Friday, 30 January 2009

Great leaders have great teams- Stefan Stern, FT

Leaders cannot do everything on their own. Leadership has to be “distributed” around the organisation, through delegation and the development of future leaders.

We thought this was very interesting, on leadership...reproducing it here with permission. (Published: January 12 2009 20:33 | Last updated: January 12 2009 20:33
"Copyright the Financial Times Limited 2009".

“The history of the world is but the biography of great men,” said Thomas Carlyle, the 19th century writer. The business world feels much the same way about the supreme importance of the leader. Chief executives are scrutinised endlessly, the work done by their colleagues much less so. Big mistake.

Steve Jobs is unwell. This fact has created great anxiety for Apple’s customers and shareholders. Could the company survive his departure? The question is being asked in all seriousness.

Mr Jobs attempted to calm nerves by issuing a statement ahead of last week’s Macworld conference in San Francisco, giving an explanation for his non-attendance this year. He was suffering, he explained in a brief open letter, from a hormonal imbalance that was causing him to lose weight rather dramatically. He had been successfully diagnosed and would be better soon. Unfortunately, this statement, while it may have cleared up the medical uncertainty, did nothing to puncture the cult of personality that surrounds the Apple boss. If anything, it gave it another boost.

“I’ve decided to share something very personal with the Apple community,” Mr Jobs wrote in his letter. Then came the medical bulletin. But the best was saved till the end. “I have given more than my all to Apple for the past 11 years now,” Mr Jobs said, in an unconscious reference to the Financial Times’ own “Mr 165 per cent” Martin Lukes. “I hope the Apple community will support me in my recovery and know that I will always put what is best for Apple first.”

Finally, there was a Greta Garbo-style sign-off: “So now I’ve said more than I wanted to say, and all that I am going to say, about this.” With a puff of smoke he was gone. (I’m a PC, by the way, not a Mac. Could you tell?)

I am delighted that Mr Jobs is not seriously ill and is receiving the correct treatment. It is the health of his company that concerns me more – indeed, the health of any company that hangs on the latest words, thoughts or actions of a single great man. The newspapers are full of the names of formerly great men who have now fallen to earth. Bernard Madoff was an investment hero, a one-time chairman of the Nasdaq exchange, favoured by distinguished clients such as HSBC and Banco Santander, as well as by charitable foundations supported by the newspaper proprietor Mort Zuckerman, the film-maker Steven Spielberg and the humanitarian campaigner Elie Wiesel.

B. Ramalinga Raju, founder and former chairman of Satyam Computer Services, India’s fourth-largest software company, was until last week one of the world’s most highly regarded businessmen. He won Ernst & Young’s India “entrepreneur of the year” award in 2007. He has now confessed to falsifying his company’s accounts over an extended period.

The Royal Bank of Scotland had been seen during the past few years as an all-conquering giant, and its former chief executive, Sir Fred “the shred” Goodwin, as a minor genius. Nothing criminal has gone on here, of course. But the €71bn acquisition in 2007 of ABN Amro has now been exposed as Sir Fred’s final folly.
Journalists, who have provided much of the running commentary on these and other stories, are not innocent bystanders. We have helped to build the reputations of those we now seek to destroy. But “news is people”, as the great newspaperman Sir Harold Evans has said. We are bound to describe complicated businesses through the personality of their leaders. We can overdo it a bit, though.

It should go without saying – but it doesn’t, quite – that leaders cannot do everything on their own. Leadership has to be “distributed” around the organisation, through delegation and the development of future leaders. No one should ever be truly indispensable.
Teams matter as well as brilliant individuals, as the England and Wales cricket board has just been reminded. Its superstar former captain, Kevin Pietersen, lasted only five months in the job before an unhappy dressing room forced him out last week.
Of course we need great leaders. Perhaps we are about to get one. Expectations could not be any higher for US president-elect Barack Obama, who will be sworn in to office a week from today. But it might not be a bad idea if, at the inauguration, someone were to read out these lines from Bertolt Brecht, the German poet, in which he questions how great some of the great men of history really were:

The young Alexander conquered India.
On his own?

Caesar defeated the Gauls.
Did he not even have a cook with him?

Philip of Spain wept when his Armada
Went down. Did no-one else weep?

Frederick the Great won the Seven Years’ War.
Who else won it?

On every page a victory.
Who cooked the celebratory feast?

Every ten years a great man.
Who paid for him?

So many stories.
So many questions.

Our thanks to Stefan for allowing us to reproduce his note.

Thursday, 29 January 2009

IFB targets the young working woman

We came across this ad by IFB (appliance maker) in a magazine yesterday.
What struck us was the target. Young/ working woman. The message stands out from the clutter in the home appliances market.

Traditionally the Indian white goods market has targeted the housewife- or a woman in a "household" situation...planning for parties or worrying about her kids playing in the mud and dirtying their clothes.

The theme has been of keeping the family well fed/ or the kids clean/ or the husband promoted.

IFB targets the woman in her office. And the fact that she can fully concentrate at work knowing that the IFB appliances back home will keep her in command on the domestic front as well.

We have not seen this execution in other media. And we think it is unfortunate.

A large number of young women are entering the work force in India today. Their segmentation- targeting and positioning seems spot on.

Hopefully they will build on this and ensure the message is well communicated.

The concept stood out amidst the clutter.

Ritu and Venkat

Thursday, 22 January 2009

Some pricing notes

We visit an interesting blog called Pricing for profit.

Two notes that i wanted to link here are :
1. Foru pricing strategies in a recessionary environment. Our caution to this is simply that this would apply to a wide range of products, we would not advice premium brands to follow any of these suggestions.

Rebates/ volume discounts/ free gifts etc work to increase volumes without lowering the value proposition for most mass market goods. But anything given free once sets up the expectation of future offers.

In a mass market product, the frequency of purchase and the price of the product help to mitigate these expectations. Not so for premium products.


2. The second note is on a bit of research that "A Beautiful Woman Can Affect Men's Pricing Decisions"

This has interesting applications especially for the personal loan business. But perhaps would not apply as well in markets with more easily available information.

ritu and venkat

Sunday, 18 January 2009

when young india learns to keep its b#lls

This sentiment may have appeared before, but we felt it is worth recapturing again. While a lot of companies in India have gone into cost cutting mode, many others continue to see growth and are investing in new ventures. We hail these companies.

And ask young India to not lose self confidence. Our size matters. And our poor population needs many more products and solutions. We have our own markets to satisfy....growth is only limited by our imagination.

The stock market tanked from 20,000 levels in 2007 to 8000 in sep 2008.

In this period, India continued to have 1.2 billion people and approximately 200 million households.

India has 8 cars per thousand of population (this is closer to 400 cars per thousand in developed economie).

Penetration of color TVs at 32%. Penetration of washing machines at 8-9%.

Penetration for microwaves in the kitchen is at 1%.

With such a huge unmet demand for every imaginable product category, growth in the economy is limited only by our self confidence and imagination.

Companies like Nokia and Airtel (Bharti) have grown and will continue to grow at break neck speeds. Because they are designing value for the millions of indians who have an average per capital income of USD 1000. A phone call in India costs 3 cents.
A Nokia phone costs 35 USD.

At 25%, India's penetration of mobile telephony is far ahead of any other household equipment category.

Why dont we se more innovation in TVs/ Fridges/ Washing machines that take these products to more households? Why does not the NANO inspire us further?

Why is is that foreign investors shatter the dreams of the common man by pulling our billions of dollars overnight and crushing the stock market by half? (and hence the investments of the common man?)

Why have we not yet learnt to bring in the millions of Indians living in villages and small cities into the "investor" fold? What innovations need to happen so that even a Rs 100 investment per month (4% of per capita monthly income) can be sucked up by financial institutions?

Why must we continue to look to the west for our economy's growth?

India understand's its markets and its people best.

Why should we not think of satisfying India's needs rather than worry about how deep the American recession will be?

Should not each employee in each company in India today ask what he has done to ensure that one new household has come closer to buying his product?

Ritu and Venkat

Tuesday, 13 January 2009

Your ipod, my Polaroid- Convergence and Miniaturisation

Thats the title of an article by Elsa Dorfman that i cam eacross on the Internation Herald Tribune.

Elsa laments the decline of Polaroid and its decision to no longer make instant film. She compares Polaroid in the 60s and 70s to the iPod of today.

But the most beautiful question she asks is why the legions of MBAs generated in the US could not save the instant film business.

I know little about the Polaroid to respond to her. But i would like to assure her that it will not be the last time an iconic brand gives up its traditional (original) line of business.

Nokia. They have a phone/ music player/ torchlight / radio all built into one. No one in rural India buys a torch anymore. Nor a radio player.

Apple went a step further and built style into the above mix.

The day is not far that my Apple iPhone will be the size of a wristwatch. What then will happen to Casio, Swatch or these guys in the wrist watch business?

The world will seek convenience. And it will continue to search for the one device that rules them all. Technology will make it possible to dream smaller more powerful devices. Companies that stop seing convergence and miniaturisation of their businesses will go the Polaroid way. Sony would vouch for that.

Convergence and Miniaturisation.

Ritu and Venkat

Monday, 12 January 2009

Goldman Sachs and what i always suspected about Marketing

Marketing is dead. So dead in fact that folks are begining to confuse "communication" with marketing.

GS is looking for a marketer with “15-20 years of experience creating…multinational marketing programs” who will, in the first year on the job, “actively participate, collaborate, and shape a messaging and brand strategy reflects today’s dynamics and the firm’s leadership role in helping to define it.”

Marketing is the act of Segmenting the market/ targeting a consumer and positiong a product/ service.
It rests on Product/ Pricing/ Place (distribution) and Promotions (as necessary).

A CMO must have control over each of the above elements. Most importantly, a CMO must control product pricing. Whatever be the product/ service.

Pricing is the most definitive proof of the marketing team's success.

Take any pof the Ps away form the marketing team, and you kill it.

When a CMO role is defined as loosely as GS has done, all they are asking for is communication people. That's all right, but communication does not marketing make.

Stephen Baker's "the numerati"

Just finished reading the book..a few months behind schedule!

Its a great read. One of the few that has no inherant "functional barriers"....from IT- to Fin to Marketing...whatever your calling in life, this book makes a great read.

What is it about... the fact that powerful computers and great analytics software will allow us to understand more about ourselves, how we are evolving...and enable companies around the world to design better more useful products and services. Thats our take.

The book talks of the power of analysing data. Sure we are aware of how credit card companies use our data to predict our future purchases and send us "offers" for the same. But how about using the same data to understand our poilitical preferences and how to "influence them". How to target messages at us to identify potential criminals earlier and identify the onset of debilitating disceases before traditional medical practices can spot them.

On the other hand, how much of our privacy do we lose in all this?

The author poses the question, but in all fairness refuses to go further into the debate. We believe as these technologies evolve and offer more obvious benefits, we may begin to see the benfits of giving up on some of that privacy.

The book is a great collection of case studies across fields as diverse as medicine/ employee efficiency/ medicine/ love/ work/ politics/ health care....and it is this diversity of content that makes it very fascinating.

The possibilities of using computing power with analytical models are simply limitless. No business will be isolated from this.

A point maybe a lot of us understand, but always worth repeating.

Ritu and Venkat