Thursday, August 16, 2012

Intensity Towards Competency (how better to define ITC)

Business jargon and some of its understanding came into my life only after I started working at the age of 22 in GE Healthcare. As much as we hoped for our machines to be the mark of technology, it was the reputation of the company that outperformed. These were the day when I got exposed to terms like global sourcing, core competencies, diversified business and consolidation through almost every central communication. Reason- these were lessons learnt the hard way and screaming out to everyone; beware: that this is what we had tried and failed, try not to do the same mistakes.

Since I have learnt this, I have tried to look at Indian corporates which have tried to diversify, streamline to core or tried things, failed and renewed themselves. Of course, what I looked in each case was the element which I could say could be the core competency of the corporate.

One of the best examples of diversification I have seen is that by ITC Limited. The company is over 100 years old and for 60 years the company did nothing but made and sold cigarettes. Even today, it has almost 60% revenues coming in from tobacco sale. But they have diversified smartly into businesses like hotels, paper, foods & confectioneries, clothing, personal care products and stationery. Not to mention smaller businesses like agro, retail and IT. What I admire so much about ITC is its commitment towards building on competency with every new vertical and living by its motto- Create Value.

In 1970 it went into Hotels - unrelated to the tobacco business but the ITC Sheraton Chola in Chennai was nothing but the best in the sector at a time when there were no big hotel chains in India. The fact that today ITC Grande and ITC Fortune are brand which have stood the test of time is only due to the fact that they stand for something unique in their offering.

The next diversification was paper and paper board. Okay, there is connect with tobacco as both utilized organic plant origins and - after all, a cigarette is basically tobacco wrapped in paper, packed in a paper box. But ITC paper is renowned all across the industry for industrial as well as regular printing. Sure, clothing, personal care products and foods are an offshoot which is not entirely in coherent; but the way these products have been developed and marketed is a master class in understanding consumers.

Typically, a cigarette vendor has a small shop where tobacco products, mints n toffees, small quantity pouches of snacks n biscuits, soaps and oils, sachets of shampoos, playing cards, ball pens etc. That’s a huge range of categories considering nothing here costs in excess of Rs 25. Margins are low but volumes are high. It is like a poor man’s supermarket.

So, for 60 years you have been in the tobacco business. In the process, you have established a distribution network unrivalled by anyone else in India. Go out to the most rural parts of India and you will still find a cigarette (so what if it chota Goldflake) from ITC available. Come to the semi urban and urban space and the product mix spreads from the Goldflake to the Classic range and further on to the premium brands like Insignia.

Now what does every smoker need which can be easily distributed along with the cigarettes???- a matchbox and mints. ITC entered into the marketing and distribution of a cottage industry like match boxes with AIM and Mangaldeep as two brands. While the need is catered for its customers, ITC also moves into essence sticks with Mangaldeep, a support extended to the same people manufacturing the matches. There is Candyman with mints. A long shot, but a smoker can very well be in need of finger snacks to go with a drink. There comes in Bingo. Most of these shops are open since early morning or run till late evening. The Superia range of personal care products serves the travellers and small quantity consumers to perfection.

ITC is not just a brand for the common man- it also serves a life style. The hotels are a statement. The clothing range and personal care products often remind me of the way Dunhill business suits became a rage in Japan in the 60s. Wills Lifestyle, Essenza Di Wills (premium), Fiama Di Wills are all brands which talk of a lifestyle a person with a Wills Insignia in his fingers will desire.

While all the lifestyle talk, ITC e-Chaupal combines the farm produce sourcing with IT efficiency so that farmers get the best value for their produce. On the other end, buyers also get access to the best agro products eliminating middle men. This is the most successful online mandi in India at present. Add to it Chaupal sagar- an agro supermarket to sell farm produce eliminating the complete chain of bulk buyers who cut commissions from producers to consumers.

A wide range of products and excellence in each one; a strong sourcing and distribution chain- ITC has it. Call some of the rural initiatives as CSR or Bottom of the Pyramid approach- it all does make an impact on every life. ITC truly Creates Value…

Saturday, June 30, 2012

Designation Overruled

My father, at the time of his retirement, was a highly respected professional in his industry. His position and authority was acclaimed by clients, competitors, coworkers and superiors alike. The reason was nothing great to be honest- just the fact that he had managed the art of balancing his industry knowledge, experience and people skill at work to the very best. Not surprising that even after 5 years of his retirement, people still do some back to him with offers for consulting, guiding or just personal advice.

Recently my father had a visitor- a colleague who had risen from being a service engineer was today heading a service department in the same organization. I usually like to sit around my father at such times as long as my presence becomes a problem in the discussion. Reason; the issues discussed are business adversities and I find it really interesting to learn more from the experience shared.

During the discussion, my father asked the person as to why the morale in the company was low? The other person was a little taken aback by the statement as there was not much discussed on this front. The reason my father gave to substantiate his claim was his meeting someone from a competitor organization saying that the sales persons he was seeing lately lacked the zeal for winning the contract. If the frontline sales team was lacking enthusiasm, the rest of the organization morale was just so easy to imagine.

A few days later, I was sitting with him talking how working has become difficult due to a drop in sales and overall morale going down due to market sentiments. He was quick to point out that such times exist in every business and actually test the mettle of the company of how well it has developed its management during the better times. I agreed to his statement- but also told him how the environment was going unhealthy when top management was getting down to closing deals at any cost.

To stand by my words I gave him a classic example. Our sales and business team was going to clients and making an offer which was competitive. Knowing that the markets were sluggish, most clients were delayed in response. While the sales guys had faith in the offer they had made and were prepared to wait for their bid to pay off, the management was pushing on closing deals quicker. Result, people who did not have much to do on day to day business levels were now actively involved in client meetings.

How did this affect? Well a sales guy was having GM Marketing or Sales Head along with him on meetings- how much ground did his position stand once they flashed their card to the client. What was happening next was the sales guy was automatically eliminated from the equation and all his hard work towards building the deal was simply out of the reckoning. Worst was when the VP Sales was answering calls from large contractors and dealers who wanted to push their credit lines beyond their allocated limit. Reason again was the VP giving out his business cards like a greeting card to boost his ego about knowing people right down the levels.

This was affecting the sales teams majorly. The month of May-June saw nothing less than 8 sales guys resigning from their jobs and serving notice. A large cause for the bunch to be dissatisfied with all this was intervention of the top brass in daily activities which saw the sales team lose face in a lot of ways. End of the day, there were also some people amongst the managers who loved to moot around ‘I got the project, I did it…’ The problem was small by no means as no less than 8 people in sales had put in their papers in a matter of 15 days.

In his usual ways, my father came around and shared an anecdote from his life which was a big learning by far. In his early days, he had closed a deal at a price and the mill owner shrugged his shoulders suggesting- that is a deal for you, I still have the ace up my sleeve, my relation with your MD. He did try to use his contact and contact the MD, but this was the place where a seasoned businessman showed his character. Instead of putting down his sales guy for some personal relations, the MD made a turn coat saying- You are very lucky, the guy was new and he gave up more than what was best possible in the hope of getting the order; if it was me, I’d settle on 2-3% higher than what he has.

The MD later met my father in confidence and told him not to be bogged down by such comments. For the company, it was word and offer from the sales person which was of prime importance and no personal contacts or relations came above that. It was all the sales team ever needed to know to justify how much they were valued.

It sometimes occurs to me how values in a family managed enterprise were more business oriented than what I see sometimes in MNCs. It is surprising how designations in an old school organization never overruled business goals- but somehow they are in a global MNC.

Wednesday, June 13, 2012

Have I made it BIG???

Since the time I took reading as a hobby (not too long ago), amongst the first novels I read was the Godfather. The impressionable mind was exposed to a like that comes in at the start of the book reading ‘Behind every successful fortune, there is a crime’. Though this line was talking how the Italian Mafia was formed when a good man takes to the gun in times of depression, it had no real impact on how I see things around me.

In the years that followed, I read the success stories of people who made it big in business in India or the world over. Some were pure genius in terms of talent and ideas while some exploited the loopholes in the system and made it big. Either ways, the journey from Zero to Hero in every case was fascinating. Not surprising then that a Branson losing virginity, the yarn spinning out from the polyester prince Dhirubhai or the great story of Indian retail from Biyani were of great interest.

It was not until very recent when I read two articles that got me thinking about what are successful fortunes made up of? I read two articles in Forbes; one on business tips from College dropouts and on Kishore Biyani and his Big Future Group Sale!!! Most of the success stories had people who rose to success in a matter of a decade or two; very few like Dell or Biyani who have risen in sectors where technology or software was not the deciding factor. But somehow, most of them have always been on the wrong side of the law at some point for monopoly, tax evasion, financial irregularities or just simply using their money might to kill off competition.

Amongst college dropouts; some like Michael Dell were in my opinion brilliant in understanding market dynamics. Dell was an assembler of PCs in a market dominated by branded computers. I’m not completely sure if anyone in India with a market dominated by assemblers could have succeeded in the same way; but his Just-in-time inventory concept was definitely path breaking. But when the article spoke of Zuckerberg or Bill Gates- somehow I always seem to find that at some stage, they did violate laws to grow. Both I say are genius as computer programmers. But the very origination of facebook began with the hacking of personal data off the college server for images. Microsoft, with its entire GUI succeeded due to a water tight monopoly with Intel and bundling of IE.

Sir Richard Branson is one college dropout I admire as I see his success coming from simple joys of life. I mean you have people like you who hang around reading about the Beatles and listening to records; but it took a Branson to write a youth journal or get into the records sale business. But the rise of Virgin was its music via mail order own records label, something which did see Branson step on the wrong side of the law. It was a temptation too strong to make more money by smuggling records from countries where the tax was low and selling them in UK.

Though Dhirubhai Ambani built Reliance Industries from zilch, somehow from his day in Aden, he was flirting with the law by smelting coins for silver, trading inside information on government policies or evading tax by importing machinery as spares. In fact chopping down competition by delays in port clearance to an extent where the machinery rots in the hold was actually the dark side of the rise. Biyani built the retail empire which has made the National holidays of 15th August and 26th January the days sending cash registers into a fit, the fact that the group had to sell Pantaloons (the mother brand) to offset debt is a reflection of how the vendors under the retail giant were being squeezed.

On a day I sit back and ask myself, ‘Have it made it big?’(no whiskey endorsed here), all I say is not having to depend on anything against the law, being honest and not squeezing anyone with the weight of the brands I have worked with is possibly how much I have invested towards enriching my life in the Biggest possible way.

Thursday, March 8, 2012

Getting Older

It struck me all of a sudden today when I was seeing my employee profile on my company portal, my age was now automatically reading 31. Gosh! Seems like yesterday when my friends made a whole hoolah as I crossed the 30 marker. Now the number on my employee profile signified me as someone well entrenched in those 30+ waters. Just a number it may be, but age is somewhat magical as an entity.

As a kid, I remember looking forward for my birthday to dawn. Call it a simple joy of life when we got to dress to school in clothes other than the school uniform, pick your friends to carry the bag of chocolates and run around the school giving sweets to all your friends in other classes. Those were the days when evenings meant a party at home, cutting the cake and playing party games. (Remember; bombing the cities, passing the parcel, tail the donkey etc…)

Somehow when in high school, age was now required to be higher than what I was. It also had its own landmarks- am I in my teens? Do I get my learner’s Driving License when I’m 16? 18 and am I now of legal age to enter a pub and have beer? What privileges are entitled to me now that I am officially an adult? That was possibly the last time when the number in the age column mattered so much.

The feeling of years being added to the age column never seemed to matter once I was done with my graduation. What was more evident was how we were changing once we got into our first jobs. Prosperity began to show up. Once upon a time student who ran around and were blessed with toned bodies started picking up flab as they sat in offices and enriched themselves with Vitamin M. Hairlines which stood the test of exam pressures were receding under work pressure (some due to X-rays and radiation). The first time we met a year after graduation- some of us were catching up with age far sooner that the mid 20’s we were in.

The number against age again caught up with me when I enrolled for my Post-Graduation. I was 26, the maximum batch was 23 and the other extreme was 21. As I got assigned the role of the father figure, being called Uncle/ Kaka just came down so easy to most of my classmates. But what the age disparity also created was me working under people who were younger to me. It mattered me not one bit- ideas are no one’s domain and age had nothing to do with the quality of ideas you can come up with.

This I say is one area where the number against the column ‘age’ and ‘experience’ usually have no relation. As a matter of fact, when I started working in the Ad world, I worked with people who were younger to me, less years in terms of overall experience, but definitely qualified to be my senior colleagues by virtue of domain experience.

Today, I stand at a very strange cross road in life- this is the age where I’m witness to a lot of my friends and acquaints move up in to the next stage of life… starting families. In recent times through social networks, I see more and more people around me are tying the knot or are today announcing the birth of their kids. Not to mention I have got together with the most loving person I have met in my life and made year number 30 a milestone.

I don’t know how many more landmarks are in the waiting for me, but one thing is for sure- as we are growing older, it’s better to enjoy every year to the full, treat is just as a number and make it special so that it is a year you will remember for all your life.