skimmer’s Guide: The Org, by Ray Fisman and Tim Sullivan
13 Get Real
By Jason Fried Want to be a better communicator? Start treating people more like computers.
16 All Things People
By Hari TN CEOs must ensure they get feedback—it helps them stay real.
19 The Goods
Workplace Ergonomics: office staples to help you keep the right posture Creating a personal webpage: easier than you think Presentation Magic: Make an impact with these tools A new eye saviour for your screen-tired gaze Tech Trends: Networking tools for business trips
Guidebook, No. 12
Do you waste half of your company’s time in meetings? Here’s a low-down on how to hold productive meetings, following Page 22.
Strategy 47 Case study Why Ashok Soota’s idea to crowdsource his new company’s logo paid off 50 managing Don’t get trapped in having an office full of people “just like you”. Diversity pays dividends at the workplace. 54 elevator pitch Can BANGS Fried Chicken bite its way to a `30 crore investment?
56 the way i work Corporate banker-turned-entreprenuer Samit Ghosh has made sure Ujjivan Financial Services, his microfinance company is not plagued by opaque communication.
60 I Wish I Knew Then...
Neoteric Infomatique’s founder Paras H. Shah has learnt to keep his emotions in check when making professional decisions at work.
JANUARY 2013 | INC. | 3
Want to Be Happier? Stop Doing These Three Things Sometimes the route to happiness—both personal and professional— depends more on subtraction than on addition. Inc.com columnist Jeff Haden maintains that life is rosier once you cut out the following:
Top Videos on Inc.com
Taking responsibility when things go wrong instead of blaming others isn’t masochistic; it’s empowering. Doing so allows you to focus on being better or smarter next time. And when you get better or smarter, you also get happier.
Genuine relationships make you happier, but such relationships are formed only when you stop trying to impress other people and start being yourself.
Ben Lerer Co-founder and CEO of Thrillist, on the prospect of selling his company
“I realised I was living backwards. I was always focused on this day in the future, when I really should have been focused more on enjoying the process of building the business.”
Complaining about your problems makes you feel worse, not better. If something is wrong, don’t waste time whining. Put that effort into making the situation better.
Dan Porter CEO of game developer OMGPOP, on the decision to pivot
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get to work Want more insights from America’s fastest-growing job creators? Head to Inc.com for expanded features and additional Hire Power honourees by state, city, industry, and company size. Visit www.inc.com/hire-power.
“We had been in back-to-back meetings debating this change. At some point, a developer said to me, ‘Why don’t we just build it and see?’”
MANAGING DIRECTOR: Dr Pramath Raj Sinha Printer & Publisher: Anuradha Das Mathur Editorial managing Editor: shreyasi singh assistant editor: Sonal Khetarpal feature writer: ira swasti DEsign Sr. Creative Director: Jayan K Narayanan Sr. Art Director: Anil VK Associate Art Directors: Atul Deshmukh & Anil T Sr. Visualisers: Manav Sachdev & Shokeen Saifi Visualiser: NV Baiju Sr. Designers: Raj Kishore Verma Shigil Narayanan & Suneesh K Designers: Charu Dwivedi, Peterson PJ Midhun Mohan, Haridas Balan & PRADEEP g nair MARCOM Associate Art Director: Prasanth Ramakrishnan Designer: Rahul Babu STUDIO Chief Photographer: Subhojit Paul Sr. Photographer: Jiten Gandhi community team assistant product manager: Rajat gupta Sales & Marketing senior vice president: krishna kumar (+91 98102 06034) business development Manager: arjun sawhney (+91 95822 20507) assistant regional manager (south & WEST): rajesh kandari (+91 98111 40424) Production & Logistics Sr General manager (Operations): Shivshankar M Hiremath Manager Operations: Rakesh upadhyay Asst 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 For any queries, please contact us at email@example.com 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
The Optimism Fix An article I read a few days ago in Brain Pickings, possibly the finest source of curated content online,
has helped me deconstruct (for the moment, at least) the greatest of those riddles—optimism. In my line of work, I routinely encounter varieties of optimism among entrepreneurs—from cautious to congenital (to borrow a phrase from my publisher, Anuradha Das Mathur) to irrational. Though this month’s cover story—an entrepreneur’s wish list of issues the Indian economy must fix urgently—emerged in response to anxieties about growth, ambitions being revised downwards, and a feeling that zeal can only take you thus far (even among the can-do entrepreneurial cadre), the responses we received undoubtedly leaned on the entrepreneurial bias for optimism. After all, having the courage to offer ideas for not just saving but renewing India’s cities, as Printo’s Manish Sharma and Saraplast’s Rajeev Kher have done can’t but be seen as leaps of faith. As author Teli Sharot says in her recent book The Science of Optimism (the review of which I read on Brain Pickings), “To make progress, we need to be able to imagine alternative realities, and not just any old reality but a better one; and we need to believe we can achieve it.” Whodoes that better than entrepreneurs? In keeping with the optimism theme, we have picked a special feature from our US edition. It spotlights the trends and ideas to profit from in 2013. We hope you will find it useful reading. As always, we look forward to hearing from you. And, wish you a great year ahead. May it bring you many new opportunities, more sustainable profits and renewed determination!
Shreyasi Singh firstname.lastname@example.org
JANUARY 2013 | INC. | 5
BEHIND THE SCENES
Companies at the Heart of Everyday Life
Event concept and management Velo Sportive was incorporated in June 2012 with a mission to promote cycling and cyclists. It is founded by a team of thirteen cycling enthusiasts, each of whom have flourishing day careers. The Desert 500 rally was the company’s first event and the company claims that the November rally was the largest cycling rally ever in India with 160+ cyclists registered for it. Sponsored by TI cycles of India and Rajasthan Tourism, the company plans to hold many such events, at national and state level, by next year.
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Montra Desert 500 Ultra Cycling Rally
28.11.2012 10 A.M.
Branding Branding can kill, or make an event. All the colourful collaterals, signboards and posters for the Desert 500 were created and designed by Vibgyor, a Delhi-based marketing company. Founded in 2002 by Ankur Kalra, the `25crore company has a pan-India presence with offices in all major cities. The team of 75 employees has helped big names like Maruti, GSK, Maybelline, Pepsi, Samsung and many others create their brand story.
Clothing Wearing the right attire while cycling can help attain peak performance. The white jerseys with Desert 500 logos worn by participants were manufactured by Culture Clothing. Started by Vivek Seth in 1994, the `28-crore company offers a diverse range of fabrics from plain weave to spandex as well as special uniforms and customised apparel for the defence, medical and hospitality industries. The 700-people company also counts top brands such as Diesel, Armani, and DKNY among its clients.
photograph by Tara B Sanon
reported bY SOnal KheTARPAL
News. Ideas. People.
Eastwards Bound Deloitte report sets positive tone; says India and China next global manufacturing stalwarts
The landscape for competitive manufacturing is in the midst of
a massive power shift. Nations such as China, India and Brazil will surge and the manufacturing stalwarts—US, Germany and Japan—will be challenged to maintain their competitive edge, according to 2013 Global Manufacturing Competitiveness Index. The report was published jointly by Deloitte’s Global Manufacturing Industry group and the U.S. Council on Competitiveness on how CEOs view the competitiveness of the manufacturing industry in different countries around the world. A global survey of more than 550 CEOs and senior leaders at
manufacturing companies around the world was conducted. Top executives across the globe ranked 38 nations on 10 parameters— talent-driven innovation; economic, trade, financial and tax system; cost and availability of labour and materials; supplier network; legal and regulatory system; physical infrastructure; energy cost and policies; local market attractiveness; healthcare system; and government investments in manufacturing and innovation. The report found that access to talented workers is the top indicator of a country’s competitiveness—followed by a country’s trade, financial and tax system, and then the cost of labour and materials. january 2013 | INC. | 9
2013 Global Manufacturing Competitiveness Index The report ranks China as the GDP compared to 7-8 per cent in Current competitiventess Competitiveness in five years most competitive manufacturing developed countries. Index score Index score Rank Country name Rank Country name nation in the world both today, However, “India’s government 10=High 1=Low 10=High 1=Low and five years from now. Brazil is also enacting policy changes 1 China 10 1 China 10 will jump from its current eighth designed to improve the country’s 2 Germany 7.98 2 India 8.49 slot to third and India will move competitiveness in areas execuUnited States of 3 7.84 3 Brazil 7.89 America up from fourth to second place in tives noted as disadvantages”, the 4 India 7.65 4 Germany 7.82 five years. report said. India’s National ManRepublic of United States 5 7.59 5 7.69 Survey participants cited ufacturing Policy (NMP), aims to Korea of America Republic of India’s strong talent pool in the add 100 million jobs and increase 6 Taiwan 7.57 6 7.63 Korea areas of science, technology and the share of manufacturing in 7 Canada 7.24 7 Taiwan 7.18 research, and lowest labour rates India’s GDP from 15 per cent to 8 Brazil 7.13 8 Canada 6.99 in the world as significant com25 per cent by the year 2022. 9 Singapore 6.64 9 Singapore 6.64 This is precisely the reason petitive advantages that would 10 Japan 6.60 10 Vietnam 6.50 why India is ranked over United positively impact the country’s States, five years hence. “National ability to conduct cost-efficient research and development, when compared to other countries. Manufacturing Policy is more of a framework. What global In spite of India’s better positioning in five years from now, CEOs say is that at least you have a policy, though you haven’t the report mentions that India loses out on grounds of legal and enacted that yet. US does not even have a policy”, said Tim Hanregulatory framework, power supply and supplier networks. ley, DTTL Global Leader, Manufacturing. India needs to reform its archaic labour laws that make dismissal Though American region will continue to show significant of permanent labour a daunting task. To avoid this problem, manufacturing prowess—with the United States, Brazil, Canada manufacturers, particularly automobile companies, have been and Mexico all in the top 15 most competitive nations five years increasingly hiring contract labour, for half the rate of permafrom now—many advantages are tilting toward Asia, which will nent staff. But, wage disparity and absence of benefits, like medihave 10 of the top 15 most competitive nations within the cal benefits and pensions are causing discontent among contract decade.” notes Craig Giffi, vice chairman, Deloitte United States labour. Also, logistics cost in India is high at 13-14 per cent of and co-author of this report.
Newbie on the block
Say No to Grocery Woes
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In today’s fast-paced urban life, shopping for the very basic household items from various vendors, be it grocery from the kiranawala, vegetables from the sabziwala or toiletries from the supermarket, consumes unnecessary time and effort. Sumat Chopra started EkStop in July 2012, an online grocery store, that promises to put an end to all this. EkStop with its large inventory of essential items, personal care, health care and stationary products offers free home delivery, and does so within one to four hours of an order being placed. Also, shoppers have a variety of ways to place an order. They can dial in to EkStop’s helpline number, visit the website or just write out an e-mail. This choice is extended to several payment options too—cash on delivery, net banking, debit card or credit cards. An EkStop account also doubles up as a budget keeper, and advisor. The website provides customers with additional features at no extra cost—order history for record, expense management tool to analyse the money spent, save on future orders and a better access to various promotions. Currently only operational in Mumbai, EkStop has plans to expand to Delhi and Bangalore by mid 2012. —Sonal Khetarpal
Decoding Bullshit Why stock markets are not wealth generators, and regulations don’t lead to better business practices In his new book, Bullshit Quotient: Decoding India’s corporate, social and legal fineprint, corporate lawyer Ranjeev Dubey strips off some of the hypocrisy around Indian laws and procedures, and attempts to show things for what they really are. He hopes his exposé of how things actually work in India will help entrepreneurs and anybody else who needs to navigate this maze. In the process, he also advises business owners to drop some of the “bullshit” they, in turn, propagate as well. —Sonal Khetarpal
Close-up: Tim Ferriss
Food for Thought Tim Ferriss serves up an unusual cookbook—with a side of learning.
For his next act: dinner Ranjeev C. Dubey Author, Bullshit Quotient
Q: What are the biggest “bullshit” lines that entrepreneurs should be aware of?
A: Bullshit 1: Regulation secures better business practices That is laughably naïve. Regulation has two purposes: one, get the business on the radar wrapped in some morally righteous hoopla so that governments can evaluate the extortion potential of every business. Second, set up rules impossible to follow so that businesses can be forced to pay every time they are breached. Every businessman big or small, learns this very quickly. To survive in India, the trick is to have a very good sense of the “political cost” of doing a business. If you don’t know how to manage your regulatory environment and risk, you will be bankrupt pretty quickly. Bullshit 2: Stock markets are wealth generators That is big-ticket “bullshit”. Stock markets are an elaborate devise contrived by a clutch of industrialists, brokers and financial market intermediaries in order to defraud victims euphemistically called “small investors” into voluntarily transferring their wealth to those who run the market. The entire history of the stock market is a long history of institutionalised fraud and the fraud continues today. Bullshit 3: Companies are here to deliver value to customers Companies are here to make money for their owners, that includes all enterprises whether its hospitals or banks or educational institutions. Hospitals are certainly not here to restore your health, high-end brands are not here to provide you with a superior product, and bankers are not here to help budding entrepreneurs fulfill their dreams. If you can see this, you will change both your behaviour pattern and your expectation matrix. Indeed, you could conceivably also reposition your product to take advantage of the natural propensity of many consumers to swallow this “bullshit”. Q: Why should an entrepreneur read your Bullshit Quotient? A: To make any money at all, you have to understand where the opportunities are,
and for that you have to understand how things work. Bullshit Quotient attempts to explain how India works to Indians. Most Indians know most of this in bits and pieces. Bullshit Quotient sets out to connect the dots and give you a complete picture. I would think that someone who has connected the dots will change the way he runs his business.
Anyone can become a fast learner, says Tim Ferriss. The author of The 4-Hour Workweek and The 4-Hour Body, Ferriss spent the past year and a half researching ways to reduce the time it takes to master a new skill. The results are in his new book, The 4-Hour Chef. Though The 4-Hour Chef is essentially a cookbook, Ferriss says it’s really about learning. “I chose the skill I found to be the most intimidating,” he says, “which was cooking.” In the 672page book, Ferriss chronicles his learning process as he digs into the basics of food—as well as offbeat topics such as molecular gastronomy, outdoor survival and competitive eating. Ferriss interviewed hundreds of people, including Jeffrey Zurofsky, the co-founder of ’wichcraft restaurants in New York City, and Ed Cooke, a world memory champion. Among recipes for gazpacho and roast chicken, Ferriss lays out the guide to learning, which includes dividing things into manageable chunks and creating real consequences for not meeting goals. “I strongly believe if people read this and absorb it,” he says, “they’ll be able to cut the time to acquire any new skill by at least 50 per cent.” —Issie Lapowsky january 2013 | INC. | 11
inc. data bank
A skimmer’s guide to the latest business books The book: The Org: The Under lying Logic of the Office, by Ray Fisman and Tim Sullivan.
67% of small-business owners
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say most of their retirement nest eggs are tied to their companies.
By contrast, 38% of Americans say they aren’t confident they will have enough income to last through their retirement years.
source: The Wall Street Journal/Vistage International
Other popular ways business owners plan to pay for retirement:
76% will use savings and investments in stocks, bonds and mutual funds
76% will use Social Security 41% will use real estate investments source: THE Guardian Life Small Business Research Institute
sources: gallup; pew research center
Since the recession, many entrepreneurs have dramatically pushed back their retirement plans. Portion of the population that plans to retire at 65 or older
However, for many entrepreneurs, the idea of quitting isn’t desirable, no matter how much they have saved. If money were no object:
51% would continue working full
or part time in their business
28% would retire completely 18% would start another business source: Gallup
41% small-business owners most americans
2005 source: gallup
of small-business owners say they will retire after age 70.
“Counting on your company exposes your retirement to a lot of business risks when you may be least willing or least able to take them.” Nevin Adams Co-Director of EBRI Center for Research on Retirement Income
source: The Guardian Life Small Business Research Institute
—Compiled by Maeghan Ouimet
ADAMS: COURTESY SUBJECT; BOOK: Kelly kollar; OTHERS: PHOTOS.COM
Rigour rating: 8 (1=Who Moved My Cheese?; 10=Good to Great). The Org effortlessly blends the history of management theory with current best practices. Though the authors cite mostly secondary sources, they display a comprehensive grasp of academic literature and the popular business press. —Leigh Buchanan
56% of small-
worry they won’t be able to put enough money away for retirement.
The backstory: Fisman is a professor of social enterprise at Columbia Business School. His last book, Economic Gangsters, was about the corruption that prevents economic aid from reaching the world’s poor. If you read nothing else: Chapter Five wipes some of the luster from creative types while polishing the reputations of the much-maligned suits who oversee them. Among other cases, it cites a study of videogame companies that attribute far more revenue to the work of project managers than designers. Chapter Six reassures leaders that their meetingpacked schedules are good for the company, because that’s where CEOs gather information and cut through the spin that managers embed in one-onone conversations and reports.
Entrepreneurs say their companies often account for a big chunk of their retirement funds.
Having enough money to retire is a big concern for entrepreneurs.
The big idea: Organisations work the way they do for a reason. Accepted signifiers of office dysfunction, such as endless meetings and rigid policies, are often the result of necessary tradeoffs between such factors as innovation and coordination. Understanding those tradeoffs can help leaders make decisions as their companies scale.
Entrepreneurs are great at starting things. Planning for the end? Not so much. With most of their savings invested in their companies, many small-business owners are worried about having enough to retire. Some are being forced to postpone retirement because of the economy. But many others say they aren’t interested in retiring soon—or ever.
Jason Fried is co-founder of 37signals, a Chicago-based software company. He is a man, not a machine.
Zeros and Ones Here’s one way to be a better communicator: Start treating people more like computers Last month, I mentioned that I’ve been taking a class in Ruby on Rails, a programming framework that powers tens of thousands of websites worldwide. Why go back to school? A couple of reasons. First, I want to be a better co-worker. I’m a designer, but I rely on programmers to bring my ideas to life. By learning to code myself, I think I can make things easier for all of us. Similarly, I want to be able to build things on my own, without having to bother a programmer. I have no doubt that I’ll be able to accomplish both, once I get better at Ruby. But the course has already changed me in ways I never would have expected: Learning to program a computer is teaching me how to be a better communicator. I didn’t see that coming. We think of computers as smart and powerful machines. But your goldfish is smarter. Unlike a goldfish, a computer can’t really do anything without you telling it exactly what you want it to do. A computer doesn’t have a mind of its own—it needs someone else’s to function. Programming requires you to break things down to their absolute essence before building them back up again. For example, if you wanted a computer to make a sandwich for you, first you’d have to explain what a sandwich is (and maybe what it isn’t), what ingredients go into a sandwich (and maybe which ones don’t), how to assemble it, and every other little sandwich-related thing. When programming a computer, you can’t assume a whole lot. It knows next to nothing. Learning to program is a humbling experience. It forces you to see how well you actually understand things in the real world. Do I really know sandwiches well enough to explain them to someone (or, in the case of a computer, something) who has never heard of them? Yeah, probably. But what about more complicated things? illustration by laurent cilluffo
Once you start thinking this way, you realize how much you assume. It’s easy to convince yourself you know something until you have to explain it to someone else. Then the truth comes out. Learning how to program has taught me that I need to explain things more clearly—and not only to machines. I used to assume a lot and rush through things. But now, when I describe something new to someone, I find myself slowing down, breaking the idea down in my mind and explaining it piece by piece. I’d rather be asked to speed up than risk going too fast and skipping over the fundamentals that really matter. For example, just yesterday, I was telling someone where I lived in Chicago. I said “Wicker Park,” and I figured he knew where that was. He was polite, so he didn’t stop me, but I could tell by his face that Wicker Park didn’t mean anything to him. So I stepped back, slowed down, and explained where Wicker Park was in relation to somewhere else he knew in Chicago. Now it made sense. The example may seem trivial, but if I wasn’t learning to program, I doubt I would have had the selfawareness to slow down. I can see this helping me all over the place. Let’s say I’m trying to explain Basecamp, our project-management software, to a new customer. It’s so easy to assume this person knows what project management is. But maybe she doesn’t. Or maybe she has a different understanding of what project management means. Who knows? But I do know that if I assume nothing—ironically, if I approach her not as a human being but as a computer—I’ll have a better shot at making a clear and deep connection. And in business, nothing matters more than that. Follow Jason Fried on Twitter: @jasonfried. January 2013 | INC. | 13
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Cooking conveniently No need to process fuel Ideally suited for all kinds of biomass fuel—cow dung, agro-waste, wood, charcoal Used for all kinds of cooking, including baking and frying Supports small and large vessels with loading capacity of up to 25 kgs Ergonomic design and handles Easily portable
Going green 85% less smoke 65% fuel savings Minimises harmful emissions of CO, CO2 and particulate matter Tested and certified by Ministry of New and Renewable Energy (MNRE), Government of India
Laurels received Grand Prize at the Intel Global Challenge, University of California, Berkeley (2012) The Women Impact Award by the Sankalp Forum-Samridhi Regional Summit (2012)
—Neha Juneja, co-founder and CEO, Greenway Grameen Infra
“This stove has been named Sudha by some of the users who helped us design it.”
innovation Companies on the Cutting Edge
Only 28.6 per cent of households in India have access to LPG for cooking; a majority of those are concentrated in urban centres, in fact. With the dearth of efficient biomass stoves in the market, non-LPG based cleaner cooking alternatives were imperative to solve this everyday problem of smoky unhealthy kitchens. Enter, the Greenway Smart Stove, an eco-friendly replacement for traditional mud stoves, and the first product of Greenway Grameen Infra, a Mumbai-based start up catering to rural needs through innovative products. The main innovation behind Smart Stove is simple, and it comes from the use of the lampshade-shaped reducer cone (patent pending). What this does is induce air flow in the stove for a nearly-complete combustion. The design team, consisting of Shoeb Kazi, Ankit Mathur and Neha Juneja, travelled for 12 months across five states in India as they developed the product. These interactions with actual users gave way to much of the design features. Even as the Smart Stoveâ€”priced at `1,250â€”awaits patent, Grameen Infra claims it has got a good market response. Launched in December 2011, the team aims to sell 50,000 units by end of this financial year.
Stoving the green way
Greenway Smart Stove
photograph by subhojit paul
Greenway Grameen Infra
reported by sonal khetarpal
All Things People BY
Hari TN is the global head of human resources at Amba Research, a Bangalore-based investment research outsourcing firm.
The feedback loop CEOs are often isolated from reality at the workplace. Smart leaders then must do a lot of listening to keep in touch It’s often said that a CEO is
the loneliest person in any organisation. Natural forces at the workplace often tend to isolate her from reality. Of course, the reasons are not very hard to fathom—few people dare to tell her the unadulterated version of the truth, and even fewer are their natural self in her presence. Almost everyone is posing, and almost everyone would like to sense which side she is leaning towards in any situation before volunteering to share their thoughts. There are very few people she can speak to openly in her organisation, and seek advice or feedback from. Therefore, it’s only natural for a CEO to be unaware of her own failings. Worryingly, these forces are extremely strong and a good CEO needs to fight to prevent her eventual isolation. Doing this involves taking some tough calls—valuing the bearers of bad news, avoiding those who say what they think you wish to hear, listening to unpleasant things about yourself, taking off all your masks to make yourself vulnerable, and really implement some fundamental personal changes. And all of these rest on getting regular, candid and insightful feedback from employees.
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How to get started: But, even if a CEO
wants to go ahead and get feedback, how should one go about it? What do you need to do to receive honest feedback, and build a work culture that encourages this repeatedly? Well, it’s a matter of both style as well as specific actions. Firstly, a CEO must communicate both through her body language and verbal responses that she welcomes both positive and negative feedback. Otherwise, most employees and team members end up saying what you want to hear. For obvious reasons, they become bearers of “good news”. Instead, you need to encourage people to bring “bad news” too. If not, over a period of time, CEOs become
surrounded by a clique, which eventually leads to their completely isolation from reality. Just the right body language when receiving feedback isn’t sufficient though. On getting feedback, it’s important to act on it, and go back to the person who provided it to see whether he or she sees a tangible difference. It’s also useful to share the feedback received with the rest of your team because nothing demonstrates seriousness of purpose, and the willingness and courage to receive and act on it more. Actually, this is the most important part of the feedback loop. It demonstrates you are willing to be vulnerable. Ironically, the act of becoming vulnerable actually strengthens your acceptance as a leader. illustration by MANAV SACHDEV
ALL THINGS PEOPLE
Why this isn’t easy to do: It’s useful to
understand the underlying reasons why feedback isn’t usually sought. Often, it’s because when the roles of feedback reverse, many CEOs think—how can we seek feedback from a reportee? Does, or can this undermine my authority and ability to take hard decisions? Sometimes, of course, we just don’t want feedback because of the fear of receiving negative feedback. This becomes even trickier when the feedback is on an aspect that is fundamental to one’s personal nature. There is also a notion that because a CEO’s job is to hold people accountable and take tough decisions, junior colleagues and other team members will always view them negatively. The view is that a biased feedback is hardly useful. But, all these fears are completely misplaced. Strong bosses recognise this quickly; weaker ones might take longer. For one, good leaders can manage dichotomy—they can provide difficult feedback to their colleagues in the morning but follow it up the same evening with a friendly chat over a cup of coffee. Average leaders cannot manage this switch—they find it difficult to isolate issues and deal with two totally different issues with equally different approaches. Yet, the ability to switch styles based on the issue at hand is one of the clearest indicators of leadership, maturity and sophistication. More importantly, feedback is critical because people prefer leaders who try to make fundamental changes over someone who avoids feedback at the cost of staying blind to their flaws. Leaders who are open and make a serious attempt at trying to change are respected. The paradox is why do they then not recognise this and seek feedback? The simple answer is that average leaders feel very threatened by the imagined pain of making the change, and a possibility of failing to make the change. It is the fear of failure and/or adverse feedback, common in weak leaders, that comes in the way of taking feedback. From several years of implementing feedback processes, I’ve found this is a big misconception. Your team members aren’t really out to “screw you”. In my experience, feedback on average is often balanced and mirrors reality.
It is the fear of failure among weak leaders that comes in the way of taking feedback. But your team members aren’t really out to “screw you”. Feedback on average is balanced and mirrors reality. Of course, there might be a disgruntled individual, or two, who responds with personal bias. But, usually, this is rare. And, good leaders don’t suffer from the anxiety of this happening. For other CEOS who do, an executive coach from outside her company would be helpful in overcoming those fears. It would help if a CEO is assigned a coach by the Board, for example. The HR head could also play the role of a coach, but a professional coach or a Board member would be far more effective. Once over the hesitation to do so, who should you seek feedback from? Typically, key stakeholders—Board members, direct reports, key customers and industry bodies (if the role involves extensive external interactions)—are a good place to begin with. Do make sure that feedback is both formal and informal. Formal feedback is best gathered by a professional and independent third party. Yes, this costs money but it is very effective. If HR (or any other internal function) is tasked with gathering the feedback, then the feedback is likely to be sugarcoated. That is because very few employees believe that this kind of feedback will be kept confidential, and hence don’t take the risk of being candid. Why it is so important for business: A recent research conducted by IBM has shown that a CEO impacts the organisation’s climate (culture) to the tune of 80 per cent. In turn, an organisation’s climate can swing business results to the extent of 30 per cent. This may be intuitive to some but not so obvious to others. If intuition does not work, at least this research proves that a CEO’s skills and style (whether it is about people, decision-making or understanding
strategic issues) play a very important role in driving business results. Improvement to the CEO’s skills and style therefore becomes a business need. Without feedback, she may be inadvertently doing something dysfunctional that isn’t good for business—either delegating too much, being too hands-on, neglecting the big picture or overemphasising the long-term vision to the detriment of execution. CEOs need to be aware of the impact of their actions and opinions. I’ve been amazed to see how decisions are sometimes made in executive team meetings. The decisions might seem consensual but they have been built on limited debate, and often even senior team members air views that they guess the CEO is anyway leaning towards. Ideally, a CEO’s involvement in shaping decisions must be in careful balance—neither excessive nor remote. A good CEO needs to perfect the art of balancing delegation versus a hands-on approach based on the situation. Interestingly, one of the most researched cases in history on how a leader participates in decision making is probably the contrasting styles President John F Kennedy adopted in two of the most serious crises during his presidency, namely, the Bay of Pigs crisis and the Cuban Missile crisis. While the former ended in total disaster, the latter was a huge success. Kennedy had learnt from his failure. Some of the simple changes he made in the second crisis were to deliberately stay away from the initial discussions, asking for arguments for all the options and having people play the role of a devil’s advocate. Contact Hari TN at email@example.com. JANUARY 2013 | INC. | 17
Your Business Toolbox
Workplace Ergonomics Posture right with these office staples More often than not, a good posture is the first thing to be ignored in
the turbulence of deadlines and tasks at a busy workplace. Most people only notice something’s wrong when their victimised joints threaten to give in. But you can avoid the pain of creaky joints and the subsequent expensive treatments by making your posture a priority. Here’s a list of office essentials—all ergonomically designed—to keep your employees’ posture perfect. —Sonal Khetarpal
Matias iRizer Notebook Stand
This ultra-slim, height-adjustable notebook stand helps prevent neck and wrist pain, so common among laptop users. With four height and angle variations, it can be used at home, in the office or even while travelling. The sleek, interlocking design fits virtually any laptop. Designed to hold the weight of a laptop, the iRizer makes a solid stand for an iPad as well. Stacked together, the iRizer’s two slim acrylic plates are only 14mm thick and can easily fit into a notebook bag. It comes in a box with a MiniRizer stand for small gadgets, carrying sleeves and an instruction card. cost: `3470
Microsoft Natural Ergonomic Keyboard 4000
This ergonomic keyboard is designed to provide a natural angle to the hand and wrist. An integrated palm rest with a plush cushioned surface provides that extra support. The keyboard, with dimensions of 503 x 262 x 82.8 mm, has 107 keys with several hot keys for Windows and internet shortcuts. A zoom slider, located in its centre, can be used to zoom in and out of documents and webpages. The minimum system requirements to install this keyboard are a computer with a USB port, Windows or Mac OS, CD-ROM drive and 60 MB of hard disk space. It comes with a three year limited warranty, and is available in black and grey. cost: `3482
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Verbatim Wireless Desktop Ergo Optical Mouse
This Wireless Desktop Optical Mouse features a modern design with a convenient thumb support. Its smooth, rubberised grip gives more control for easier navigation. Available with a nano receiver, the mouse can be used wirelessly with 2.4 GHz reliability and performance. The nano receiver is small enough to plug in and left connected which makes it easier to use while travelling. Available in black, red and blue. cost: `2784
Transval Ortho Back Buddy Standard
Back Buddy is an anatomically designed backrest that helps the body to maintain its proper angle—little above 90 degrees—thus reducing the stress on the spine and lower back. Made from a special energy-absorbing foam, it includes an in-built tempered wire spring frame and an anatomically designed cushion, which provides postural correction by reproducing the curve of the lower back. Easily portable and adjustable with the help of heavyduty elastic and buckle, it can be fitted on to any chair, sofa or car seat. Back Buddy has undergone extensive trial with the Indian Air Force, and is endorsed by them. cost: `2580 january 2013 | INC. | 19
Products + Services
How I use Small Improvements to review employees
rob castaneda founder and ceo customware palo alto, california
Have you tried a new product or service that helps you run your business? Head to www.inc.com/thegoods and tell us about it.
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Your Online Bio, Supercharged Create a personal webpage Chances are good that your bio on the company website includes little more than a head-
shot, title and career history. A new breed of service lets you create personal webpages that encompass your entire online life. Then you can include the link in your e-mail signature. Here are three options to suit different needs. —Jennifer Alsever the look: collage rebelmouse
This service lets you create a Pinterest-style front page for your social-media posts. Link RSS feeds and socialmedia accounts, including Facebook and Twitter (sorry, no LinkedIn). After a few minutes, a page pops up displaying your posts, which are updated in real time, along with your bio and photo from Twitter. cost: Free for a basic account, then starting at $3 a month for premium features
the look: photo driven About.me
A simpler option, About.me lets you design a one-page site with a photo, bio and buttons that link to your accounts on Facebook, Flickr, LinkedIn and other social networks. You can upload a photo or choose from 21 stock images of scenic locales. You can also customise colours and fonts. Then, you can see how many people visit, where they come from, and what they click on. cost: Free
the look: infographic Vizify
Vizify aggregates information from your social-media accounts, including posts, photos and your career history. Then, it creates a homepage filled with bubbles that present the information in infographic form (click on a bubble for more information). You can change the colour scheme, add your own background photo, or choose from a gallery of images. You can also track site traffic. cost: Free
from left: courtesy subject ; courtesy compa ny (3)
I run a training and support company for fast-growing software companies. We have 105 employees across the United States, Australia, Malaysia, and Europe, so conducting employee reviews isn’t easy. Last January, we started using a web-based system called Small Improvements to help manage the task. Our employees log on to the Small Improvements dashboard each month (or each week for new employees) to complete self-evaluations containing questions created by managers. Employees can view past reviews and objectives and submit their evaluations right on the dashboard. Managers can read evaluations and past objectives, submit performance reviews, and create a new set of goals. Another great feature? Throughout the year, employees can log on to Small Improvements to praise co-workers for a job well done. Our management team takes that feedback into consideration during the review process. We pay $5 a month per employee for our subscription. It has made a big difference, especially for some of our quiet achievers, who are more humble in their self-evaluations. Now, we’re also much better at appraising employees on the basis of their performance throughout the year. —As told to Matthew Wong
Products + Services
The World Is Your Stage Killer tools for making presentations on the go Your conference room may be outfitted for making top-notch presentations, but how about your briefcase? These
days, neither customers nor investors have patience for subpar slide shows. Here are four tools that will help you make stellar presentations anywhere you go. —Adam Baer
Epson PowerLite 1761W WXGA 3LCD Projector
Make cinemaworthy presentations with this portable, 3.7-pound LCD projector, which boasts 2,600 lumens of brightness and 720p resolution, comparable to that of a high-definition television. The short-throw projector sits right next to a screen, making it ideal for a variety of rooms. You can present wirelessly from a laptop, iPhone, iPad, or Android device over a Wi-Fi network using Epson’s iProjection app. cost: $700
Targus Ultralife WIreless Mouse and Presenter
Use this two-in-one device as a wireless mouse for controlling a cursor. Then, twist the top portion to reveal presentation controls, including buttons for paging up and down and switching to a blank screen. The 5.4ounce Ultralife, which works with PCs and Macs, has at 1,200-dots-per-inch laser sensor for precise cursor control and works from up to 30 feet away in presentation mode. cost: $89.99
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This app lets you view and present PowerPoint slide shows using your iPad, iPhone, or iPod Touch, without compromising animations and graphics. You can store presentations in an online SlideShark account and connect your tablet or smartphone to a projector to display presentations. You can also beam slide shows to mobile devices in the audience and track views. cost: Free for 100MB of storage, then starting at $49 a year for 600MB of storage
Jabra Solemate speaker
If your slide show includes sound, laptop speakers won’t do. Turn up the volume with this rugged portable speaker, which connects wirelessly with any Bluetooth device, including laptops, tablets, and smartphones. The brick-size, 1.3pound Solemate, which comes in black or white, has three front speakers and an integrated subwoofer for deep bass. The battery lasts eight hours fully charged. cost: $200 january 2013 | INC. | 2 1
tech trends john brandon
Networking on the Road Social tools for business trips
Business trips can be great networking
opportunities. But when I travel for work, I wind up spending most of my downtime alone. Recently, I tested two new services, Startup Stay and Here on Biz, created to help road warriors network more effectively—and maybe even snag a free place to crash. Startup Stay is an online community that lets entrepreneurs connect with other company owners willing to host them on business trips. Launched in June, the site has 5,000 members in hundreds of cities worldwide, including New York and Barcelona. Before a recent trip to the Bay Area, I registered for the free service and did a search for San Francisco. Up popped thumbnail photos of 175 local entrepreneurs, along with links to their LinkedIn profiles, references and lodging details. I sent requests to 25 members and, after a day, Anthony Krumeich, co-creator of the event-planning app Bloodhound, offered me a spot on his futon. I was a bit apprehensive as I drove from the San Francisco airport to my host’s gated apartment complex in the trendy SoMa district. My fears dissipated when I hit the buzzer and my smiling host met me at the door. Krumeich gave me a tour of the apartment, which doubles as the headquarters for his 11-person start-up, and we chatted for a couple of hours. When he showed me to my bed—a futon in the corner of the communal space—I realised it wasn’t large enough for my 6-foot-2 frame and checked in to a hotel. The next morning, however, I returned to meet Krumeich’s staff and spend the day with him at a tech conference. During the same trip, I also tried Here on Biz, a free app for iPhones and iPads that lets you chat with nearby LinkedIn members, including those in your network. The app, which launched this summer, has about 6,000 members. I fired it up on my iPad at the Minneapolis
2 2 | INC. | january 2013
airport, and a list of 30 professionals appeared. Because no one was in the immediate vicinity, the app widened the search radius to include the entire city. I sent connection requests to about 15 people. When I landed in San Francisco,
“My fears dissipated when I hit the buzzer and my smiling host met me at the door.” I was disappointed to see no one had accepted. The next day, I opened the app at the conference and sent requests to 30 people, but, once again, no one accepted. Back home, I finally chatted with one Here on Biz member—the founder of a marketing firm in Eagan, Minnesota. Overall, I was disappointed with Here on Biz, but, like many social networks, it could prove useful as more people sign up. On the other hand, I was pleasantly surprised by my Startup Stay experience. If you’re like me, you might not love the accommodations, but you could make a valuable business contact.
Handle tired eyes the glassy way
With more people spending most of their time staring at computer monitors or digital screens, it is the eyes that are the worst victims. With cases of Computer Vision Syndrome only slated to rise, GUNNAR Optiks, recently launched its range of computer eyewear in India. With a trademarked secret recipe called i-AMP lens technology, GUNNAR Optiks claims to protect the eyes from excessive glare from digital screens, enhance the contrast for better viewing, therefore exorcising the visual demons of staring at the digital screen at short distance for too long. GUNNAR Optiks has a partnership programme with Carl Zeiss Vision for custom-made prescription eyewear for people who have mildly impaired vision and have to wear lenses or spectacles. Apart from a wide array of eyewear products GUNNAR Optiks offers, the ones that make sense for PC users and gamers is its Professional and Gaming range, respectively. Even though we didn’t test them for the purpose of a review, we have been using SteelSeries (SS) Scope ambertinted gaming eyewear and Wi-Five Crystalline computer eyewear for over a month. Both glasses are quite light and sit close to the eye, reducing incoming glare and relaxing the eye, especially the SS Scope amber-tinting gaming eyewear. These specialty eyewear sell at a premium—both the glasses mentioned above cost `5,500 each. While this price seems to be expensive, it’s relatively cheaper compared to US prices. —www.thinkdigit.com
Everything you need to know to run your business in today’s economy
: : : : : : : : : : : A monthly guide to policies, procedures and practices
Remove booklet along dotted Line
Hold Productive Meetings Great leaders share a common trait—a respect for time. At the workplace, there are several competing demands on a CEO’s time. Not surprisingly, often, a long line of meetings take up the lion’s share. But, smart managers carefully weigh the costs of holding meetings. A necessary evil as they might be, meetings also interrupt the flow of work. Meetings that aren’t called for the right reasons, or don’t have an objective laid out, stand the risk of turning into energy draining mind-numbing babble sessions that serve little purpose. According to Mike Myatt, chief strategy officer, N2growth, a leadership development & advisory firm, 80 per cent of meetings possibly never needed to take place. David Allen, productivity consultant and author of Getting Things Done, says one of the greatest blocks to organisational productivity is the lack of decision by a senior person about the necessity of a meeting and with whom to move an important issue forward. “You’ve got to run a tight ship to produce real results,” advises K. Jayshankar, managing director, Empowered Learning Systems. Read on to learn how to hold meetings that aren’t tagged as the biggest time wasters in your company. —Charu Bahri
Vol. 03 No. 12 | inc. guidebook
hold productive meetings : : : : : : : : : : : : :
Set it up well Establish clear objectives: Meetings are held to accomplish tasks such as finding solutions to problems, defining strategies, and so on. This can only happen if clear reasons and objectives are spelt out ahead of the meeting. For instance, meetings to share updates waste valuable office time. Circulate news through an e-mail instead. “Meetings held to build consensus because people get upset if they aren’t consulted prior to decision-making aren’t justifiable either,” adds Jayshankar. Create a culture where meetings are an exception, not the rule. After setting the deliverables for a meeting, pre-circulate the agenda and background reading material, and emphasise that invitees come prepared. “An agenda that is too long is a no-no,” cautions Gaurav Lahiri, managing director, Hay Group India. Propose that agenda items concerning only a few attendees be covered via e-mail or in a separate smaller meeting. Schedule well: Choose an appropriate time for the meeting, when attendees are most productive and the least hassled with other matters. Take your cue from the online meeting scheduling service When is Good. It has analysed over 1,00,000 responses to 34,000 events on its platform and found that “Tuesday, 3pm” is the most “available” meeting slot. A good practice is to check the attendees’ availability before sending out the final invite. State the meeting start and end time clearly on invitations, keeping the duration as short as is possible, and stick to these timings even if some attendees show up late. In fact, fining late-comers can help change future behaviour. inc. guidebook | Vol. 03 No. 12
Invite right: Ken Segall is the person behind the ‘i’ in iMac and a key member of Steve Jobs’ creative team for over a decade. In Meetings Are A Skill You Can Master, And Steve Jobs Taught Me How, he describes how Jobs would ask you to leave a meeting if you had nothing to contribute. At Apple, there’s no such thing as mercy invitations for meetings. Meeting groups are kept small and consist of the smartest brains whose opinions really matter and who can contribute to resolving the issue at hand. The premise is that smaller
Create an office culture where meetings are an exception, not the rule. groups are more focused and motivated. Also, smarter people work faster and better, and are less likely to detract from the issue at hand. Essentially, Jobs believed that increasing the number of attendees is akin to inviting complexity to take a seat at the table. Only shareholder’s meetings, organisational (department, division, or company wide) gatherings and special events justify a huge number of participants. Ideally, restrict attendance to just 10 people.
Steer well: Poorly facilitated meetings seldom yield desired results. A leader’s role in a meeting is absolutely vital— “not to dictate pre-conceived solutions to the gathering but to set the tone and steer the proceedings towards a defini-
tive decision,” advises Jayshankar. George David Kieffer, author of The Strategy of Meetings, describes the skill to manage a meeting as perhaps the most critical asset in any career. Yet, most managers have never been trained to develop ideas, to motivate people and to move people and ideas to positive action. Since best outcomes come from non-intimidating, professional settings, start with a few light moments to help people establish a rapport. Asking “Why are we here?” is a good way to get down to business. Then, steer the proceedings towards resolving the agenda items. “Make it a point to hear everyone’s opinions and address their concerns. A special effort can help draw out shy people. Prepare well for this,” says Meeta Wasan, founder director of Doon Consulting, a management consultancy. In order to keep the discussion tightly focused on the agenda, the leader will strictly keep to the time allotted for each topic. If need be, use phrases like “Let’s move on” or “My next topic is...” to change the subject and politely discourage discussions about irrelevant side issues. Build consensus: Strong leaders seek the right outcome regardless of their own gut feeling and in spite of dissenting opinions. “For this, a leader must understand the audience and find common ground between differing ideas that must converge,” says Jayshankar. Throwing in some banter and keeping the conversation light helps build consensus over sensitive issues. Developing skills to make a permanent impression on people is useful. Author Helio Fred Garcia, executive director of the Logos Institute for Crisis Management and Executive Leader-
ship, cites emotion as the key to moving hearts and minds in a meeting. Use anecdotes to establish an emotional connection with your audience. “It also really helps to address each member on a personal level at some point during the meeting,” adds Wasan. And, listen closely to others’ opinions to get them to listen to you.
“he said, she said” documentation that goes nowhere.” He recommends that minutes list each subject discussed, the decision taken, the principal person made responsible for executing that action and the timeline for that to happen. Minutes are best circulated within 24 hours of the meeting.
Recap and document: A good practice is to make someone quickly recap the action steps at the end of a meeting. Or, ask each person to state the action items that they are responsible for. This exercise helps show up actionables that have been missed and breeds a sense of accountability. For the best outcomes, Jayshankar proposes writing down the minutes as “a clear call to action, not as
Companies that have great meetings work on improving the way they are conducted. For instance, every new employee at Intel is put through a course on effective meetings. According to Michael Fors, corporate training manager at Intel University, Intel’s training programme also talks a lot about meeting discipline. Conference rooms in Intel offices bear a poster on the wall to
Assess and evaluate
nudge attendees to meet right. It says: Do you know the purpose of this meeting? Do you have an agenda? Do you know your role? In this context, Lahiri proposes giving some importance to norms of conduct during meetings. “Create a document that informs employees what must always be done and what must never be done during meetings.” Critical post-meeting analyses of a few important gatherings can help as well. Determine what went right, what misfired, whether the right people were in attendance and if they came prepared and whether the deliverables were met. Use the insights so gathered to improve future meetings. Then, you can look forward to creative exchanges of ideas that contribute to the all-round growth of your employees.
hold productive meetings : : : : : : : : : : : : :
Tips to hold productive and memorable meetings A few tips to get more value from your meetings: Location: Don’t hold meetings off-site unless it’s absolutely necessary. Off-
site meetings are more expensive to organise and to attend. Instead, establish rules to ensure that office meetings can proceed uninterrupted unless something urgent comes up (define “emergency”). Meet standing: In The No Asshole Rule, author and Stanford professor Bob
Sutton says that standing meetings take 34 per cent less time to make an assigned decision than meetings where attendees are seated. And, the quality of decisions made in both sorts of meetings is comparable. Appar ently, sitting back encourages commentating instead of content-making. So, gather people around a focal point (you, the leader) and get them discussing the matter while standing. reate break-out groups: A good way to handle large gatherings is to create C smaller working groups. This keeps the situation less formal, and encour ages participants to share their great ideas. It also helps maximise the value of time. Open the meeting with a brief introduction before you create break- out groups to discuss different agenda items. Then, let the leader of each working group summarise her position and build consensus from the rest to conclude that point.
Scheduling tips A few tips for scheduling meetings: Schedule breaks: When you plan marathon all-day meetings, schedule 10 minute breaks for people to stretch their legs and check their e-mail and phones. Otherwise, attendees get distracted by thoughts about messages piling up for a response. Plan ahead: Avoid impromptu meetings unless it’s urgent. Then, wrap things up in 10 minutes or less. Essentially, subjects that are worth addressing are worth planning for. Establish conditions: Establish rules for cancelling conditional meetings, such as if only a certain number of people can attend or if key contributors can’t be in attendance etc. Build in travel time: Build in a few minutes of travel time to reduce stress. For instance, when you schedule an hour long meeting, inform invitees that they have five minutes to reach the venue and settle down. This is especially useful if you work in a large organisation occupying an entire building.
Resources Learn more from Al Pittampalli’s Read This Before Our Next Meeting,
Glean insights from Meetings Are A Skill You Can Master, And Steve Jobs Taught Me How by Ken Segall,
Read about what you shouldn’t say in a meeting, http://www.happiness-project.com/happiness_project/2008/04/ this-wednesda-2/
inc. guidebook | Vol. 03 No. 12
FOGGED OUT BY THE CLOUD? PETER COCHRANE WILL GIVE YOU A CLEARER VIEW Inflexion Convex 2013: Cloud… the easy next step The Inflexion Conference/Expo will help you:
• Determine the next steps needed to leverage the capabilities of cloud computing • Choose and implement the most effective cloud solutions • Mitigate the risks associated with the implementation of ‘Cloud’ Inflexion will include buyers' meets, workshops and an innovative immersive cloud café
Peter Cochrane One of the world's most respected and sought-after experts on technology, change and the future effects of change on corporations and individuals
Who will be there: Over 700 of India’s enterprise CIO/IT community, CXOs, LoB Heads, Government officials, over two days. Date: REGISTER February 18 - 19, 2013 www.inflexionconvex.in Venue: India Habitat Centre, Lodhi Rd, New Delhi
Solar Power Encourage FDI Medical Tourism
Faster Policy Implementation
Creating an Ecosystem
Ease of Doing Business
Despite the din of cynicism and a range of plummeting economic indicators, there is something about new beginnings (and a new year) that kickstarts the wheels of optimism. And, when it comes to optimism, entrepreneurs can put out quite a show. The ability to spur ahead despite all odds (and, often precisely because of it), and continue to hope for healthier balance sheets and growing profits is a key entrepreneurial trait. In this special story—a fix-it for the year ahead—Inc. India gets 13 company founders to put forth their wish list for a brighter future.
2013 As told to SHREYASI SINGH
Design by Anil VK
january 2013 | INC. | 2 5
13 fixes for 2013
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13 fixes for 2013
Create an Indian Teaching Services
he government of India has been offering a lot of freebies and incentives to encourage a higher literacy rate. However, all the efforts made by the government revolve mostly around providing children a carrot to come to school. But, for children to really get educated, it’s not enough to make them reach the school’s doorstep. What happens inside school is most important. If students do not have the right infrastructure and quality instructors, then the objective of spending crores of the taxpayers’ money on giving a lunch meal, or even a laptop for free will be totally unproductive. The government needs to instill an honest performance-based teaching programme. Today’s teachers aren’t ready to teach the children of tomorrow. Majority of the teachers feel that there exists a huge gap between what they can teach and what a student wants or is capable of learning today. For a brighter education scenario in this country, we need knowledgeable, self-motivated and well-trained teachers in abundance. The existing teacher compensation and other Aakash Chaudhary benefits do not make teaching an joint director, Aakash Educational Services exciting career for young candidates to take it up as a profession. Hence most of the aspirants who could have been good teachers, stray to other career options for want of better livelihood. Unlike doctors, once a teacher takes up a position, there is no continuous evaluation or performance monitoring system, which can help teachers stay updated. Most educational policies formulated today are not the brainchild of teachers—it generally reflects the understanding of politicians and bureaucrats in the education space. It would be prudent to create an administrative position for teachers, something like the Indian Teaching Services (ITS) cadre; this cadre can rigorously work towards the improvement of the overall education system on a whole and remain accountable for the health of the education system of our country.
hile there is an unbelievable amount of raw talent and entrepreneurial energy in India, much of this is unfortunately untapped to help the greater good. We routinely hear complaints of not being able to hire the right people. New government policies should invest heavily in applied education. This will encourage MNCs to set up businesses in India and train new workers with methods that have worked successfully abroad. Any unreasonable restrictions for a credible multinational to set up its operations in India should be eased, and the government should facilitate a process to make new entrants feel comfortable and welcomed in the market. Just as so many successful entrepreneurs came out of companies like Google, Proctor & Gamble, General Electric and others, the next generation of impact entrepreneurs in India will emerge out of similar companies. It’s these new skills, combined with the inborn entrepreneurial zeal among most Indians, that will create new businesses and transform existing ones, and will put India on the path to becoming a true superpower. The government should promote not only more training, but create an environment where it is easy to start an enterprise Vinodh Bhat co-founder & CEO, Saavn and take risks. january 2013 | INC. | 2 7
13 fixes for 2013
3 Urban autonomy
Deregulate our cities, and set them free
ndia urgently needs to deregulate its cities. This will spur quality growth and create competitiveness among our cities, which pillar significant portion of our GDP. By deregulation, I mean local autonomy to the direct election of the head of the city. Of course, it does not mean decoupling with the national or state policy as a whole. Giving autonomy to local governments will allow
them to focus on efforts and resources on issues which they specifically may have come to power for. More importantly, such local autonomous bodies will have to live in an environment where the impact of the decisions they have taken is directly felt by their constituencies. Therefore, their performance can be evaluated more accurately. The world over, cities are meant to be efficient hubs of commerce that provide the maximum bang for the buck on skills and capital. Yet, as a geographical area, cities are small enough to have electorates that can be involved (Maharashtra Chief Minister Ashok Chavan lost his job in days while it took years for Union Telecom Minister A. Raja to be cooked). State governments are the right solution for states but cities need directly-elected mayors. The government's job is to create the right environment for markets to succeed and intervene in areas where there are failures."
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4 Tender Process
Simplify re-tendering; make tardy payments liable
iven that government tenders represent a very large part of our GDP, there are some fundamental shortcomings in the process that affect all bidders. For instance, if a tender is cancelled and recalled later, all bidders are forced to buy the tender document all over again, for no fault of theirs. There are instances when the same project has been re-tendered four times! When you extrapolate this over the lakhs of tenders issued by various government bodies each year, and the tens of thousands it costs for most tenders, you are actually talking of a few hundred crores in tender document costs alone. The policy change should be that if document has been purchased by a bidder once, and the tender is recalled/re-tendered at the tendering authority's discretion, subsequent re-tender documents for that project should be at no charge to the earlier bidders. Also, several penalties are imposed on a vendor in case there is a delay in project completion. But, there is no liability from the government's side when payments are delayed endlessly. In fact, this delay becomes a key reason for corruption because officials concerned know that the vendor will suffer if payments are delayed, and thus can be induced into giving bribes to further the payment process. The policy should be changed so that once the completion certificate is issued for a project, or for the staggered milestones within it, payments made after 30 days from that comAnil Kumar pletion date will attract the same rate of interest as the vendor was managing director, Great Sports Infra liable to if the project was delayed.
13 fixes for 2013
complexity, and brought in an element of discretion that can be misused by authorities. For a company like ours—which is involved in manufacturing to retail, and is labour and resource intensive—the GST will be a huge step forward. There are several benefits that a GST rollout will lead to including making India a single market with a uniform tax rate by breaking down tax barriers. It will make our taxation system a true value-added tax regime that helps companies avoid double taxation. It will also significantly enhance tax compliance by reducing opacity, and reduce corruption in tax administration, both on the demand and supply side. Undoubtedly, the GST is possibly the most significant taxation reform of the decade, and needs to be urgently prioritised.
overwhelmingly vote for the ter coordination between implementation of the states and the centre. The only Goods and Services Tax (GST) thing the GST implementain India in 2013. Post impletion needs now is political mentation of the VAT and the conviction. Without the GST, Service Tax, the GST will lead to the existing taxation system is a far-reaching transformation, burdened with various anomand one that will inspire confialies and incongruity vis-à-vis Gaurav Dublish, promoter director, dence in the Indian state’s polittax rates, state-specific definiWildcraft India tions and a lack of uniformity ical maturity. The time is perfect in procedures. This makes tax compliance for an immediate rollout of the GST— both expensive and difficult for a tax-abidmainly, because the implementation of the ing company. Plus, the wide range of tax VAT and the robust IT infrastructure our levies have created distortions, increased taxation system now enjoys has led to bet-
Work on pushing demand
Give single-window clearance
icro, small and medium enterprises (MSMEs) contribute about 45 per cent of the manufacturing output, and 40 per cent of the total exports of the Indian economy. They have been the torchbearers of a fastgrowing India. However, even as their small setups help them be agile, it also brings them difficult operating scenarios. Many believe that the availability of finance is the biggest worry for MSMEs. However, what hinders MSMEs most is knocking on multiple government departments, especially in taxation. We urge the government for simplification and unification of taxes for MSMEs. We firmly believe that a "Single Window Clearance System" for MSMEs is an idea whose time has come. It will not only reduce red tapism, efforts, time and cost, but also reduce unintentional non-compliance by MSMEs to a great extent. It will allow MSME owners to submit regulatory documents to a single department. This paperwork mainly involves lengthy applications for import-export permits, customs declarations, trading invoices and other such documentation; for example, easing up statutory compliances in the Dinesh Agarwal National Manufacturing Policy founder & CEO, of 2012. IndiaMART
he solar power sector in India has witnessed tremendous growth in the last few years owing CEO, Azure Power to favourable policy and regulatory mechanisms. The Jawaharlal Nehru National Solar Mission (JNNSM) launched in 2010 is a major initiative of the government to promote solar energy technologies. The JNNSM has a very optimistic approach and timeline of achieving grid tariff parity by 2022. The mission aims to achieve volume production, local manufacturing, rapid diffusion and deployment of solar technologies across the country. Although the government has efficiently promoted supply side measures by way of incentivising capacity additions in solar power, sufficient measures are yet to be taken to create a demand side “pull” to complement the supply side “push”. Full implementation of market driven mechanisms (not subsidies) such as renewable purchase obligations (RPOs) and renewable energy certificates (RECs) are extremely important to promote solar power generation and attract greater capital to the sector. The government of India has mandated State Electricity Regulatory Commissions to specify renewable purchase obligations (solar and non-solar) for each state in India. This is essentially the minimum percentage of solar power distribution utilities must source. But, although specific solar power purchase obligations have been set, proper enforcement of the RPO mechanism is required.
january 2013 | INC. | 2 9
13 fixes for 2013
Foreign Direct Investment
Make raising investments easier uardian is a pharmacy retail company with over 230 stores built on the platform of 100 per cent reliability in a country where a very significant amount of medicines that are sold are fake. There are over 7,50,000 retailers and over 75,000 distributors in the country with a large number of shops not meeting even the basic requirements to sell medicines. In order for Guardian to expand, grow and offer reliable medicines at competitive prices throughout the country, it is critical that it is able to raise funds for growth. There are insufficient funds available from domestic equity players and banks do not give funds to retail players even against the pledge of liquid stocks. In order Ashutosh Garg for us to grow across the counfounder & CEO, try, the one policy that I would Guardian Lifecare like to see implemented in 2013 is permission for multi-brand retail companies like ours to raise foreign direct investment. In addition to growth, I believe our ability to raise funds to establish great systems and processes will also lead to advantages that would accrue to the consumer. For example: 1. Bar Coding is normally not affixed to medicines in India. This is critical if consumer interest is to be protected. This will also ensure that expired medicines are not passed off to the consumer, and helps the industry track medicines. 2. The supply chain infrastructure for medicines in our country is weak. Investments in the supply chain will permit the company to develop this infrastructure so that the health systems are strengthened. 3. Refrigerated transportation is needed for critical care medicines and vaccines. In the current scenario, shortcuts are often taken which jeopardise these medicines. With improved practices, the regulation of medicines by the government would also improve significantly. This will lead to better and more focused enforcement for the industry as a whole.
3 0 â€‚ |â€‚ INC. |â€‚ january 2013
13 fixes for 2013
Invest in our cities—they need it badly
he McKinsey Global Institute says the GDP of India will multiply five times by 2030. The growth will be fuelled by a rising urban population, which as of 2008 was 40 million and is slated to rise to 590 million by 2030. Urbanisation thus needs to be looked upon from a different angle. Indian cities are barely able to deliver even basic standards of living. If projected large scale urbanisation happens without an overhaul of urban services, the situation looks grim. Lack of investment in development of urban infra will worsen the situation for the current as well as the future population. As projected in the
United Nations Handbook of Benchmarks, the demand and supply gap by 2030 for treated water will be 94 billion litres per day, sewage treatment will be 109 billion litres per day, and solid waste disposal will be 82 million tons per annum. Therefore, it is high time that the government should either bring in new policies or substantially mend the existing ones. In sanitation, for example, government should adopt policies of tax relaxation and others, somewhat like what happened in IT. This will help bring entrepreneurs and conglomerates to the sanitation industry, a dire need for our cities.
Pass the new Insurance Bill
powers to regulate on these restrictions. Compensation wish the new Insurance Bill would be approved by to intermediaries is one such example. Commissions the Parliament and replace the Insurance Act of are currently capped in the 1938 Act. This has severely 1938. Insurance is a $20 billion a year industry in impacted the retail penetration of general insurance. India but governed by law that was written before For example, agents earn just about `750 for every indiIndia got her independence! I have had the unique experience of sitting in industry meetings where the vidual health insurance policy of `5,000 that they sell. discussion was around what the law makers had in So even if the agent sells one policy every other day she mind in 1938. The world has changed since then— will earn `11,250 a month. The task is difficult and Kapil Mehta India has been partitioned, the World War II has earnings are low. I hope the regulators will use the dismanaging director, SecureNow been fought, the internet has been invented and cretion provided to them to increase compensation on smartphones have been introduced. On a more seriselect general insurance products. ous note, insurance today is sold through distribution channels The third likely benefit of the new bill is easier access to capital. such as bancassurance, telecalling and internet. Payments are The new law will allow public sector insurers to go in for IPOs, made using payment gateways and credit cards. Unit link prodreinsurers to operate in India, prescribe lower capital for standucts are the market norm. None of these existed in 1938. As a alone health insurance companies and allow some amount of result, the law is grey and ambiguous. This ambiguity impacts the financial reinsurance. All these changes combined with the manner in which insurance brokers like us operate each day. The higher FDI will increase capital supply. new Insurance Bill, if approved, has several interesting features. Insurance is a heavily regulated industry. Many are deterred First, the FDI will increase from 26 to 49 per cent for insurance by this but I view regulation as a critical way to ensure that only companies and brokers. Only three of the top 20 international serious operators enter the business. It took us eight months to get brokers are currently present in India. Ownership restrictions are our license. I found that period difficult because every aspect of a primary cause for this. If the FDI increases, I expect several our background and business plan was scrutinised. However, international brokers would enter the country. This will help now that we have crossed that hurdle, I am delighted because develop the market. Also, companies such as ours will be excelthere is a huge entry barrier for others who may want to enter the lent local partners for the new entrants. business. A steady improvement in the laws that govern insurance The second big benefit is that many restrictions that are curwill systematically improve the industry’s performance. Approvrently in the Act will be removed and the IRDA will be given ing the insurance bill is a good and necessary first step. january 2013 | INC. | 3 1
13 fixes for 2013
11 Ease of Doing Business
Entrepreneurs should only need to mind their biz
s an entrepreneur in India, one has to spend a lot of time on legal compliance. This starts from the day one decides to start a new company. Registering a new business in India has become easier in the last few years, but it is still very tedious and time consuming compared to the developed markets. After registering the company, there are multiple government departments one has to deal with. Just look at how many tax authorities one needs to deal with—sales tax, service tax, value added tax. Similarly, there are multiple regulatory authorities to deal with, be it the Reserve Bank of India, Foreign Exchange Management Authority (FEMA), or the Enforcement Directorate (ED). Recently, the government has begun an enquiry to see whether FDI is being violated in case of e-commerce companies that have raised venture capital. Some companies are being examined two or three years after they first raised money. Clearly, the interpretation and Bipin Preet Singh understanding of law is not founder, MobiKwik clear, even on the government's side. In such a scenario, as an Indian entrepreneur today, I have to spend a lot of time and energy in being compliant. Instead of focusing on innovation, if young companies like ours, spend so much time in compliance, how can we ever build world class companies? Of course, we want to be compliant but can the government not make it easier and simpler? I wish the government would simplify and combine the most commonly used company related regulations into a single law which is easy to understand and practice. After that, they can implement this law as a single window compliance system for companies; a sort of a checklist. Such a system could be hosted on the internet and bring about transparency for the government as well. I believe this law would encourage more entrepreneurs to start a business and make it significantly easier for young companies to do what they do best—get customers and make money. 3 2 | INC. | january 2013
FASTER policy implementation
Bring the Preferential Market Access (PMA) Policy into play
mum domestic valuen 2012, the governaddition criteria. Since ment had recognised this policy does not the importance of the require any additional ESDM (Electronic Sysfunding from the govtem Design and Manernment, it can be ufacturing) sector and quickly implemented has come out with a and will create a marholistic vision of how ket-pull for domestic to make India a global products. It will prohub in the ESDM Sanjay Nayak mote entrepreneurspace. The governCEO & MD, ship while not making ment has released a Tejas Networks any compromises set of synergistic polieither on technical specifications, cies in the form of the National quality or price. Telecom Policy 2012 (with signifiToday in many electronics cant focus on Indian telecom and telecom products, R&D, IPR products and manufacturing), the and software constitute a large National Electronics Policy 2012 proportion of the product cost— and the 12th five-year-plan document, with a goal to establish India these are areas where India has a global competitive advantage. An amongst the global leaders in effective implementation of these ESDM “products” by using the policies should focus on the prodstrengths of our highly talented uct development, innovation, IPR manpower, R&D skills and a large and software within India, while and fast growing local market the rest of the manufacturing demand. eco-system comes up. One specific policy, included in By focusing on our strengths, the NTP-2012 and NEP-2012, India can build a new ESDM which can have the largest industry in the country, one that impact in 2013 is the timely and can rival the success of the IT effective implementation of the services industry. As per governPreferential Market Access (PMA) ment estimates, ESDM can be a policy. This is an innovative policy which leverages the large domes- $400 billion industry over the next 10 years, can create 30 lakh new tic demand of ESDM products jobs and can contribute up to 10 (e.g., telecom) and provides a per cent of the GDP, in addition to preferential market opportunity strengthening our national secufor any company (Indian or forrity and reducing our dependence eign) which creates products in India that meet the required mini- on imports.
13 fixes for 2013
13 Medical Tourism
Make earmarked medical zones, like SEZs and STPs
urge the government to incentivise medical tourism in India. The government should provide tax exemptions for hospitals that generate foreign currency and cater to foreign patients. Further, earmarked medical zones in line with Special Economic Zones or Software Technology Parks should be created to cater to the growing demand of medical services and contract medicine manufacturing. These zones will create additional sources of foreign exchange and capital for Indian hospitals and the pharmaceutical industry, and illustration by Raj Verma
ensure Indian medical services social responsibility (CSR) activand manufacturing are at par ities specifically covering critical with world standards. Further, areas like education, health, anithe Goods and Services Tax mal husbandry, water manage(GST) which is likely to push ment, waste management, India’s economic growth by women empowerment, poverty streamlining the credit availeradication or rural developability for input taxes paid ment. In wake of the new service Gurpreet Sandhu across board for manufacturing tax regime, where all services managing director, and services, should be introexcept the ones that fall in negaReva Pharma duced soon. I would also advocate some tive list are taxable, the government should kind of weighted deduction of 150 per cent reduce the service tax rate from 12.36 per of the expenditure incurred on corporate cent to the earlier 10.3 per cent. january 2013 | INC. | 3 3
HOW I DID IT
TheAccidentalBuilder Harsh Neotia AmbujaNeotiaGroup
He did not like the idea of running a cement business much, even less the idea of living in a small town in Gujarat—even if it meant the tag of being the boss at the famous Ambuja Group. As luck would have it, a family friend gave him the opportunity to try his hand at building homes. It’s been 26 years since then and Harsh Neotia hasn’t stopped building. From luxury bungalows, five-star hotels, malls and super specialty hospitals, Neotia has created several architectural landmarks in Bengal. Now, the chairman of the `1,200 crore newly re-christened Ambuja Neotia Group plans to expand his horizons, albeit cautiously. As told to Dhiman Chattopadhyay / Photographs Courtesy Company
I did my schooling from the Le Martiniere
for Boys, Calcutta and then did my B.Com from St Xavier’s College. In college, since I had classes only in the mornings, I would spend the rest of the day apprenticing with my dad at the Ambuja Group’s office in Park Street. I wasn’t really responsible for anything. Then, I’d just sit in meetings, try to understand the business and pick up insights. Our company was setting up a plant in Gujarat then. It started production in 1985, and became our flagship cement plant. In the early 1980s when I was going to the office, a lot of the buzz was around this.
In fact, in 1983, I was asked to go to Gujarat to take charge of this plant, and oversee its construction. My father believed it was a good way to blood me in. But, when I visited
3 4 | INC. | JANUARY 2013
the plant and the area and saw the nature of discussions that were happening there, I was overawed. I didn’t know what I was supposed to do there. It was too complicated for my liking. So, I came back and told my father what I felt. Looking back, I think I didn’t enjoy building a cement plant in a far-flung village in the middle of nowhere. I was too much of a city boy! Then, of course, I told my father that the project was too big and complicated for me to begin my career with. I came into real estate by accident. As fate
would have it, soon after I returned to Kolkata, a friend of my father who was moving to Mumbai came over to our house to ask what he could do with a 6 cottah piece of land he had in the upmarket Chowringhee Lane in central Kolkata. It struck me that may be I
A Cautious Opportunist Though
wary to expand much beyond Bengal, Harsh Neotia has never been hesitant to undertake new real estate ventures.
HOW I DID IT
could build a multi-storied residential apartment block there. That excited me. I wanted to take on this project. Fortunately, my father and uncle agreed. I knew nothing about building nor did my
family. My father hadn’t even built his own house. But I was 22 years old, and a lot more adventurous. I also took this up since it gave me a chance to stay on in Kolkata. It took us 18-20 months to do the project and we made more money than we had expected. My father’s friend was happy. And, I got a pat on the back from my father and uncles. In the bargain, I also made some money, a few lakhs in profit. Things picked up momentum. We got more properties to develop into residential projects. By 1989, we had done 7-8 projects, some of which were office complexes.
By 1989, I began to feel cramped. I loved
real estate and construction but I wanted to do bigger projects. I decided to move down the banks of the river Ganga in search of a good piece of land, to build a hotel, and a larger housing complex. We made 50 visits to different sites before setting our eyes on a 60-acre plot in Raichak, a Kolkata suburb. Raichak is just 90 minutes from the city centre but is well located for a hotel because it’s near the confluence of the Ganges and the Bay of Bengal. Here, the river looks like the sea, and you get to see dolphins if you’re lucky. This became my first big real estate deal. The local broker told us we would get hold of the land in a year’s time. It was a complicated exercise—over 400 people together owned those 60 acres! Eventually, it took us four years to purchase the land.
My father was livid. He felt I was wasting
money on a large piece of land two hours away from the city, and in an area where only fishermen and farmers lived. I asked him to trust me on this one. He agreed even though he never really warmed up to the idea. It was more like he resigned himself to it. Of course, he was very disappointed that I hadn’t got into the cement business. But, over the past few years, I’d tasted independence by working on my own. The last thing I wanted to do was to report to my father directly.
3 6 | INC. | JANUARY 2013
“We’ve consciously not expanded much beyond Bengal. We’d rather fill the space where we already have goodwill.” In 1993-94, we began work on the site. We
eventually opened FFort (a five start hotel modelled on a fortress on the river delta) in 1997. Today, we have over 100 residences, guest houses, and another five-star property, Ganga Kutir. For a few years, we franchised the FFort out to Radisson to operate. Three years back, we began managing it ourselves. This project has turned out to be great for us—both the hotels have been profitable over the past two years, and the residential units have been bought by leading corporate houses.
Around the same time, we also got involved
in what became a landmark, first-of-its kind project anywhere in India—a public-private joint housing project in West Bengal. The government came out with an ad asking for participation from the private sector for housing projects. We were one of the 15 companies that applied and were one of the two companies selected. Luck continued to favour us on this project. We got Balakrishna Doshi, a celebrated architect, to work for us.
Even as my real estate venture was going well,
the Ambuja Group was growing rapidly. My maternal uncle, Narottam Saxena and my uncle, Suresh Neotia, who was chairman along with my father, wanted me to get more involved in our primary business. Till then, I would just go to the annual meeting at the cement plant, and even there would spend most of my time in and around the temple complex in the plant. In fact, the meetings I attended, I was forced to do so. Clearly, I didn’t pick up much.
In 1997, Ambuja Group bid for Modi Cement through the Board for Industrial and Financial Reconstruction (BIFR). We were a front ranking bidder. In fact, we finally won the bid in 1998. After this was done, I was
summoned by Narottam mama who clearly told me that I had fooled around enough and now it was time to get down to the core business. So, I went to a few meetings during the bidding process. I was shocked when I went through the BIFR documents. There were astronomical liabilities we were getting into. Modi Cement had not paid royalty and sales tax dues, and had 400-odd litigations pending. Its dealer network had been all but demolished. In any case, I did not know the C of cement. How could I possibly work on such a complicated BIFR case? But, I finally decided to plunge in—mainly,
because of two reasons. One, at least, I was assured that even post-acquisition, Modi Cement, would be headquarted in Kolkata. I didn’t have to leave my city. Also, honestly, I realised I didn’t have the funds to do anything big in my real estate venture since I didn’t have access to resources. Also, my family had spent generations building the business. I had a responsibility of carrying forward the legacy. Despite convincing myself, the next two years were horrible. I regretted joining the cement business almost every day. Not only did Modi Cement have loads of problems, I found the cement business itself very boring and lacking in creativity.
By 2005, the family decided to move out of
cement. The first trigger came in 1999 when
HOW I DID IT
Looking back, most of what I have done has been opportunity driven. For instance, in 1999, we built for a tender for an office-cumshop structure in Kolkata. Actually, we didn’t really have an idea what we’d bid for—it was supposed to be a mall. That bid actually led to the City Centre, India’s second mall. It was also twice as large as the first, the Crossroads mall in Mumbai. In 1999, there were no malls in India. For a year or two, we were at a loss about what to do with the land after having paid for it. Initially, we had appointed Charles Correa to make a design for a traditional shops and office set up. In the meantime, the Crossroads Mall opened in Mumbai. I happened to meet Ravi Raheja, the owner of Shoppers Stop, at a party. He advised me to make a mall and even booked a store at City Centre. When I went back to Charles Correa with the idea, he almost threw me out. In India, he said, no one goes to malls, they go to bazaars. He almost walked out of the project before we arrived at a compromise of a bazaar with a mall added to it. Luckily, that compromise turned out to be the project’s USP. We accidentally walked into a good idea.
Reaping Profits Building on goodwill, Harsh Neotia has turned his real estate enterprise into a `1,000 crore plus company with `125 crore profit in 2011-12.
we bought out a part of DLF, and then ACC. With these big moves, we bit off more than we could chew. At one point, we had to go for an open offer because we couldn’t keep the 14.5 % holding we had in ACC. We didn’t have the resources for it. To raise resources, we would have had to dilute our holding to a precarious level which was unsustainable in the long run. In hindsight, we needn’t have been so ambitious—we weren’t big enough to go on such an acquisition spree. By now, the senior generation was older. They had serious health issues to contend with. Selling our cement unit became inevitable. We sold it to HOLCIM in 2006 who have retained the various cement brand names. After this, I was left to go back to doing what I loved to do—real estate. Fortunately, although I hadn’t focused on the real estate business for almost ten years, we had completed four projects in that time. Also, our projects Swabhumi, City Centre and Udayan all turned out to be landmark sites. So, we had
built up goodwill, but did not have the required scale. In 2006, we had only about 60-65 people in the real estate business and one office. We had a turnover of `90 crore and a net profit of `6 crore. Contrast that to now—we have grown to a `1,000 crore-plus company with `125 crore profit in 2011-12. Today, we not only build townships of both
luxury and affordable homes, we have super specialty hospitals (The Bhagirathi Neotia children’s hospital, for instance), five star hotels, malls, office complexes. We have also expanded beyond Bengal into Raipur and Patna. We’ve consciously not expanded much beyond Bengal. We don’t have that kind of financial power yet. Also, we’d rather fill the space where we already have goodwill before moving elsewhere. Today, we can proudly say West Bengal is Ambuja country. We have five star properties in the Sunderbans, Kolkata, Raichak, Santiniketan and Darjeeling. We’ve also built the best hospitals, malls and higher educational institutes.
Actually, I have realised that in life some
things work and some things just don’t. There is not always a direct co-relation between efforts and results. It’s a lesson I learnt early in life—some things give you greater results with much less effort. So, today the slow down has hit us like most others. We are not starting anything new. It’s better not to fight the economic mood. Of course, we are going ahead with the projects we have in pipeline. Putting those on hold could prove to be more expensive. I would be concerned if the economy continues this way. I’m hoping that much like in 2008, things will look up in another 7-8 months.
Ambuja Realty isn’t my only dream though although the goodwill we have generated gives me great satisfaction. Of course, you can keep growing and growing. Even if things are good, it’s not good enough. I want to look ahead. After I retire, may be 10 years from now, I’d like to run a school. No one is likely to give me a dean or a principal’s role so I’ll have to start my own school. JANUARY 2013 | INC. | 3 7
How & where to
make money in
2013 (and beyond)
Game-changing trends, h ot m a r k e t s ,
daring predictions plus 16 reasons to be (cautıously) cheerful about the year ahead by Adam Bluestein
It’s been a while since we’ve been able to approach a new year with a
whole lot of optimism. But 2013 feels different. Unemployment is edging downward, and the economy is mending (however slowly). But it’s more than that. Running a business has seldom seemed so... well, interesting. And, dare we say, cool. Why? Read this story and find out. 3 8 | INC. | january 2013
1.Plastic Will Be Passé
Without credit cards, getting paid will get a lot quicker, easier, and cheaper. advice from the Future, Part 1
“Get yourself a 13-year-old mentor.” Brian David Johnson is Intel’s in-house futurist. You travel all over the world to study how people are using technology. What specific things do you look for?
I try to figure out what it will feel like to be a human using technology 10 years from now. One thing I always look for is the silly, crazy, niche apps—like Angry Birds, say, or an app that lets you track your baby’s sleep schedule. These get into the richness and complexities of humans. In what ways are our interactions with technology changing?
Touch and voice technology are getting better. And gesture recognition will be used more broadly. We’re looking at how to bridge multiple inputs— motion, sound, and gesture— combined with information about people’s locations to put it all in context. Foursquare is just the tip of the iceberg.
top right: illustration: ben voldman; image source: courtesy subject
As a futurist at Intel, you have all the resources of a giant company to draw on. How can someone with fewer resources predict the future?
Smartphones are displacing credit cards the way plastic once toppled cash. Google got the ball rolling, with Google Wallet. Now other big names are getting in on the game—AT&T, Verizon Wireless, and T-Mobile, for example, are collaborating on a mobile wallet called Isis. But the biggest game changers so far have been—no surprise—entrepreneurs. Square, a start-up launched in 2009 by Twitter founder Jack Dorsey, offers simplified credit card processing via a credit card reader for mobile devices. Merchants can illustration by ben wiseman
use Square to swipe cards on a smartphone or tablet instead of a traditional credit card terminal; customers can use it to pay via smartphone, à la Google Wallet. And Square’s straightforward fee structure—$275 per month with 0 per cent processing on the first $250,000, or 2.75 per cent per swipe— has proved to be a welcome alternative to traditional models that charge merchants as much as 5 per cent of the purchase price, plus additional fees. Dwolla, an online and mobile digitalcash network based in Des Moines, takes
Get yourself a 13-year-old mentor. The perspective of someone who has grown up with computing power in his pocket, always being connected, is fascinating. And at 13, people are just starting to form their own vision of the world and have the language to communicate it. Should we be worried about the future?
I try to get people to think and understand that you can’t let the future happen to you. You have to take action. We all own the future and have the power to shape it by creating a vision of the world we want. january 2013 | INC. | 3 9
special report How to Make Money in 2013
Reasoens to B Cheerful
Real Estate Rebounds After years of the doldrums, the residential real estate market—perhaps the mother of all economic indicators— finally is showing signs of life, even in hard-hit areas such as Arizona and Florida. These are the metro areas showing the biggest gains in home values from September 2011 to September 2012 (the most recent data available) and their average home prices.
Fort Myers, FL
+20.4%, $149,400 +10.1%, $139,800 San Jose, CA
+7.2%, $215,500 +7.0%, $121,500 Tulsa
+8.8%, $221,000 Source: Zillow
advice from the Future, Part 2
“Zombies are so played out.”* Jamais Cascio is a distinguished fellow at the Institute for the Future. Do we really need to worry about things that will happen 10 or 20 years from now?
Ideally, as an organisation, you want to develop strategies and plans that are robust across the entire spectrum of possible futures. Forecasts are all going to be wrong—but you want them to be wrong in useful ways. Futurism is almost like a vaccination. You inject a little bit of a denatured pathogen to prepare your body in case you encounter it for real. How do you imagine these possible futures?
One way is to look at technologies that are just coming out and think about how they can be abused. Product designers have their idea about how things should be used, but as William Gibson said, “The street finds its own uses for things.” Take tablets. How are they going to be hacked into other things? Take anything new and think about how the designer would not want someone to use it. You’ve done some work in the gaming and entertainment industries. What developments are you tracking there?
The advances in artificial intelligence in gaming— with nonplayer characters behaving more and more like humans—are just incredible. Any real breakthrough in AI is going to come from gaming. In entertainment, zombies are so played out. I have a gut sense that people are getting tired of apocalyptic scenarios. I expect we’ll see more TV and movies, like Star Trek, that show a world that actually looks like a good place to live.
*What’s after zombies? See page 45. 4 0 | INC. | january 2013
left: PHOTOS.COM ; right: illustration: ben voldman; image source: bart nagel
just 19 per cent in 2011. That’s impressive, especially when you consider how many potential buyers have looked—and balked— because the process for making purchases on a smartphone was just too unwieldy. (Ever tried tapping your credit card number into a form on a 2- by 3-inch screen?) Chicago-based start-up Braintree saw opportunity in eliminating abandoned shopping carts. It offers a simple platE-commerce increasingly means form to enable one-tap purchases from mobile websites and provides m-commerce, and optimizing customers with online and mobile for mobile payments is key. payments processing—including in foreign currencies—for 2.9 per cent of the purchase price plus 30 cents per transture, meanwhile, lets users send funds to action, with no monthly fees or minimums as many as 2,000 people simultaneously, As customers use their smartphones for and has staggering implications for any shopping, the devices will become a pribusiness with a payroll. In April 2012, mary conduit for directing targeted couDwolla was serving 15,000 merchants and pons, rewards, and other special offers. processing more than $1 million in transBelly makes digital-based loyalty programs; actions daily. think of them as electronic versions of the Going into 2013, e-commerce increasclassic “buy 10 get one free” punch card. ingly means m-commerce, and optimising Merchants track purchases through an mobile payments will be key for any busiiPad; consumers use a smartphone app. ness that sells online. Purchases made on Already, companies are getting creative with mobile devices in the US are expected to rewards: A sandwich shop will name sandtotal $11.6 billion in 2012, nearly double wiches after repeat buyers; a grocery store those made in 2011, and are forecast to lets loyal shoppers cut the line. Bottom line: reach $31 billion in 2015, according to The boring business of payment processing eMarketer. Roughly 34 per cent of people is getting pretty sexy. And that’s good news surveyed by IDC Financial Insights in 2012 reported making mobile purchases, up from for your business, too. things further, by cutting out credit cards altogether. The brainchild of Inc. 30 Under 30 honouree Ben Milne, Dwolla allows users to transfer funds directly between bank accounts, from a computer or smartphone, for a flat fee of 25 cents per payment, with no charge for transactions of less than $10. The company’s MassPay fea-
2.There Will Be an App for Every Waking Minute
Nearly half of all Americans
own a smartphone. Globally, mobile users are expected to outnumber desktop users by 2014. And the amount of time we spend on mobile devices is growing fast—currently an average of 82 minutes a day, more than twice the amount of time spent two years ago. “Consumers are accustomed to—even addicted to— always-on, anywhere, anytime connectivity, and the next 12 months will see them push their mobile lust to obsessive, occasionally nearly insane degrees,” says David Mattin, lead strategist at Trendwatching.com. These multitasking users are looking to fill microamounts of time (sometimes just seconds) throughout the day and rely on a constant stream of customised data to help them decide where to go, what to do, and what to buy. Businesses that are attuned to mobile consumer behaviour can take advantage of these “mobile moments.” Making sure your online presence is optimised for mobile is a no-brainer. A study illustration by ben wiseman
Do you have a mobile strategy? Even if you do, you probably need a new one.
Jeremy LaTrasse, CEO of Message Bus, an app that enables messaging across e-mail, mobile, and social networks. Apps will have to be tailored to appeal to on-the-go smartphone users, and they will also have to work with the more leisurely tablet experience. Boloco, a chain with 22 burrito restaurants on the East Coast, has embraced an all-screens strategy. It offers online ordering through its website and a mobile app (with a 10 per cent discount), “mayor” privileges for customers with frequent Foursquare check-ins, touchscreen kiosks to speed wait times, and TV monitors in Boloco outlets showing videos about where the food comes from. Since Boloco introduced its commissioned by app, online and Google found that mobile sales have three-quarters grown fourfold, at an of visitors to a average check of of men and mobile-friendly $9.05, compared with 63 per cent of women don’t site will return, $7.51 for all sales. go an hour but 79 per cent of Getting ready for without checking those who find a total appification is, their phones. site difficult to admittedly, a tall use on their order. Not only must Source: Lookout mobile devices you build apps and will give up and other tools, but you go elsewhere. Do you also also have to formulate a need an app? Probably. Minutes cross-platform marketing spent per month on apps strategy and ensure compatimore than doubled from bility across different devices. March 2011 to March 2012, But a host of start-ups is according to comScore. thriving by providing the backThe smartphone, though, end services. Jay Jamison, a is just one of the new screens partner at BlueRun Ventures that businesses will need to in Menlo Park, California, calls grapple with. In 2013, we will them the “arms dealers of see a continuing proliferation mobile-app infrastructure.” of screen sizes and device They include Parse and Stacktypes—phones, tablets, deskMob, which give developers tops, web-connected TVs, and quick, easy ways to build apps, touchscreens in retail and other and Twilio and Urban Airship, environments—to accommowhich help automate things date different uses, hand sizes, such as SMS messaging and and personal preferences. location-based notifications. What does it all mean for Fortunately, you don’t need you? “We’re sure to see more to be everywhere or do everymobile commerce arise in new thing. But you do need to be in and interesting formats,” says the game.
Reasoens to B Cheerful
Six Numbers That Should Make Your Day
Projected price per barrel of crude oil in 2013, down 7.4 per cent from 2012 Source: U.S. Energy Information Administration
16% Projected growth in the US aerospace industry in 2013 Source: Manufacturers Alliance for Productivity and Innovation
Projected growth for US auto and auto-parts makers in 2013 Source: Manufacturers Alliance for Productivity and Innovation
$270 billion Projected businesstravel spending in 2013, up 4.9 per cent from 2012 Source: Global Business Traveler Association
Projected increase in retail sales in 2013 Source: Kiplinger
-34.6 The Bloomberg Consumer Comfort Index in mid-October, a six-month high
january 2013 | INC. | 41
you need to know this
5 new niches that are heating up fast
“Education is at a major crossroads in terms of the exorbitant cost and the lack of direct correlation to improved life outcomes,” says Amish Jani of FirstMark Capital in New York City. In other words, expect to see lots of innovation in this space. Andy Hines, a futurist who teaches at the University of Houston, sees opportunities in online programs for professional certifications and in “catch up” degree programs for people who started college but didn’t graduate. “The percentage of people who graduate has been flat for a long time,” Hines says. “If we could reach that huge body of people in limboland, we could see a nice boost.”
Products such as the Nest thermostat and the Plumen CFL light bulb are just two recent examples of a trend we can expect to see a lot more of in 2013: startups shaking up stale product categories through the power of design. “Disruptive products are king, and innovative designs will challenge the status quo in ways that previously wouldn’t have been possible,” says Scot Herbst, of Herbst Produkt, an award-winning product-design firm. “Being small and nimble and new can free a creative mission from all of the antiquated standards that established players suffer from.”
Americans are desperate for a good night’s sleep. In an otherwise lethargic economy, mattress makers Mattress Firm and Select Comfort grew 39 per cent and 25 per cent, respectively, last year, according to the publication Furniture Today. And demand for products and services that promise more and better zzz’s shows no signs of abating—including “performance” bedding, sleep-focused retailers, and high-end sleep-consultant services. “The trend aligns perfectly with a basic law of economics—supply and demand,” says New York City brand strategist John Parham. “There’s very little sleep these days, and therefore it’s in huge demand.”
Real stuff, made in the USA Personal health, always on In 2013, consumers will increasingly turn to digital tools to monitor and improve their health through exercise, sleep, and diet. Sales of wearable fitness-tracking devices like Fitbit are forecast to hit 90 million units in 2017, and the market for sports and fitness apps will exceed $400 million in 2016, according to ABI Research. And increasingly flexible and sophisticated sensors— embedded in clothing or shoes or attached to the skin like bandages—will help speed adoption and enable always-on monitoring. “This will explode in 2013,” predicts Unity Stoakes, co-founder of StartUp Health.
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The rising cost of manufacturing abroad and new technologies like 3-D printing are combining to spark a resurgence of small manufacturing in America. Not only are consumers hungry for the unique and customised, but physical-product start-ups can also now work anywhere—see Seven Cycles, which produces high-end bicycles in Watertown, Massachusetts; Artifact Bag Company, whose leather and canvas goods are handmade in Omaha; and Shapeways, a 3-D printing “factory” in New York City.
special report How to Make Money in 2013
3.Ads Will Be Articles, and Vice Versa
Forget banners and pop-ups. Instead, connect with consumers via blogs, videos, white papers, and more.
TBG Digital. And online publishThese days, nearly everyone ers such as The Atlantic and knows how to click past or block Gawker Media are offering more banner ads and pop-ups. Meanopportunities for sponsored time, consumers are spending posts and videos tailored to the more time online, especially on interests of their readers. social-media sites. Those two Making the shift to content trends are adding up to a new will not be easy. Unlike old way of marketing—one based methods of marketing, in which on connecting to people via brands could keep campaigns online content. going for months at a time, What is content? It could social media requires constant be nearly anything: blog posts, refreshing. “You can’t leave a white papers, webinars, podmessage in the market for nine casts, slide shows, videos. The minutes, let alone nine months,” key is that it engages customsays James Gross, president of ers—and spurs them to share Percolate, an advertising softit with others. See, for example, ware company in New York City. the action-sports videos proA flurry of companies is focusing duced by helmet-cam maker on the business opportunity GoPro or the beauty and lifestylehere, providing online tools and focused blog on Birchbox. Conservices that help streamline tent can be equally as compelling both content creation (like Conin a B2B context: The website of tently and Percolate) and the HubSpot, a maker of marketing placement of native advertising software, features case studies, (Sharethrough). videos, and podcasts about key Fortunately, a marketing trends in marketing. campaign on Instagram, for example, can be manCreating content for your own website, though, Average aged by a single person with a smartphone. Or you is only part of the content play. With millions of time spent can outsource it to customers—something that Jay users each, social media’s Big 8—Facebook, watching online Peak, a ski resort in northern Vermont, does to foster Twitter, Tumblr, Pinterest, Instagram, LinkedIn, video jumped brand loyalty. The resort asks skiers to tag Instagram Google+, and YouTube—present untold opportunishots that they believe exemplify what they love about ties to acquire and engage audiences. But you can’t the mountain with a “Raised Jay” hash tag. “It ends do it via banners, coupons, and other traditional up being a conversation starter,” says marketing approaches. Instead, marketers are engaging in from 2011 to 2012. director Steve Wright, “an opportunity to open lines so-called native advertising, a term you’ll be Source: Nielsen of communication and put a face to the business.” hearing a lot this year. Something else that’s new about content Native advertising is simply advertising that marketing: The content in question does not have follows the format, style, and voice of whatever to be slick to be effective. And therein lies another advantage platform it appears in. The goal is for someone browsing a site for small companies, says Gross. “A lot of times, larger to see the advertising as something integral to, rather than an companies can get so focused on quality that they won’t intrusion on, his or her overall experience of the site. It seems do something bold. A smaller business can be quicker to to work: On Facebook, for example, the average click-through let go of quality and focus on what actually works from a rate for “sponsored story” ads in the second quarter of 2012 content perspective.” was 53 per cent greater than that of display ads, according to from top: ben wiseman; courtesy pantone color (2)
you need to know this, too
Happy Blue Year Twice a year, the
Pantone Color Institute forecasts the colours that will dominate fashion collections—and inevitably influence other industries as well. The top spring colour in 2012, Tangerine Tango, is so... um, 2012. The pick for spring 2013: Monaco Blue. “It has stability and depth,” says Leatrice Eiseman, the institute’s executive director. “People are being more thoughtful; they’re looking for dependable classics.” Don’t expect to see big-ticket items in bold colors, Eiseman says, until the economy really picks up steam again.
out january 2013 | INC. | 4 3
advice from the Future, Part 3
“The key to the future actually might be in the past.” Paolo Bacigalupi is a Hugo and Nebula Award–winning science-fiction author. A lot of your work focuses on the way humans will be challenged by an increasingly hostile natural environment. What are the implications for businesses?
Economies are embedded inside ecosystems. Companies dependent on tourism, for example, are affected by low rainfall—there’s less snow for skiers, and forest fires are more intense. Businesses that decide to be reality based and identify where they’re vulnerable to climate impact, that start thinking about how to buffer against it, are going to be able to take advantage of shortages. When the water runs out, not everyone is in the same pickle. Are there places today that give us an indication of what the future might look like?
The key to the future actually might be in the past. Everything we’re doing now relies on massively integrated global supply chains that depend on cheap oil and other things. Does a future with higher-priced gas look more like the past? Hunt for places around the world where price matters more to see how price might affect behaviour. Do books have a future?
The marketplace tells us that good, visceral storytelling has a place. But there are lots of questions about the format that stories take. Maybe storytelling belongs in audio—a short story is the length of a commute. That can be a sacred spot where you have the ear of the reader without having to compete with other media like games or TV.
4 4 | INC. | january 2013
4.Customers Will Get in Your Face Used to be you had to please your customers, your investors, and the press. What happens when your customers are your investors and your press? including videos and photos from its In today’s networked, hyperinformed production facility. And Pebble’s founder, economy, customers are no longer mere buyers. They’re helping design and innovate Eric Migicovsky, learnt an important lesson. “It’s awesome to see the amount products and services, preordering and of support we have after posting funding products that haven’t an update about production,” been created, and even investing he says. Kickstarter learnt directly in early-stage busiits lesson, too: In September, nesses. If you continue to treat it announced new rules that, your customers as mere sources of people trust among other things, require of revenue, you’re missing the recommendaproject creators to better boat—and, quite likely, pushing tions from friends and disclose risks and challenges them into the arms of a competifamily above associated with their projects. tor who understands the truly any form of But crowdfunding is just one important role they can play. advertising. way to get customers involved. For a look at the opportuniSource: Nielsen Quirky, a New York City company ties, and perils, of this new custhat manufactures household tomer-centric model, consider goods and tech accessories the Pebble Watch. The company suggested and voted on by its 300,000-strong launched via the crowdfunding platform community of citizen inventors, uses Kickstarter, raising $10.2 million and another model. Rather than preselling, netting orders for some 85,000 watches. Quirky produces selected products at its When the anticipated September delivery own risk and rewards “influencers”—those date came and went without explanation, who have helped to refine the product— Pebble took a serious beating. But the with royalties on the items’ sales, which company rallied, posting regular updates,
special report How to Make Money in 2013
gives them an incentive to promote the items themselves. The model has essentially eliminated the need for traditional marketing, says Ben Kaufman, Quirky’s founder and CEO. “The nature of marketing is convincing people they need something—you don’t need to persuade someone they need something if they’ve already told you they need it.” Kaufman expects to see more companies follow his lead. “It’s the smart way of doing things—learning more about what customers want up front, before making a big investment.” Even when customers aren’t literally invested in a company as product consultants, there is a growing need for companies to be more transparent. Forward-thinking brands in all industries will increasingly be expected to disclose information—about products, labour practices, sustainability—that customers care about. “Brands will need to move from just having nothing to hide, to showing and proving everything they do,” predicts David Mattin, senior analyst at Trendwatching.com. “Even consumers who aren’t interested will expect brands to prove their ethical credentials to those who are.” Tricia Wang, a digital ethnographer who has worked for Nokia and Microsoft, points to another emerging trust issue that marketers may need to think about. “For a long time, brands thought that they only had to focus on developing trust with their consumers,” says Wang. “But as companies start embracing sharing models that can rely on people’s networks to popularise their product or even create the service itself—think Airbnb—designing for trust will be a top priority. Successful companies will be the ones that figure out how to foster trust—not just between the company and the consumer, but between consumer and consumer.”
5.Social Media Will Get Bigger.
Facebook just hit one billion users. Brace yourself for the backlash. Remember everything you’ve learnt about the power of Facebook, Twitter, and other social-media sites to promote your There were business? It remains true, with one caveat: In 2013, expect to see a backlash to the sheer massiveness of these sites—as well as the emergence of smaller-scale, niche networks. “In 2013, we’ll see more users start to expect, if not demand, some tangible benefits in exchange for all the time they social network users in 2012, a spend online and the personal information they’re sharing,” 19.2% increase says Trendwatching.com’s David Mattin. Adds Howard Tullover 2011. Source: eMarketer man, CEO of Tribeca Flashpoint Media Arts Academy, partner at Chicago High Tech Investors, and columnist for Inc.com: “Consumers are starting to understand the value of their information and asking to be compensated, whether with badges, rewards, preferred pricing, or discounts and perks.” Tullman’s prediction for 2013: “We’ll increasingly see new kinds of virtual currencies and services—like Ticketmaster’s Facebook app that lets you see where your friends are sitting at an event.” At the same time, the sheer massiveness of Facebook is creating opportunities for smaller-scale, niche networks. People aren’t likely to flee Facebook outright, Tullman says, but they will increasingly augment their online social experience by using other networks whose size, privacy, and more customised parameters are better suited to specific tasks and goals. Some good examples are Path, a free personal-social-network service that limits users to a 150-person circle; App.net, a subscription service that lets users create their own social networks; and NextDoor, a private social network that helps users connect with others in the same geographic area. MindMixer is a sort of virtual town hall that enables communities to define and discuss ideas. Yammer, meanwhile, helps businesses create internal networks. The emergence of more and varied social networks will present a challenge to businesses accustomed to Facebook and Twitter. For one thing, many people use such networks specifically to avoid the increasingly commercial aspects of Facebook; in that case, you would be smart to start by limiting your presence to participation and listening, rather than selling. Eventually, however, smaller networks could become effective ways to reach specific geographic areas or professional groups, or build communities around a brand. The goal here, says Tullman, is less to attract new customers than to build deeper, longer-lasting, and more lucrative relationships with the ones you have. When you have that, word of mouth will naturally bring in the new business.
Robots are the new zombies.
Finally, something really scary. Vampires will suck your blood, and zombies will eat your brains. But robots? They want your job. In the months ahead, robots will be everywhere. They will continue to fight our
wars, make our stuff, and grow ever closer to driving our cars. And they will be swarming the multiplex, starting with Steven Spielberg’s Robopocalypse, the director’s first foray into science fiction since 2002’s Minority Report. january 2013 | INC. | 4 5
Tactics. Trends. Best Practices.
Ashok Soota didn’t want to rely on clichéd ideas for his company’s logo. Could crowdsourcing do the trick? by ira Swasti
JANUARY 2013 | INC. | 47
IT veteran Ashok Soota left his former job of 12 years at MindTree
to start another IT firm, Happiest Minds in April 2011. He spent the next five months, from April to August 2011, setting up the brand of the company single-handedly. Soota had the name of his venture in place but designing a company logo that defined the company’s identity, without a team in place, was another matter altogether. So, Soota decied to crowdsource a logo design. He claims Happiest Minds is the first Indian corporate to have done that. But, has handing over the identity of his company to a bunch of strangers paid off?
The company now may have eight offices around the world but for the first four months, Soota worked single-handedly to create a brand for his new venture. For Soota, the name of the company wasn’t a problem because he was clear about naming his company on a theme close to his heart—happiness. “It is evident that in an increasingly 24/7 world, happiness has taken a back seat,” Soota says. “Accordingly, we decided to create a company with a simple mission of creating both the happiest people and the happiest customers. But, designing a logo that could speak volumes of the firm’s brand, without a design or even a marketing team in place, wasn’t going to be easy. Even if the team was in place, Soota says designing the logo inhouse was never an option because that wasn’t his company’s core competence. The only other alternative was to hire a professional design organisation but that meant writing cheques worth tens of lakhs of rupees, a huge cost for a start-up.
After co-founding and running the $400 million Indian IT firm MindTree, it came as a surprise to most industry experts when Ashok Soota declared a sudden exit from the company to start another venture of his own. Soota says the rationale behind creating another IT venture was the underutilised and unexplored domain of new disruptive technologies such as cloud, mobility, social media and big data, in the country. “These technologies have seen a lot of change in the last decade, and yet not a single new IT company has focused on developing solutions using them,” Soota says. So in April 2011, the 71-year-old IT pioneer grasped the opportunity to lay the foundation of Happiest Minds, an IT services provider based in Bangalore whose core area of functioning is to combine these technologies to create solutions for manufacturing, retail, travel and media businesses. Over 14 months, the company has expanded to eight offices in the US, UK, India and Singapore.
4 8 | INC. | JANUARY 2013
The next steps
Soota decided to consult renowned marketing expert Jessie Paul, founder of marketing firm Paul Writer to come up with a solution. During one of their brainstorming sessions, the duo came up with the idea of tapping the crowd for ideas for a company logo.“The main driver of using crowdsourcing was not to save money but to tap into the creative abilities of a large group of people,” Soota says. He roped in two crowdsourcing platforms—Jade Magnet and Techgig—to launch a logo designing contest. Contributors were given a simple brief—to show what Happiest Minds means visually with the help of an image, a scribble, a photograph or anything that can be transformed into a visual brand identity. A cash prize of $2,000 was decided for the best design.
Branding is a complex exercise for the best of companies. To hand over a key aspect of the task—the visual identity of the brand—to a group of non-professional designers who might not even know the company’s core business—might seem like a risky proposition but Soota says, it worked beautifully for them. The crowdsourcing contest began in May 2011. In two months, Happiest Minds received nearly 1,500 logo design submissions. The top 150 ideas were picked out and put to popular vote on Jade Magnet and Techgig. From that emerged a short-list of 25 finalists to be presented to a jury comprising of design and marketing experts including R Sridhar, Geetha Narayanan Rukmini Krishnaswamy and Jessie Paul along with Soota. The winning design was one in which a half figure of a person had its arms open and raised with three idea sticks hovering over its head. It was sent by Jemin Shingala, a software professional based in New Jersey. The multi-coloured scheme of the design was replaced by a green and yellow combination by Bangalore’s famous Srishti School of Art Design and Technology (its director Geetha Narayanan was on the jury) to make the design easier to reproduce, and add to the happiness quotient.
strategy The takeaway
“We were not crowdsourcing to save money. Our goal was to democratise the process, get more participation and fresh ideas,” Soota says. “However, the crowdsourcing contest turned out to be both an innovative and cost effective approach.” Using two crowdsourcing platforms instead of one was a wise decision as the company got access to two different sets of people pitching in with designs. While Jade Magnet attracted more independent international designers, Techgig brought in designs by technology professionals. The crowdsourcing, in fact, played a role beyond the creation of a logo. It helped introduce Happiest Minds to its target market. “It became a cost-effective way to create a buzz around our company. It provided us with an opportunity to share the story behind the name of the company and be known among our target audience even before we had a logo,” Soota says.
the experts weigh in Can’t replace professionals
An intelligent way to tap hundreds of minds for a logo design but this cannot overturn the work of a dedicated professional who can deliver a better product along with a value addition of credibility and assurance on no reusage of the design. Plus, logistics can be complicated when you are paying numerous people to work on different projects. A company with a low budget can afford to get its logo crowdsourced, but a company with a good budget must always hire a professional to design its logo, who can interpret its vision and mission in the most appropriate way. Deepak Kaistha | CEO |
PowerBrands, New Delhi
a variety of ideas at your feet
When you use social media to work on an idea, it can both mean superlative collaboration, or in some cases, total confusion. But I don’t think there could have been a better option in the case of the visual identity of Happiest Minds, where the strength of variety through crowdsourcing and the whetting by a very competent and aware jury brought out the best possible outcome. I don’t think there is any risk involved in crowdsourcing because after the public voting, the final decision rests with the core team of Mr. Soota’s trusted advisors and of course, himself. N. Chandramouli | founder and CEO | Comniscient Group, Mumbai
round the globe creativity
I’m a fervent believer of the idea of crowd-sourcing and Mr. Soota’s endeavour is a fine example of how this can be done successfully. The fundamental thought here is the ‘‘democratisation of an idea”. If you’re looking for great ideas, use the power of the web to seek them from anywhere in the world. The only downside is that of sifting through a barrage of thoughts that come your way. But I see that as a worthwhile exercise. T-shirt website Inkfruit.com and the community lending website Kiva.org are other fantastic examples of how this can work so well. Chris George | founder and CEO |
EBS Worldwide, Mumbai
JANUARY 2013 | INC. | 49
An eclectic mix of people typical of any
business organisation—some in their 20s, some in their 50s, some women, some men, some IIT pedigree and some freshers from a local university—sit together in an office conference room of a 250-people global communications company based in Mumbai, where a woman is asking them several questions: “Have you ever been witness to a scene where a heavilybuilt person in your team was made the butt of jokes when you were planning a company picnic? Or made fun of a shy man with a low effeminate voice who raised his voice to put across a point during a meeting? Or sneered at a male colleague who wanted to work from home to
5 0 | INC. | JANUARY 2013
take care of his child at while her wife was away on tour?” These are typical questions that Nirmala Menon, founder and CEO of Interweave Consulting, a Bangalore-based diversity management firm, asks during her half-day workshops at companies such as Google, HCL, Yahoo and Britannia to help create more inclusive workplaces. More and more, companies the world over have begun to realise the value of an inclusive workplace where team members appreciate each other’s differences to create a more collaborative working environment for one another. Also, it’s only in an environment when people aren’t worried about being judged, or
looked down upon, that they feel the freedom to come up with innovative ideas and out-of-the-box solutions. Though gender diversity is a global talking point (see box) with the world’s largest corporates making determined efforts to make their workplaces, Boards and parliaments more representative, Menon points out that diversity issues at the workplace go much beyond gender issues. “Diversity is not just one thing. It’s a combination of all the differences that exist between people that make them unique,” Menon says. In an extremely diverse country such as India, differences at the workplace could arise because of the language one
Managing The diversity dividend Want to drive innovation at the workplace? Build a more inclusive team.
speaks, the region where one comes from, the institute one graduated from— whether it was an IIM or a local B-school—the person’s sexuality or even the community he or she belongs to. “Typically, inclusion does not come naturally to us as anybody who is different from us is seen to be unworthy of our trust,” Menon explains. “So at the workplace, people tend to form small groups with colleagues who’re like them, sharing information selectively with others or shying away from collaborating.” Exclusion isn’t always limited to those we perceive to be not “as good as us”. Subconsciously, people tend to have strong prejudices against people from an “elite” educational background or preconceived notions about certain communities being smarter. This also leads to some employees not feeling a part of the team, which in turn takes a toll on employee productivity and engagement levels within the organisation. Hence, managers need to be careful of their own behaviour to ensure that the workplace is perceived to be inclusive. Menon uses a simple test to help them realise that. She says if a manager’s team members can figure out who the manager’s favourite people are in the team—simply by observing the kind of conversations they have with each other—she is not doing a good job of being an inclusive manager. A good leader is one who is seen as someone who interacts and socialises with all her colleagues on an equal footing irrespective of their educational or community backgrounds. Moreover, in today’s globalised world, more and more businesses are realising that it’s not just important but essential to have a diverse workforce demographic that is representative of their target market to better understand the needs of their customers. By bringing together individuals from different backgrounds and experiences, businesses can more effectively market to consumers from different communities, educational backgrounds, or even sexual orientation. When an “insider” can tell you how a part of your target group thinks, or what they want, a 5 2 | INC. | JANUARY 2013
Championing Diversity A glance at some of the winners of the 2012 Diversity Leader Award, given by the American bi-monthly magazine Diversity Journal, to recognise initiatives organised by American businesses to encourage and embrace inclusion at the workplace: Raytheon, a defense technology major, organises regional diversity summits where almost 3,400 employees from across the company participate to build diverse teams and organisations, proactively resolve diversity-related conflict and demonstrate the ability to adapt personal style to accommodate differences. Workforce solutions provider ManpowerGroup uses social media to reach and hire untapped sources of talent such as women, people with disabilities and those with cultural barriers to work. Manpower’s senior management regularly communicates news about the company’s diversity initiatives through Twitter. Leading healthcare company UnitedHealth Group organises training modules for its employees on valuing diversity and inclusion. Some of the topics include: Corporate Culture and Diversity and Developing Cultural Proficiency. Another healthcare provider WellPoint prominently features the company’s Diversity & Inclusion site on the company’s intranet. The site highlights monthly diversity posters and provides guides to diversity observances on a calender, every month.
business can channel that into creating the best-fit products and services; or even, identify new areas of opportunity. But, how should one go about doing this? Latha Rajan, co-founder of the leading HR consultancy Ma Foi Strategic Consultants advises companies to induce diversity in the workforce right at the time of planning campus recruitments. She recommends them to focus on getting individuals with different skill sets. “If a
firm wants to hire 10 MBAs, it should go for a mix of different types. They should bring in three to four highly experienced candidates and five or six fresh B-school graduates. Companies should also throw toss up this mix by bringing on board some academic toppers, and others who might have average scores but great communication skills,” Rajan says. This way, you straightaway get diversity in terms of age, outlook, experience, educational background and skill set, she adds. While it is common for companies to hire people from within the industry, say an FMCG firm only hiring people from other FMCG companies (with the same set of people trying to solve the same set of problems over and over again), a new trend sees businesses moving out of their own industries to hire people from associated industries, say an FMCG firm hiring people from an IT company or a processes company. This practice of recruiting people that have varied experiences in different industries helps create a more holistic picture of the business and its impact on other industries as different aspects and perspectives come to the fore. Plus, when businesses expand their hiring net, the chances of recruiting the best and brightest minds is higher and in the increasingly competitive market, talent has become crucial to earn profits than ever before. Here’s look at three Indian business ventures that have successfully leveraged the diversity dividend by exploring different kinds of diversities at their workplaces: Phyical ability-based diversity
According to the World Bank, there are about 40 to 80 million differently-abled people in India—about 3-6 per cent of the country’s population—but due to low literacy levels and misconceptions about their productivity, only a few thousand have succeeded in finding suitable employment opportunities. Vindhya e-Infomedia, a Bangalore-based data management and processing firm, has set an extreme example in creating an inclusive workplace by exploring the potential of this minority. More than 80 per cent of
the company’s 300-people is differentlyabled (mainly orthopaedically challenged or hearing impaired) and to ensure the entire workforce is sensitive to its needs, everyone in the organisation needs to learn the company’s official language—the sign language. Vinhdhya’sfounder, Pavithra YS dismisses any “do-gooder” tags for this practice. Hiring people with disabilities was not a part of the company’s CSR initiatives, she says, but simply a responsible way of hiring people from a community that is deprived of work even though their productivity levels are as good as any. “The number of distractions a so-called normal person has and the number of breaks he or she wants are way too many,” says Pavithra. “In my experience, the level of commitment I have seen in differently-abled person is equal to, if not higher, to a so-called normal person and their attrition levels are much lower.” To minimise a glamourisation of a workplace like this, and make her people feel like they are working in any regular office, Vindhya is planning to do away with wheelchairs in the office and switch to regular swivel chairs, albeit with bigger seats and better handles.
CIO & LEADER FEBrUARY 2012
“Diversity of thought brings in diversity in ideas which helps in better innovation and that is a key competitive advantage for any company,” says Srimathi Shivashankar, associate vice president, diversity and sustainability at HCL Technologies whose role is to ensure that diverse groups at HCL are comfortable enough to express themselves and bounce off ideas to drive innovation. To facilitate cross functional innovation, the global IT firm has an internal contest called MAD JAM or Make a Difference Jamboree where HCL employees from any department pitch in innovative ideas on any area of business—be it streamlining processes, client servicing or cloud solutions. For instance, this year, about 270 idea whitepapers were received from HCLites out of which the company’s infrastructure division came up with the winning idea of an intuitive cloud lifecycle management
How Women Mean Business Until now, no book has offered companies a clear, pragmatic guide for creating more gender-balanced approaches to business. Here’s a brief summary of the four-step approach that the author, Avivah Wittenberg-Cox, suggests in her book How Women Mean Business: Audit: Business leaders eager to effect change often rush too far ahead too quickly. It is very important to ensure first that there is a good understanding of where a company is coming from on this issue, what has been accomplished, and what lessons are to be learned to date, both internally and externally. So, the first part of the book covers the Audit Phase, incorporating three chapters on understanding the issue internally and externally. Awareness: The second phase concerns Awareness, ensuring that senior managers understand why gender balance matters. This section is about leaders deciding what the business case for gender balance really is in relation to the company’s broader strategic goals. Align: Once the leadership is convinced and convincing on the issue, companies are ready to adapt the systemic underpinnings of their organisations by identifying and rooting out subconscious obstacles leading to a more gender-balanced meritocracy. The Alignment Phase is about changing the company’s DNA by embedding new processes and systems in training, talent and marketing. Sustain: Finally, companies need to use clear and effective measures, reward structures, and communications approaches to maintain the change process. This is covered in the last section called Sustain.
framework called MyCloud that enables the organisation to achieve improved service levels and reduced IT costs. This was a solution that an infrastructure division of a company may not typically come up with. Cross-cultural diversity
En Route Media is another technology firm that has learnt to leverage the advantages of diversity at the workplace, albeit of a different kind. The Mumbaibased producers of Flo, an in-taxi digital entertainment and advertising network, hire Singaporean and Vietnamese interns from the National University of Singapore
for five months to work with them. “The fact that they have been brought up in a different surrounding and in a different education system is immediately noticeable in team discussions. They are usually not “yes-sayers” and challenge the status quo from day one. This helps bring different perspectives tothe table,” says Paul Schwarz, co-founder of En Route. Although, there are certain practical downsides of hiring cross-culturally, cautions Schwarz, as some of these interns have strong accents when they speak in English which makes it difficult to employ them in roles that demand client interaction. —Ira Swasti JANUARY 2013 | INC. | 5 3
Bon Appétit Will Asvin
Simon’s recipe of indigenising western style fast food tempt investors?
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Photograph by SUBHOJIT PAUL
Asvin simon Location:
Across 13 states in India, and one outlet in Doha, Qatar Pricing:
From `29-`359 Employees:
Projected turnover for 2012-13:
Funding sought for:
Opening up 500 outlets in India and build overseas presence
Elevator Pitch Bangs serves Indianflavoured fast food products. Will investors have an appetite for `30 crore? The Pitch: “Driven by increasing disposable incomes and exposure to
western cuisine, the fast food market in India stands at `8,000 crore today, and is growing at a CAGR of 35-40 per cent annually. In fact, there exists a tremendous scope for expansion in the underserved tier-2 and tier-3 cities. Understanding this market potential, we offer western fast food items such as burgers, pastas and wraps, and Indianise them to suit the palate of customers in smaller cities who wish to enjoy global products but want the taste to be familiar. So customers can savour our chilly and coriander flavoured chicken, or wraps in makhni gravy. We revise our menus every six months, and launch special delicacies to coincide with regional festivals. We have ambitious plans of opening 500 outlets across the country in the next five years.”—As told to Neha Gupta
The Experts Weigh In CONTROLLING COSTS IS KEY
stick to the same cities
The idea of serving Indian-flavoured fast food is good but to keep the business profitable and scalable they need to keep all cost factors in mind. Bangs will need to carefully manage infrastructure costs (supply chain and real estate) if it wants to be a multi-city player. As it grows, it will need to minimise their cash burn by increasing their daily revenue per outlet (Indian and international benchmarks for break-even points is $2,000/outlet/day upwards). Also, indigenisation and keeping the price point low can make people walk into the outlet for the first time but a great experience will convert them into repeat customers.
The strategy of setting up in tier-2 and tier-3 cities lets the company avoid major competition from multi-national fast food chains, but that could change in the future. However, I’m concerned about the high food cost (40 per cent) which shouldn’t be more than about 33-35 per cent and that means they need to pay more attention to menu composition. The current turnover of `18 crore across 35 outlets is a daily sale greater than `15,000, not quite as per projections. It may be more profitable to open more outlets in same cities than to expand to others because it lowers material costs and improves efficiency.
SORABH GUPTA, partner Bedrock Ventures, Delhi
MADHU MENON, chef and food consultant, Bangalore
get THE PRODUCT RIGHT
Any QSR model is product driven as there is no experience attached, unlike dining. For Bangs, it will be extremely critical to derive a product which is widely accepted. As a QSR chain, most of the food needs to be standardised. So, striking that balance—between standardisation and local delights—is very important. Menu offerings are another challenge along with the consistency of delivery, as the diversity in food habits is very evident in the Indian market. Having said so, standard offerings would make sense, as nowadays the urban Indian travels and is aware of the standard taste, making it difficult for operators to take the plunge. PROSENJIT ROY CHOUDHURY, CEO Barbeque Nation, Mumbai JANUARY 2013 | INC. | 5 5
Being Inspired The impact Ujjivan makes on the lives of the working poor keeps Samit Ghosh going.
In the three decades he worked for CitiGroup and Bank Muscat, Samit Ghosh picked up every nuance of the banking business. That experience along with his family background (of being born in a middle-class family where he saw his parents’ fortune change with the 1985 revolution in the financial services industry) made Ghosh want to move to his next professional challenge, of making financial services available to the working poor by providing them loans. He founded Ujjivan Financial Services, a microfinance venture, in 2005, and in the past seven years, it has disbursed more than $580 million among a million customers. Interestingly, Ujjivan has also won the Great Place to Work award three times. Ghosh’s secrets to making that happen are simple— don’t work after office hours and ask employees to go home on time. As told to Ira Swasti | Photographs by Srivatsa
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The Way I Work | Samit Ghosh, Ujjivan Financial Services
“We hire people based on referrals fromour customers, and not just employees.”
I have three dogs, a German Shepherd, an Irish Setter and an adopted street dog that wake me up every morning around 6-6.30am. I can’t stay in bed after that because I have to let them out for a walk. After getting ready, I recharge for the day by lounging in the huge terrace area in my house in Whitefield, Bangalore that has a beautiful view of large green trees, for about half an hour to 45 minutes. This is the time I relax, have my breakfast and think about the day with owls and squirrels as my companions. My family is not an early riser like I am so I usually have my fixed breakfast of oat cereal with dry fruits and a glass of lemonade with honey in it, with my dogs who’re back home after their walk by then. I have three children but I get to spend maximum time with my eldest daughter. She works for our company’s foundation, Parinaam and we leave for office together around 8.15am. In the car, I try reading the newspaper if I’m not busy admiring the greenery outside. I reach office around 9am and the first thing I do is try to get my personal obligations JANUARY 2013 | INC. | 5 7
“I ensure that communication in the office is as open and healthy as possible.” such as paying bills out of the way before I get on with official work. Once that is taken care of, I start my day by checking e-mails on my laptop. I get about 150-200 e-mails a day in my inbox, 30 per cent of which are usually junk. Earlier, I used to get mails on my phone too but then they started chasing me 24 hours of the day, seven days of the week and I decided to get rid of that. Now I prefer to check mails on my own time instead of having them chase me. I usually keep my mornings open for one-on-one meetings with my staff, where they update me about the latest happenings in their branches or talk about various issues they’re facing in their regions. These are more like casual conversations or chats than meetings with my teams because I like to make sure that communication in the office is as open and healthy as possible. Having worked in a corporate environment for 30 years, I have been trying to do away with the backbiting and politics that comes with opaque communications systems in place. Here, when a person does something well, we emphasise on sharing his or her secret of success with all the teams so that others can learn from it. There have been many incidents where our people have gone beyond their line of duty to help our customers. These stories are very inspirational for others in our teams. For instance, once our branch staff took complete care of a customer who was suffering from tuberculosis, admitted her children to an orphanage and even handled her last rites because her family couldn’t afford to. Another time, some thugs tried to snatch the cash bag that had all the cash collected from one of our operating areas. Our field agent was dragged for 15 metres and got hurt, but didn’t let go of the bag. Now, that’s incredible. 5 8 | INC. | JANUARY 2013
Sometimes, senior members in my team prod me not to share dangerous instances of attacks fearing that other staff members may get scared on hearing them. But I believe open and transparent communication in an organisation goes a long way in gaining the trust of employees. When we tell our employees about these attacks, especially in crime prone areas such as Western UP and Bihar, we talk to them about ways they can protect themselves and how we will help them. This helps assuage some of the sense of insecurity that could have crept in otherwise. Over the years, we’ve realised that the best protection of our staff is only possible with the help of our customers. Normally, the bad elements that attack the field staff are from the same locality. So we make sure we verbally emphasise that we are working for their good and our staff needs to be protected from any kind of attacks. ut, building trust around financial
issues among the working poor living in urban or semi-urban slum areas takes time. What helps a lot in this case is constant communication and being open with them from the very beginning till the end. That way, they open up faster and relate to you better, too. So not just my field staff, but on my part as well, I ensure I visit each of the regions (north, south, east and west) where Ujjivan operates in, atleast once in three months. I wish I could do this more often but visiting each of the 299 branches across India is not possible. Visiting customers, interacting with them and listening to their issues is the favourite part of my job. It also helps us to get direct feedback on our loan issuing procedure and our business in general. On my last field visit to Tamil Nadu, for instance, I asked customers what
they believed was an acceptable waiting period for a loan to get sanctioned. They all said seven days. We communicated that to our staff, and worked to change our processes to make sure we had the ability to disburse loans in that seven-day time frame. In fact, to infuse more enthusiasm into this initiative, we started a contest within our organisation to reduce the turnaround time where branches that managed to give out loans within seven days won cash prizes. This is not the first time we organised a competition among our employees to keep them motivated. Before this, we did an internal competition where employees were encouraged to get back old customers. In microfinance, like any other business, what happens is that some customers who had taken loans earlier drop out of the programme or sit idle, so the contest was to understand why they left, resolve their issues and get them back as new customers. Employees who Opening Up Ghosh’s favourite part of running Ujjivan is when he gets to visit got the maximum number of old customers won cash and interact with his customers, and get their feedback on the company’s loan issuing processes. He does that at least once every three months. prizes worth thousands of rupees. A lot of time, in order to meet targets and deadlines at work, people tend to work on weekends and holidays. But I have always believed that if you work efficiently, you should be to form a group and come back and see us. Then they go through able to complete your work within office time and go back, except a training programme, basically an orientation into microfinance some peak periods at the end of the month when loan collections where they learn about the terms and conditions, what we offer take place. So, we have a rule in the office where if someone wants and what kind of disciplines they need to follow to repay the loan to come and work on a weekend or on a holiday, he or she needs my in time. After this, they are taken through a test, and if they clear special approval. That deters people from doing it. that, they are inducted into the programme. It’s sort of a literacy I used to think that the work of a field agent at Ujjivan is a dif- programme about microfinance where the loan takers know what ficult job in a difficult environment. But when the team from the they are getting into before they get into it. Great Place to Work Institute came and did the survey of our I am very strict about my work timings. Most days, I leave office employees’ engagement and motivation levels, they found that by 5.30-6pm in the evening and so does most of the office. I’m very their biggest motivating factor was actually the work they do and strict about the timings my staff keeps. If an employee is staying the impact they can see on the lives of the working poor. Basic overtime, beyond say 7pm, a report arrives on my desk the next hygiene factors such as paying salaries on time, providing good morning informing me about the same. I normally talk to the increments on time and other HR management factors play a sig- supervisors in that case to know the cause because working overnificant role, of course. But, it’s the above sentiment that differen- time is taken as a negative, not a positive. I admit there are some tiates this job from others. departments like finance where however much I try, people just Of course, bringing the right people in is the primary key to want to come late and leave late because they prefer working in the creating that culture. We have a unique hiring technique to ensure evenings. I don’t have an issue with that but I don’t want to encourwe only hire people who are comfortable working in tough envi- age it personally. ronments such as urban slums. So, instead of just hiring people As I reach home, I relax, have tea and then hit the gym or go based on referrals from existing employees, we ask our customers swimming on a good day, along with my daughter. My family and to refer potential candidates to us. There are several cases where I are huge fans of the MasterChef, so after I come, we religiously the mother in the family has taken a loan from us to run a small watch that show together at night. When you run a business, it’s a business, and her son works with us as a field agent, collecting 24/7 job, it’s always there in the back of your mind, so after some those loans and educating others about our services and how to quality family time, I am back to checking my e-mails and then hit make use of it. Customers also have to go through a whole screen- the bed by 11-11.30pm to be ready for the next day. Even on Suning process before we do business with them. When we open a new days, after enjoying some cooking with my wife Elaine, in the branch in a locality, each branch manager or field representative evening, I list down all that needs to be accomplished at work the go street by street wherever the poor are, and explain to them what next week. It’s not difficult to be motivated when you work in a we do, how they can avail our services, and how to form loan business like Ujjivan where you can see the direct impact of your groups. When these potential applicants come to us, we ask them work. It keeps you going. JANUARY 2013 | INC. | 5 9
I wish I knew then...
Paras Shah, founder and CEO, Neoteric Infomatique
Growing up in a Gujarati business family, entrepreneurship was in Paras Shah’s veins. After completing his engineering from Case Western University, USA, when Shah returned to India in 1991, he was keen on bringing international technology standards to a nation which had abysmal PC and internet penetration back then. Thus was born the Mumbai-based Neoteric Infomatique, an IT services dealership. Over the past 21 years, Neoteric has grown into a `1,800-crore national IT distributor with 55 plus branches and more than 700 employees across 500 cities. Here, Shah talks about why a prudent businessman is one who keeps his emotions at bay in the office.
I hail from a Gujarati business family where both my parents always motivated me to have a never-say-die attitude and an indomitable spirit when doing business. My father instilled in me the penchant for undertaking calculated risks and embracing new challenges. It was this upbringing which inspired me to start Neoteric in 1991. I’ve been lucky to have both my parents as guides and mentors to me in business—my mother taught me the value of delegating both responsibilities and power. While running Neoteric, though, I realised that just empowering your employees to make decisions isn’t good enough. As a boss, one has to make sure that action and thought isn’t just driven by you, but to have a culture where employees are proactive, and motivated to grow the company. To be able to do this effectively, one needs to be careful to keep emotions aside. In the first 10 years of Neoteric, I didn’t do well on that count. My emotions reflected in my professional decisions, especially when the decisions were about people who had put in long tenures in the company. I found it difficult to segregate between personal and professional relationships. I liked being a “nice guy”, and would feel great when colleagues said that about me.
6 0 | INC. | JANUARY
properly—solely, on the basis of their competence. Once I realised that, it was important to change. I ensured that my emotions took a backseat, even when it meant letting long-serving employees go because they had become roadblocks in the company’s growth. This wasn’t easy for me. In fact, letting such people go was one of the toughest decisions I had to take in my 21 year-long business journey. But, change is really the only constant. It’s the golden rule—adapt, or perish. Now, we try to bring on board the best people from the indusReining In Emotions Paras Shah has learnt not to let try to mentor Neotericians, and his emotions dictate his professional decisions. make sure their decision making powers are aligned with action. For instance, Dr R. Srinivasan, an But, I realised soon enough that this XLRI alumnus and an expert on diverse nice guy image was proving to be a hinindustries such as oil and gas, IT, steel, condrance when the time came to make cerstruction and consumer goods etc. has tain big decisions for the growth of the been an HR consultant with us for the last company. Some senior team members— 10 years. We constantly try to make Neothose who enjoyed both decision-making teric the breeding ground for the best talent powers and their colleagues’ support— in the industry. —As told to Ira Swasti were simply not taking decisions that would give us a lead in the industry. Plus, my emotional attachment to them was clouding my ability to evaluate such people
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