The Manager's Perspective

Saturday, April 15, 2006

 

The rural route for banks

An interesting article about a rural foray by a behemoth that is being talked about and generating good money. A rediff article : Why ICICI's rural foray thrived?
Some highlights:

How many people join a non-profit organisation after graduating from the money-showering portals of IIM-Ahmedabad? How many go on to join a bank - and then make the best of their learning experiences?

"We realised that the model wherein banks lend directly to SHGs was not viable for us, and we felt that we must work with community-based organisations who are more aware of the needs of customers."

And so ICICI Bank signed up micro-finance institutions as intermediaries for micro lending. Their key strength "is not their ability to manage capital and assume risk, but their intricate knowledge of clients and the geography in which to operate", says Mor, convinced that such a twin-tier structure is the way ahead.

ICICI Bank recently lent Rs 175 crore (Rs 1.75 billion) for a rural roads project in Madhya Pradesh, for example, and the big beneficiary is the local mandi (so the loan is serviced by the mandi cess, collected in an escrow account).

"The mandi will now tell us which road to build," says Mor, with satisfaction.


Wednesday, April 12, 2006

 

Where is my Notebook???

ITC's foray into branded school notebooks segment is really changing the scenario in this segment. This is where only 10% of the market is under organized players. Apart from the notables such as Navneet, ITC's Classmate and Nightingale, the whole market is dominated by the regional players, who are mostly in the unorganized sector.

This article points out the efforts undertaken by ITC to be a leader in this segment.

"
Notebooks was a Rs 5,000-crore (Rs 50 billion) category growing at 9-10 per cent every year. Importantly, there were huge visible gaps in the market. The organised segment accounted for less than 10 per cent of the notebooks market.....

....After two full years of being in business, the Classmate brand is already the No. 2 player, inching close to market leader Navneet.
"

So, ITC is getting aggressive in this regard and trying to get into the top position.

But, is this a good business to enter, considering that notebooks are slowly being replaced with more e-options?

There are some more questions...
1. Is ITC correct in focussing only on the students segment?
2. ITC already failed in the greetings cards segment. Is this not a dying segment again?
3. What should Navneet do to maintain its leadership in the onslaught of ITC?
4. Lets assume that you are a start-up entrepreneur. Is this business lucrative enough for you to enter? If yes, what segment you would target, and with what positioning? How would you keep the biggies at bay?

Lets discuss it in the comments section....

Tuesday, April 11, 2006

 

Has the web made porn respectable?

Kind of an old article, but seeing Indians walk a couple of decades backward in time, this could well be "ahead" of it's time!

Has the web made porn respectable?

Some porn industry estimates (again 2001 figures, ahem).



 

Drucker for dummies


It is much too recently that I have so to say, discovered the absolute magic (well actually it is just sanity, but in the adjoning chaos, it does appear magic) of Peter Drucker. After his death. This is painfully reminiscent of that other maestro I discovered immediately after his death, Ustad Nusrat Fateh Ali Khan Saab.

This is an interesting article on Drucker, here. Most of what you read here would seem cliched. Though it would be interesting to bear it in mind that he wrote these, established these.. the very basic premise of thinking about management.

The perils of developing a social science are perhaps best captured in the fault lines between theory and practice. Grand theories, broad in sweep and scope, often come a cropper when applied to complex, real life situations.

Or, seemingly timeless insights turn out to be just transient truths. At best, they work in the particularities of a given situation and collapse like the proverbial deck of cards when external circumstances change.

It is to Peter Drucker's (1909-2005) enduring credit that he made management into, as he famously put it, a practice -- a set of purposeful tasks that can be organised, much like medicine or engineering. The father of modern management transformed it into a specific and systematic work based on an organised body of knowledge that is both teachable and learnable, rather than treating it as something esoteric and mysterious.

Drucker's insights can be of tremendous help to any management practitioner. But, they often ran contrary to what common sense advocated.


Drucker on Wikipedia.
Drucker on Career Moves.


We shall come back to Drucker a fair number of times over time on this blog. This blog essentially is about a few theorists trying to explain the real world. And there was no one who did it better than Drucker.


Monday, April 10, 2006

 

Managing management?

Management is something we learn instinctively, we are originally conniving, clever and crafty. We know how to vie for attention. We’ve tried pity, sympathy, back-stabbing the sibling and what not. Not to mention living the truism, neighbor’s envy, owners pride…The way I see a corporate environment is no different. There is a good side too. Leadership, Empathy, Team play…But few good eggs left, isn’t it? Besides, how much of a moral framework are we allowed to have in this rat race?
Anyway my humble opinion stems from a class I taught last quarter. It was christened Strategic Management but it taught gaming theory. And the strategy part over rode the management part by many laps. Interestingly enough the case-studies in there were so matter of fact that protecting one’s self interest is not a crime anymore. In the business world alliance has a very different connotation. There is no need for expectation management as vested interest is always a priority!
One principle that strongly resonated with me – ‘Look forward, reason backward.’ Corporate philosophies are over and above the jaded chess board analogy. I found an excellent ad which I included in the final exam I put my students through - I asked them to view and analyze this ad in the light of this principle:



I thought it applied so freaking well in life – Work your butt out just so you can DO NOTHING!
Now that's management, allright!

Saturday, April 08, 2006

 

Playing with a laptop

One laptop per child...

This is what the mission is. The idea is to distribute laptops to needy children across the globe. A lofty mission indeed.

Nicholas Negroponte who has set up a non-profit group - known as the One Laptop Per Child, supported by international big wigs like Google, Quanta, AMD, 3M, etc. is into the India part of the initiative. In an interview with Business Standard, he has outlined his action plan for the achievement of the lofty mission.

"
India faces serious power problems. And laptops also need power. How do you propose to resolve the issue?

Our laptops will run on human power. It will come with at least two means of charging: with your arms and your feet (one each, as a minimum). The satellite connection would need a generator, but we would provide that too.
Human power is not dependent on the number of hours, but the ratio of human movement to subsequent run time. I mean that, simply in the worst case, one minute of cranking means 10 minutes of operation. If you use your legs, like a bicycle pump, it skyrockets, perhaps as much as 25 minutes.

"

Hope there are plenty of more innovations like this.

There is an interesting article written by Negroponte in WIRED magazine. This, titled Beyond Digital, says that the digital revolution is over....

"Face it - the Digital Revolution is over.

Yes, we are now in a digital age, to whatever degree our culture, infrastructure, and economy (in that order) allow us. But the really surprising changes will be elsewhere, in our lifestyle and how we collectively manage ourselves on this planet."

Are we ready for the digital age????


Saturday, April 01, 2006

 

Apples and pods



A very interesting discussion on Apple's uncertain future, which despite having a bevy of beauties such as these, being responsible for the single most mass phenomenon of the past few years and built upon a culture of innovation that is stunning, looks shaky. I agree! The initial part of the discussion is worth reading for why just innovation is not enough.

The discussion is How Apple could mess up, again.

However, the interesting part for me was also, here.

Seems to me, given your comments, that Apple has another strategic option: to focus on continuing to develop new markets with its proprietary, innovation-heavy approach, harvest them, and move on.

We have a case about this at Harvard [Business School], about when John Sculley was the CEO of Apple in the early 1990s. He actually had remarkably clear vision about where the industry was heading. He had three priorities.

First, he felt the company needed to get its price down to $1,000, from $3,000 or $4,000 at the time. The second thing was to open up the architecture, by selling the OS. And the third was that handheld devices were going to be big. He was right on all three, but the culture of Apple was just so strong that Sculley just couldn't change the direction of the ship.

So I always ask the students, "What would you do if you were on Apple's board?" And they always say the same thing: "Crucify him, and bring in a good manager."

"So who would you bring in?" I ask. And they say: "Bring in someone really strong, who can make those decisions." So what did Apple do? They brought in Michael Spindler -- a strong general manager type who was known for his operations ability. Well, that didn't work out.

So I ask, "What would you do next?" And they say: "Bring in a good manager -- someone who can turn the company around." Well, they brought in Gil Amelio, who had turned around National Semiconductor. But he only lasted 18 months or so.

So then they bring Jobs back. And why did the company prosper under Jobs? The students' instinct is to say, because he's a good manager. I think the reason is that he stopped trying to change the company. He wanted them to do what they had always wanted to do: make cool products, based on proprietary architectures.



Neat!

Wednesday, March 29, 2006

 

Mittal's Story

"Mahatma Gandhi once said: 'at first, they ignore you'; these were the times when I was being ignored."

"It's important that at this stage you be ignored. Because spotlight at an early time of your lifecycle does not give you any extra advantage but certainly puts you at a great disadvantage."

"Gandhiji said: 'then they laugh at you.'

In 1992, Mittal said he applied for mobile licence -- India's first attempt to provide mobile telephone services.

"I felt we had the passion to deliver India's first mobile phone services. Many thought otherwise. We threw our hat in the ring."


........................



"Then the juggernaut (Bharti) started rolling," he said. "Then they fight you. Then the big fight erupted in the telecom arena. They had ignored us, they had laughed at us and the fight had begun. And we were willing to fight this battle out because it was truly the mother of all battles."

Mittal said the company believed that "if the business is about people and customers and not about money and technology, it thought it can win the war."

"After three years of fight, we came out fairly successful out of this. As Gandhiji said, those who try hard with lot of passion, eventually win."



 

Worldspace. Reason for success in india?

Worldspace India has become the largest arm of the company within- a year. The points to notice are:

  1. India along with Hong Kong and China is the largest market for pirated music in the world. More so, because one simply doesn't know the mind-boggling size of the piracy.
  2. The sets are being sold in the major cities at the moment all of which have free to air FM stations.
  3. Worldspace isn't really poor man's fare. The special festival offer at 1999/- for one of it's low end receivers (subscription charges were applicable after 6 months, almost as much as the initial cost), speakers were extra, was what pushed the company into blinding limelight. The offer that was initially to last till November last year still continues unabated till date. I personally think it was not a great deal. And yet, the seemingly frugal indian customer swallowed it.
  4. An overwhelming majority of those 1999/- sets were given as gifts. (Much like Gillette razors are given these days. The ones getting the gifts do not eventually realize that they are getting into the trap of more and more).

Umm.

 

Illegally Entreprenurial

Raghav Mahato from a village in Bihar started a radio station. One story you definitely want to read. Here.

Radio listener in Bihar village
The station is a rage with listeners in the area

It was a perfect idea. In impoverished Bihar state, where many areas lack power supplies, the cheap battery-powered transistor remains the most popular source of entertainment.

"It took a long time to come up with the idea and make the kit which could transmit my programmes at a fixed radio frequency. The kit cost me 50 rupees (just over $1)," says Raghav.

The transmission kit is fitted on to an antenna attached to a bamboo pole on a neighbouring three-storey hospital.

A long wire connects the contraption to a creaky, old homemade stereo cassette player in Raghav's radio shack. Three other rusty, locally made battery-powered tape recorders are connected to it with colourful wires and a cordless microphone.

Raghav FM Mansoorpur station in Bihar
The radio station is a repair shop and studio rolled into one
The shack has some 200 tapes of local Bhojpuri, Bollywood and devotional songs which Raghav plays for his listeners.




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