Saturday, March 28, 2009

From Strategy to Operations:- The curious case of Benjamin Button....

The title sounds strange enough, but when you are subjected to a long and boring movie, you ought to think of strange things. 3 hours wasted but an important analogy made: Between Benjamin Button & the process of creating operational plans from strategic plans in order to execute your strategy!

The film shows Brad Pitt being born as an old man and living his life growing younger. He relates events which for him had already happened. Now imagine you, as an organization, are standing at the end of a long time line - you have already achieved your strategy. Imagine, how did you do it? What actions did you take? What resources did you secure and how you deployed them? Which products/markets/segments did you serve? How did you secure finance? What was the reaction of the market & shareholders? And many such questions depending on the industry.

Ask these questions in a stepwise fashion starting from the end. What was the last significant thing you had to do just before reaching the goal. Put that on your timeline. And just before that, what did you have to do? And just before that? And so on, moving closer and closer in time, right up until the present.

Working backwards from the realization of the goal, you have developed a timeline, complete with milestones & contingency planning- working from your collected knowledge and scenario creation, but not necessarily from your conscious mind. The Method can be a way to generate set of tactical actions to realize your business strategy. (Sounds too easy in the writing, but offcourse in real life, there will be lots of other things involved. Especially in case of corporate strategy, if an operational planning exercise is being done, then there will be lots of scenarios & games being played between country/functional BU 's and the corporate office.)

For a reality check, think it through forwards. If you add the necessary resources, skills, and knowledge, take each action in turn, and reach each milestone, is that likely to produce the results you intend to produce? (Biblio Paul Lemberg)

Does that mean that Strategists need to be prophets? Offcourse not:- No one can predict the future. ( This reminds me of one of my 'unpublished' posts: "What the heck is strategy?" Soon to be finished and posted). But an organization can start from the place where it wants to be and systematically work backwards to the place where it is. Afterall, that's one of the things a strategist does: Bringing structured thinking in the top tier of an organization.

Friday, January 30, 2009

Absolutely Amazing!

Watched 'Swades' once more today.... What a movie..... what sensibilities... sheer heart-warmer!
.... 'Yeh taara woh taara' , 'Yeh jo des hai tera....' These songs in particular are masterpieces. It's so touching.....

Love it...!

Saturday, December 6, 2008

History Repeats... and how..!!

Consider the Following (A random article which I read somewhere) :- 

" Our youth now love luxury. They have bad manners, contempt for authority; they show disrespect for their elders and love chatter in place of exercise; they no longer rise when elders enter the room; they contradict their parents, chatter before company; gobble up their food and tyrannize their teachers."

Who said the above?

I am sure each one of you must have come across similar lines at one point or other.

Those of you who have grown-up children may have said the same things to them. Our grandparents may have similar opinion about today's generation. But have you ever wondered when this statement was first recorded?

Any guesses on the year?

No, it's not today... and not even 20 years back. You have to go back very far away in history to trace it. It is 2,400 years ago that the great philosopher Socrates (469 BC-399 BC) made this statement. 

Amazed, perplexed, bemused, shocked?

I'm sure you are.

But that's the way it is. Human nature and emotions remain the same irrespective of the era one is in.

History Repeats... and how..!!

Wednesday, October 29, 2008

Strategic Planning

McKinesy on Strategic Planning:

1° Creating prepared minds

2° Enabling creative accidents

- Bottom up strategy experimentation

- Top down strategic initiatives

Wednesday, June 4, 2008

Private Equity LBO's Vs. Venture capitalists : Fundamentals

  • Private equity firms will focus on turnarounds by buying distressed debt, file for protection from creditors under insolvency law, and lead a restructuring. Venture capitalists will historically invest in seed stage fundamentally strong businesses.
  • PE's will change the existing management and hire either a consulting firm or their own team to act as top management in the interim. On the other hand, VC's obviously believe in the entrepreneurs whom they funded and hence they dont alter with the operating management but they generally sit on the boards of such firms.
  • For the PE, an exit will generally mean appointing a permanent top management and either sell it completely or partially to achieve a target of anywhere from 15 to 80 percent returns. For the VC, an exit generally means taking the firm to a successful IPO and venture out with similar returns.

Wednesday, May 21, 2008

Voice of Numbers

Ask any doggedly working Business school student about which are his 3 silent killers and if s/he is seasoned enough, the answer will come pat: Balance sheets, cash-flow stmts and income stmts. Well, there are many others as well , but these three innocent looking tables are sure to give you some headache.

I am emphasizing on "Innocent", because thats what you feel like when you take that nice looking annual report in your hand. You see some smiling faces on the cover page which has lots of colors in it and also some artwork. (Reportedly, one Paris based Big technology consulting firm even hires famous French artists each year to contribute glamourized sketches on its annual reports.) The numbers look all rosy at first sight with double digit growth in everything. So you think, wow, here are the numbers, divide everything by everything else to get your ratios, go to your library to access Moody's and compare your numbers with those of the analysts. Done!

Is there only that much to it? Yes, for the starters.....But then you receive an assignment which states " Please write a report on the Strategy of *** Inc. and critically comment on the management's moves". What the heck !

After ruffling a bit and dawning yourself with the realization that those numbers were just the upper layers, you start worrying. Let's think a bit more about these in an analogical manner. Just compare it with Cricket. On any old cricket ground, you will find a big wooden scoreboard and 2-3 scorekeepers. They hang & sit on that scoreboard in order to keep changing the wooden number plates whenever a run is scored. If there's a dull phase going on in the match and not much changing of the wooden plates is required; those boys also fit in their faces through the holes meant for the number plates and look animatedly towards the whole stadium. Basically speaking, the dumb accountants are just those boys i.e. the scorekeepers who mundanely update the numbers on the wooden manual scorecard. The real match is going on in the dressing room i.e. in the corner office. And the special benefit which is enjoyed by the corporate matches is that you can always manipulate those scores sitting right in the corner office! You can always order your dumb accountant to shift numbers, manipulate depreciation rates et cetra and most of the top management in the world does this.

So, you have just been asked to scratch those bald skulls and write a report on their strategies 'to critically comment on the management'....... Best of luck.....

You have already finished reading each and every number on it and have dug your nose into the Notes section as well. I told you, there's more to those innocent statements. You end up eating, drinking, living and cursing those 3 innocent tables.

Best wishes once again..! Tommorrow is the deadline for your assignment! Spend your night scratching those bald skulls a bit more. In between that, write a blog post to curse the situation.....
But during all this time, keep your ears open : Those numbers might just whisper something to you in a bushy voice.....

Happy hunting the numbers!

Friday, April 11, 2008

Cross cultural observations

I was just reflecting on some of my experiences of working with people of different nationalities. In the past one year during my MBA, I got a chance to work & study with various people from around the world. Out of around 45 nationalities in the school, I must have worked closely with atleast 15 nationalities (until now) during some case-study or in the class. And this has been a real eye opener to the kind of cross cultural team issues which might face an organization. Even in daily life, its just so exciting to see the reactions of people from different nationalities & cultures on the same issue..... You can be almost sure that in a case team of 6 people with 6 nationalities; you will get radically different reactions on the same issue being handled.

That's when we realise that 'Diversity' is not just a buzzword; you have to experience it to know its power. If you want to be a global organization, you need to have a diverse and global workforce: It's as simple as that!

Just compiling a brief summary of what I observed. Some of these observations are positive & some are negative. May be I am quite wrong in judging those people while saying some negative things about them. It is also true that what I observed may be a peculiar characteristic of that particular person and cant be applied to the whole culture of the nation. So this is not about generalization, it's just an observation....

  • Germans: Very friendly people. They are analytic, extremely organized & structured (in thinking, behavior & working style). Will be eager to start the conversation. They are quite straight-forward without showing unnecessary diplomacy. Overall nice human beings.

  • Italians: Will crack jokes in situations when you dont expect to even think of one. Italians are famous for their laid-back attitude and I won't disagree with that either. Another peculiar thing I found is that these people feel they belong more to their respective city than to their country. "Italy" is a concept which probably isn't as important for them compared to Rome or Venice or Tuscany and so on......So, if you happen to meet a girl from Milan, make sure you dont praise Paris being the fashion capital of the world, it's offcourse Milan :-)

  • British: Mentally tough people and generally they still love India. A typical British (as the French will tell you) "eats his chicken with sugar...". No comment there- I am a vegetarian....haha...

  • Chinese: Believe it or not, the Hindi-chini bhai bhai stuff really seems true. We do feel a kind of synergy with chinese people though there is no similarity at all. May be being 'Asian' seems to unite the feelings.

  • French: How can I not talk about my hosts... French people(& Europeans in general) are pretty much relaxed about life. They are a lot subtle when it comes to attitudes. I am trying to limit this blog-post only to cultural and behavioural aspects and hence wont divert into other things. A separate blog-post on France in general is due short anyway.

  • Georgians: I am sorry guys, but you people are a real pain to have in any team. Its been twice that I have worked a case-study with georgians and both times I found the same thing.

  • Russians: Same like Georgians. No wonder Georgia was a part of USSR. I just cant understand the wavelength of these people. Coupled with that they have big egos (I wonder about what). They will never agree with you for anything and keep proving that what they are suggesting is the best option. And god forbid, if you have more than 1 Russian or Georgian in your team, be sure that they wont let go a single chance to start talking in Russian and crack jokes amongst themselves. I really feel sorry for posting such a strong comment about these people, but cant help to write otherwise from firsthand experience.

  • Irish: I had previously heard lots of jokes about good-old Irish people, but I found them really friendly. Careful listeners and good thinkers. Nice to have in any team.

  • Americans: Easy going people. Though an average American doesnt know that there exists a world outside the states but the ones I came across here were a lot better.

  • Azerbaijani: This is a small country in Middle east Asia border and I just came across one person from there who is in my class. Friendly and analytical.

  • Swiss: As this community consists mostly of Germans & French, so they carry the same European characteristics.

  • Mexicans: They not only look like Indians, but also quite similar in characteristics. Long live BRICM ...! And most importantly, their 'tortillas' are a life saver for roti-craving Indian tastebuds :-)

  • Brazilian: Lazy is the most apt word I can think of about the brief interaction I had with a Brazilian in my school. He was in the previous year's MBA batch so cant tell much.

  • Romanians: You can listen in peace when Romanians do all the talking..... Offcourse this couldnt be true for all Romanians but my experience is that they are compulsive talkers. And dont bother to ask any Romanian about which undergraduate school do they come from. Because you are sure to get the same answer :- "Academia de Studii Economice Bucure┼čti" It sounds very strange, but probably whole of Romania completes their high-school and bachelors studies in this one university....

  • Japanese: Peaceful, hardworking, sincere, friendly. But I have come across only one and she too is not a pure Japanese but a French-Japanese. So this remains an unexplored species.

  • Dutch : Easy going and so much like Germans. The legal status of M***juana in Amsterdam might be a good proof of the easy going nature of the Dutch... haha :-)

  • Scandinavians (Swedish & Finnish):- I don't know why, but the scandinavian people ooze entrepreneurship (or may be I came across only those scandinavians who were entrepreneurs). Cool customers overall, but a bit selfish sometimes.

  • Indians: I am not saying this just because I am an Indian, but believe me, we are one of the best species around. (and this is others opinion, not mine. And it is a general opinion about Indians and does not apply to anyone in particular). Highly Intelligent, excellent listeners, good team players & numerate, we are like the dream people to have in any team. But I really wonder why this attitude mostly comes through only when we are outside our country ? What happens to our attitudes when we are in our country? Why we try to run a rat race there?

(Later addition:- Although the above opinion about Indians is true in a setting such as a Business school, but when you come across a local guy on a street in a western country, he/she still has in mind many stereotypes about India.....for ex:- many such people still associate India ONLY with Taj Mahal, Bollywood, spirituality, spicy food, elephants, cows, BPO's or more recently, a 'Slumdog Millionnaire' ... Do these things really do justice to representing one sixth of the world's population?

While the answer to that question is a vehement 'no', unfortunately, Indians have to deal with such stereotypes of India, be it in their professional lives or social settings, while interacting with atleast a section of 'westerners' if not more......You have to be always ready with a voice-tape recorded on your tongue to tell them that one cannot really 'know' an Indian by the above stereotypes or by watching bollywood movies.....!

  • ??

Friday, February 15, 2008

Congratulations TATA …For completing the acquisition of LandRover & Jaguar….!!

Last 6 months have given a new strategic direction to Indian business and Tata’s have been at the forefront of it. First it was the launch of the nano. I cant count how many of management principles learned in theory can I apply to this move….It’s a disruptive innovation, low end disruption, creation of blue ocean, process reengineering, basing the model on variable costs with a low breakeven blah, blah, blah….

Busting the jargon aside and saying it in a simple sentence: -It’s the dream of a nation above all…! Before some days, I was just reading an informal interview of Ratan Tata with a McKinsey partner and I cant help but applaud the clear vision the guy has! It is hard to believe, but he is making a peanut margin of 70 Euros per model sold of the Nano. What’s in it for him then?

A ‘dream’ for the starters….. In his own words, “……[Today] in India, you often see 4 people on a scooter: A man driving, his little kid infront and his wife on the back holding a baby between them. To say the least, it’s a dangerous form of transportation. If we can make something available on four wheels-All weather and safe then I think we will have done something for that young mass of middle class Indian…..”

Bravo for the dream..! But does that mean that nano is a ‘Glorified scooter’ at the best..?? Well the initial reactions after the unveiling at the auto expo didn’t expressed so. Besides the dreamy side, I also wonder the immense brand publicity tata’s got on this issue! The world media took an extensive note of it and personally speaking, people from different countries in my school know it. Infact one of my German friend has even finished his research paper on Market entry strategies in Indian automobile sector and he concluded by indicating Tata nano as the biggest barrier! He strongly feels that Tata’s should forge joint ventures with European manufactures to set up entities in Europe for producing nano here. This comes from the citizen of a country soaked in the BMW culture and when you hear this, you know that India has arrived big time!!

I can see similar strategies in France adopted by Renault and infact Renault has big hopes pinned on India for their low cost cars (It’s different matter that in India, they are positioning and promoting Renault as something luxurious, which is a joke actually.) Carrefour, too is entering India with big hopes, but let’s keep it aside for this post as it will pull the topic out of sector.

What I am curious about at this stage is how the Tata’s will manage the brand conflict arising out of LandRover acquisition and their own core competence. It’s the thing to see in the next six months, and I will happily oblige to analyze their management style at the end of that period. Dot.

Monday, January 28, 2008

Lean Banking....anyone?

Well, I am always amazed by these 1 room, roadside banks in France…. This is a branch (agency; as they call it) of LCL (Le credit lyonnais: if I got it right) bank just down the road from my place. Accepted that it’s in a residential area, but still how lean can it be? And despite that, you can do almost everything in the branch may it be International wire transfers or opening an IBAN.

To my amazement there are only 2 people working there and one of them is the branch manager. The other guy is a one stop shop for everything starting from exchanging Forex to learn signing a French chequebook (Yes, it’s different). He is always cheery and ready to help. If you drop in to take a look into the branch manager’s area, she will offer you some chocolates and some more help if you want....! Each French bank & many public offices have a bowl on the employees table’s filled with candies & chocolates and you can help yourself while the guy is stamping your tc’s.