Strategy, Finance, and Innovation

What is Strategy?
Strategy is a set of action points and plans to maximise returns. It is important to plan to know what is the most profitable way and how it will be achieved.

What is Finance?
Finance is about management of money and assets and provision of funds to meet requirements and needs. It is important to know finance to be able to procure and manage money.

What is innovation?
Innovation is about improvisiong around constraints that are produced by both strategy and finance. It is important to be able to think new solutions because that is where the money is.

What is marketing?
Marketing is about creating perception of the stuff and communicating the value.

Feedback and Conflict are 2 separate things

Attended a training on giving and receiving feedback at the office today. It turned out to be a learning experience mostly because of the role plays that were part of every takeaway. Role play allowed a customised experience of the training as candidates used their own experiences to take the session in the direction they wanted individually.

The one really good thing that I realised is that there is a subtle difference between a disagreement and a feedback for a job. Often confused, and as a result both of them are handled badly.

What is feedback?

It can be positive or negative. Positive feedback lifts morale. Negative feedback is given to lift (improve) performance. Job could be related to your subordinates, peers and managers.

Both the feedbacks need to be timely (regular/instantly), based on specific instances (not attitudes and personal), and aim to add value to the person (concrete).

Negative feedback is a about a job done wrong and its poor handling leads to conflict. It has 2 basic components: a) you have facts that show that a job is not getting done properly b) you add value to the person by giving out steps for improvement and prepare a plan for follow up.

What is conflict?

It arises from disagreement over a proposed plan or activity. The important point is that you do not have the facts about the job going bad. You only perceive it to go bad. It is the perception that differs. However, you do need to have an alternate plan to propose that meets both ends.

Handling them

Handling negative feedback has four important skills

if receiver is unmotivated – contraction

if receiver is uncommitted – set personal goal in conjuction with corporate goals and consequences of not meeting the corporate as well as personal goals

if receiver disagrees – about the facts provide evidence.

– about the problem show consequences of non-action

if receiver gets emotional, shocked or cries – give permission, give space, empathise, sort it out but do not stop.

The art is how to not to sound complaining.

I am still not clear about how to handle the conflicts.

The rise of British in India – A very important read

The evolution of the East India company into the rulers of India is one of the most intriguing stories. What led to the rise of a trading house to power? Here is a well researched essay on the topic. 2nd Look

Business Models and Industry

I am of the view that there are certain fundamentals in an industry that allow a certain business model to flourish. By industry, i do not mean only the industrial process but the wider competition that a company faces in the market.

To give two analogies – an air conditioner company and a coffee chain both sell a commodity. They have to distinguish themselves on the brand recall and the service they provide to the consumers. So, these companies have to become service oriented or value-add oriented.

Second, a lot of the companies that face stiff competition in the market in terms of price and quality differentiation earn profit from consumables – mobile companies in Europe expensive airtime/subsidized phone sets., hp/canon subsidized printers/expensive ink, bottled water filter, dish TV etc.

I think the arguments need to be fleshed out in detail. but i believe that a certain orientation of competitive forces in the industry allow us to have certain business models. I understand that nowadays companies follow multiple business models to maximise revenues the most public example that comes to my mind is airtel.Then, we have companies which change business models when they enter a new market. The most prominent model i recall is GE in healthcare.
So, what exactly is it that drives a certain business model in a certain market.

Corruption the Cancer…

I like this term – frequently used by Arun Shourie. I was reading some of his articles published in the past and realised how systemic is corruption, that even people like him in power are unable to build a coalition to root it out..

I call this a systemic problem as I realise that no amount of good intentions or my simplified suggestion of improving the salary levels and hi-tech monitoring is going to solve it. Its a problem akin to famines, no matter how much food you could bring in India in those days, it didn’t solve the problem. But only when you brought in the structural changes did the famines vanish from Bengal.

So what are the fundamental problems and how to solve them. Like absence of rains and use of unscientific techniques caused famines… demand of food was more and less could be produced, i think corruption is caused by a big demand supply gap of governance in the form of schools, hospitals, police, prosecution, vigilance, and a lack of checkpoints – you always know the big fish will be the most corrupt, you create special deptt. to make sure they dont get out of the net.

I think the way to go about it is to try and remove the capacity issues. Staff government offices adequately – simply making the bureaucratic control reduntant and allowing market forces to come in, but regulated to ensure market functions properly. My wishlist is to increase number of districts as per population and local needs, use technology to make governance more open – involve people in scrutiny along with the vigilance department, make the decision making procedure less hierarchial – decentralise authority, focus on core issues of governance, economy and security and leave rest to well qualified professionals, and ofcourse pay good salary.

The Devil is in the Detail

Obama has been giving historic speeches since he set out to become the President. His speeches have been characterized by the scale of ambition he wants to achieve, the change he aspires to set in. At home, the euphoria generated by prospects of a stable government at the centre has led to enormous expectations from the government. True to the mandate, the Congress ministers are coming up with plans to undo the wrong doings of the past. To remove the bottle necks in public delivery, to ensure the rule of law, to put a sense of governance back amongst the nation.

I feel that this optimism asks for a caution to avoid over-simplification of things. To try and bring in changes not properly considered. To do away with the old structure without proper planning can be more harmful than maintaining the status quo.

Obama himself has been slow on the promised change. He has stopped short of executing a number of his prepoll commitments and have changed his stance on policy matters. I think the same would be happening here in India, when the ministers get down to work and realise competitive demands made by various sections, it will be a challenge to figure out their way out of this zero sum game.

I wish them all the wisdom and courage for doing the right thing.