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How great leaders inspire action

How do you explain when things don't go as we assume? Or better, how do you explain when others are able to achieve things that seem to defy all of the assumptions? For example: Why is Apple so innovative? Year after year, after year, they're more innovative than all their competition. And yet, they're just a computer company. They're just like everyone else. They have the same access to the same talent, the same agencies, the same consultants, the same media. Then why is it that they seem to have something different? Why is it that Martin Luther King led the Civil Rights Movement? He wasn't the only man who suffered in pre-civil rights America, and he certainly wasn't the only great orator of the day. Why him? And why is it that the Wright brothers were able to figure out controlled, powered man flight when there were certainly other teams who were better qualified, better funded --and they didn't achieve powered man flight, and the Wright brothers beat them to it. There's something else at play here.

About three and a half years ago, I made a discovery. And this discovery profoundly changed my view on how I thought the world worked, and it even profoundly changed the way in which I operate in it. As it turns out, there's a pattern. As it turns out, all the great inspiring leaders and organizations in the world, whether it's Apple or Martin Luther King or the Wright brothers, they all think, act and communicate the exact same way. And it's the complete opposite to everyone else. All I did was codify it, and it's probably the world's simplest idea. I call it the golden circle.

Why? How? What? This little idea explains why some organizations and some leaders are able to inspire where others aren't. Let me define the terms really quickly. Every single person, every single organization on the planet knows what they do, 100 percent. Some know how they do it, whether you call it your differentiated value proposition or your proprietary process or your USP. But very, very few people or organizations know why they do what they do. And by "why" I don't mean "to make a profit."That's a result. It's always a result. By "why," I mean: What's your purpose? What's your cause? What's your belief? Why does your organization exist? Why do you get out of bed in the morning? And why should anyone care? As a result, the way we think, we act, the way we communicate is from the outside in, it's obvious. We go from the clearest thing to the fuzziest thing. But the inspired leaders and the inspired organizations -- regardless of their size, regardless of their industry -- all think, act and communicate from the inside out.

Let me give you an example. I use Apple because they're easy to understand and everybody gets it. If Apple were like everyone else, a marketing message from them might sound like this: "We make great computers. They're beautifully designed, simple to use and user friendly. Want to buy one?" "Meh."That's how most of us communicate. That's how most marketing and sales are done, that's how we communicate interpersonally. We say what we do, we say how we're different or better and we expect some sort of a behavior, a purchase, a vote, something like that. Here's our new law firm: We have the best lawyers with the biggest clients, we always perform for our clients. Here's our new car: It gets great gas mileage, it has leather seats. Buy our car. But it's uninspiring.

Here's how Apple actually communicates. "Everything we do, we believe in challenging the status quo.We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use and user friendly. We just happen to make great computers. Want to buy one?" Totally different, right? You're ready to buy a computer from me. I just reversed the order of the information. What it proves to us is that people don't buy what you do; people buy why you do it.

This explains why every single person in this room is perfectly comfortable buying a computer from Apple. But we're also perfectly comfortable buying an MP3 player from Apple, or a phone from Apple,or a DVR from Apple. As I said before, Apple's just a computer company. Nothing distinguishes them structurally from any of their competitors. Their competitors are equally qualified to make all of these products. In fact, they tried. A few years ago, Gateway came out with flat-screen TVs. They're eminently qualified to make flat-screen TVs. They've been making flat-screen monitors for years.Nobody bought one. Dell came out with MP3 players and PDAs, and they make great quality products,and they can make perfectly well-designed products -- and nobody bought one. In fact, talking about it now, we can't even imagine buying an MP3 player from Dell. Why would you buy one from a computer company? But we do it every day. People don't buy what you do; they buy why you do it. The goal is not to do business with everybody who needs what you have. The goal is to do business with people who believe what you believe.

Here's the best part: None of what I'm telling you is my opinion. It's all grounded in the tenets of biology. Not psychology, biology. If you look at a cross-section of the human brain, from the top down, the human brain is actually broken into three major components that correlate perfectly with the golden circle. Our newest brain, our Homo sapien brain, our neocortex, corresponds with the "what" level. The neocortex is responsible for all of our rational and analytical thought and language. The middle two sections make up our limbic brains, and our limbic brains are responsible for all of our feelings, like trust and loyalty. It's also responsible for all human behavior, all decision-making, and it has no capacity for language.

In other words, when we communicate from the outside in, yes, people can understand vast amounts of complicated information like features and benefits and facts and figures. It just doesn't drive behavior. When we can communicate from the inside out, we're talking directly to the part of the brainthat controls behavior, and then we allow people to rationalize it with the tangible things we say and do. This is where gut decisions come from. Sometimes you can give somebody all the facts and figures, and they say, "I know what all the facts and details say, but it just doesn't feel right." Why would we use that verb, it doesn't "feel" right? Because the part of the brain that controls decision-making doesn't control language. The best we can muster up is, "I don't know. It just doesn't feel right."Or sometimes you say you're leading with your heart or soul. I hate to break it to you, those aren't other body parts controlling your behavior. It's all happening here in your limbic brain, the part of the brain that controls decision-making and not language.

But if you don't know why you do what you do, and people respond to why you do what you do, then how will you ever get people to vote for you, or buy something from you, or, more importantly, be loyaland want to be a part of what it is that you do. The goal is not just to sell to people who need what you have; the goal is to sell to people who believe what you believe. The goal is not just to hire people who need a job; it's to hire people who believe what you believe. I always say that, you know, if you hire people just because they can do a job, they'll work for your money, but if they believe what you believe,they'll work for you with blood and sweat and tears. Nowhere else is there a better example than with the Wright brothers.

Most people don't know about Samuel Pierpont Langley. And back in the early 20th century, the pursuit of powered man flight was like the dot com of the day. Everybody was trying it. And Samuel Pierpont Langley had, what we assume, to be the recipe for success. Even now, you ask people, "Why did your product or why did your company fail?" and people always give you the same permutation of the same three things: under-capitalized, the wrong people, bad market conditions. It's always the same three things, so let's explore that. Samuel Pierpont Langley was given 50,000 dollars by the War Departmentto figure out this flying machine. Money was no problem. He held a seat at Harvard and worked at the Smithsonian and was extremely well-connected; he knew all the big minds of the day. He hired the best minds money could find and the market conditions were fantastic. The New York Times followed him around everywhere, and everyone was rooting for Langley. Then how come we've never heard of Samuel Pierpont Langley?

A few hundred miles away in Dayton, Ohio, Orville and Wilbur Wright, they had none of what we consider to be the recipe for success. They had no money; they paid for their dream with the proceeds from their bicycle shop. Not a single person on the Wright brothers' team had a college education, not even Orville or Wilbur. And The New York Times followed them around nowhere.

The difference was, Orville and Wilbur were driven by a cause, by a purpose, by a belief. They believed that if they could figure out this flying machine, it'll change the course of the world. Samuel Pierpont Langley was different. He wanted to be rich, and he wanted to be famous. He was in pursuit of the result. He was in pursuit of the riches. And lo and behold, look what happened. The people who believed in the Wright brothers' dream worked with them with blood and sweat and tears. The others just worked for the paycheck. They tell stories of how every time the Wright brothers went out, they would have to take five sets of parts, because that's how many times they would crash before supper

And, eventually, on December 17th, 1903, the Wright brothers took flight, and no one was there to even experience it. We found out about it a few days later. And further proof that Langley was motivated by the wrong thing: the day the Wright brothers took flight, he quit. He could have said,"That's an amazing discovery, guys, and I will improve upon your technology," but he didn't. He wasn't first, he didn't get rich, he didn't get famous, so he quit.

People don't buy what you do; they buy why you do it. If you talk about what you believe, you will attract those who believe what you believe.

But why is it important to attract those who believe what you believe? Something called the law of diffusion of innovation, if you don't know the law, you know the terminology. The first 2.5% of our population are our innovators. The next 13.5% of our population are our early adopters. The next 34% are your early majority, your late majority and your laggards. The only reason these people buy touch-tone phones is because you can't buy rotary phones anymore.

We all sit at various places at various times on this scale, but what the law of diffusion of innovation tells us is that if you want mass-market success or mass-market acceptance of an idea, you cannot have it until you achieve this tipping point between 15 and 18 percent market penetration, and then the system tips. I love asking businesses, "What's your conversion on new business?" They love to tell you, "It's about 10 percent," proudly. Well, you can trip over 10% of the customers. We all have about 10% who just "get it." That's how we describe them, right? That's like that gut feeling, "Oh, they just get it."

The problem is: How do you find the ones that get it before doing business versus the ones who don't get it? So it's this here, this little gap that you have to close, as Jeffrey Moore calls it, "Crossing the Chasm" -- because, you see, the early majority will not try something until someone else has tried it first. And these guys, the innovators and the early adopters, they're comfortable making those gut decisions. They're more comfortable making those intuitive decisions that are driven by what they believe about the world and not just what product is available. These are the people who stood in line for six hours to buy an iPhone when they first came out, when you could have bought one off the shelf the next week. These are the people who spent 40,000 dollars on flat-screen TVs when they first came out, even though the technology was substandard. And, by the way, they didn't do it because the technology was so great; they did it for themselves. It's because they wanted to be first. People don't buy what you do; they buy why you do it and what you do simply proves what you believe. In fact, people will do the things that prove what they believe. The reason that person bought the iPhone in the first six hours, stood in line for six hours, was because of what they believed about the world, and how they wanted everybody to see them: they were first. People don't buy what you do; they buy why you do it.

So let me give you a famous example, a famous failure and a famous success of the law of diffusion of innovation. First, the famous failure. It's a commercial example. As we said before, the recipe for success is money and the right people and the right market conditions. You should have success then.Look at TiVo. From the time TiVo came out about eight or nine years ago to this current day, they are the single highest-quality product on the market, hands down, there is no dispute. They were extremely well-funded. Market conditions were fantastic. I mean, we use TiVo as verb. I TiVo stuff on my piece-of-junk Time Warner DVR all the time.

But TiVo's a commercial failure. They've never made money. And when they went IPO, their stock was at about 30 or 40 dollars and then plummeted, and it's never traded above 10. In fact, I don't think it's even traded above six, except for a couple of little spikes.

Because you see, when TiVo launched their product, they told us all what they had. They said, "We have a product that pauses live TV, skips commercials, rewinds live TV and memorizes your viewing habits without you even asking." And the cynical majority said, "We don't believe you. We don't need it. We don't like it. You're scaring us."

What if they had said, "If you're the kind of person who likes to have total control over every aspect of your life, boy, do we have a product for you. It pauses live TV, skips commercials, memorizes your viewing habits, etc., etc." People don't buy what you do; they buy why you do it, and what you do simply serves as the proof of what you believe.

Now let me give you a successful example of the law of diffusion of innovation. In the summer of 1963,250,000 people showed up on the mall in Washington to hear Dr. King speak. They sent out no invitations, and there was no website to check the date. How do you do that? Well, Dr. King wasn't the only man in America who was a great orator. He wasn't the only man in America who suffered in a pre-civil rights America. In fact, some of his ideas were bad. But he had a gift. He didn't go around telling people what needed to change in America. He went around and told people what he believed. "I believe, I believe, I believe," he told people. And people who believed what he believed took his cause, and they made it their own, and they told people. And some of those people created structures to get the word out to even more people. And lo and behold, 250,000 people showed up on the right day at the right time to hear him speak.

How many of them showed up for him? Zero. They showed up for themselves. It's what they believed about America that got them to travel in a bus for eight hours to stand in the sun in Washington in the middle of August. It's what they believed, and it wasn't about black versus white: 25% of the audience was white.

Dr. King believed that there are two types of laws in this world: those that are made by a higher authority and those that are made by men. And not until all the laws that are made by men are consistent with the laws made by the higher authority will we live in a just world. It just so happened that the Civil Rights Movement was the perfect thing to help him bring his cause to life. We followed, not for him, but for ourselves. By the way, he gave the "I have a dream" speech, not the "I have a plan" speech.

Listen to politicians now, with their comprehensive 12-point plans. They're not inspiring anybody.Because there are leaders and there are those who lead. Leaders hold a position of power or authority,but those who lead inspire us. Whether they're individuals or organizations, we follow those who lead, not because we have to, but because we want to. We follow those who lead, not for them, but for ourselves. And it's those who start with "why" that have the ability to inspire those around them or find others who inspire them.

Thank you very much.

Source: https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action/transcript

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[rahulrevne]

Management guru Ram Charan says companies need to invest in people, not numbers

Management guru Ram Charan believes that it is time for companies to stop focussing solely on the financial side, and start investing in the right talent. 

He is the corporate sage, the man with unparalleled access to global boardrooms and its CEOs, but one could say that management guru Ram Charan has a practical and minimalist lifestyle. 

Describing himself as a “one-person shop”, the globe-trotting Charan lives in hotels, has an office but reportedly has never stepped inside it, gets his clothes couriered to him every few days to the part of the world he is in, and writes his books on his smartphone during his travels. 

A “non-materalistic” person, Charan can afford expensive suits and cufflinks, but doesn’t care for them. Instead, he sticks to his Timex watch and admits to having splurged on a “bit costly shoes” because of a foot ailment. A believer of ‘I am no good unless I add value to individuals or the company’, Charan’s most prized possession is knowledge. 

During his recent visit to India, US-based Charan spoke to ETPanache over the phone about how companies need to rethink their talent management, the evolving role of HR, and why leaders need to upgrade their skills. 

What’s the most important skillset for a CEO? 

Diagnosing [the problem] precisely is extremely important. That’s a very critical skill. Unless you know how to do it, you may have some wrong solutions. 

You have proposed that the HR’s function needs to be included in macro decisions for effective talent management. Can you elaborate? 

In most companies, there is a rigour about the financial side, but numbers don’t drive the company, people do. I believe in bringing the CHRO (chief human resource officer) on a par with the CFO; put HR and money together. If you appoint the right people, you may use less money. If you appoint the wrong people, you may use more money. Right now, they are all in silos. The CEO, CFO, CHROs must diagnose together about operations and strategy. This [method] has been tested. It has necessitated that that the CHRO has worked in another function before he/she takes the position. In many US companies, the CEO will not hire a CHRO who hasn’t worked in at least one other function and done something constructive. Not just ticket punching. 

Have you seen this happening in India? 

Vinod Kumar, CEO, Tata Communications. (Image: Tata Communications) 

In Tata Communications, CEO Vinod Kumar and global CHRO Aadesh Goyal rotate the HR in in other functions. Every year, they take their people to Silicon Valley for four weeks, and the [staff’s] mindset changes. They’ve been doing this for the past five years. 

Global CHRO Aadesh Goyal, Tata Communications. (Image: Tata Communications). 

And the CHRO is a person who understands business extremely well. In Aditya Birla Group, Santrupt Misra runs a multibillion-dollar business and is also the CHRO. He brings those two things together 

We are allocating funds without attention to people. I say find people first, then allocate funds. And depending on the person, allocate funds differently. 

Older Indian firms who don’t have any MBAs [at the helm] do that. They talk in private at home, saying, ‘This guy will do this, turn this thing around. Give him $10 million more.’ They do this intuitively. But they have no respect for the HR guy. 

Although I have never met Dhirubhai Ambani, he had a nose for the right people. If you put the right person or a better person on a job, your money allocation will be different. 

How crucial is this for new-age tech companies? 

First of all, the speed of change is high compared to just a few years ago. Second, you have speed and technology combined making the change, so you have to get the right people for the right job faster. In one of those Silicon Valley companies, the HR person is an M&A expert. This is because they are buying a lot of small companies. They [the new employees] have to be assimilated and they pay a very high price to these small companies. So, you can’t have a CHRO who doesn’t understand people, cannot assimilate and is totally ignorant to technology, it’s not going to work. 

With automation, do you see leaders/CEOs of conventional companies upgrading their skill? 

Some are, some are not. The CEO of Singapore Telecommunications (Singtel), Chua Sock Koong, invests the time. A number of American CEOs are taking lessons. I don’t know about India, but they better learn. Leaders will never succeed unless they continue to learn. 

I have a CEO in America who is spending 20 per cent of his time to visit start-ups across the globe. That’s where you do the learning, not in the school. He says, ‘I am selling you nothing, I am buying nothing. But I can learn a lot from you and I can help you not with sales, but with contacts or with guidance to scale’. He loves it and says it’s the best education he can get. 

At times, businesses can get damaged due to family feuds. What’s your take on this? 

You have to come to terms that no two children have the same personace:lity and ambitions… You have to go with where children’s aptitude and ambition lies. And the families will split. There are few families that are intact in America. There are some in Scandinavia with the fifth or sixth generation. You better plan for it. Being intact for the sake of being intact is not going to last. 

Source:http://bit.ly/2GW6Gy3

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[rahulrevne]

McDonald’s India subsidiary posts net profit finally

Mumbai | New Delhi: After entering India more than two decades ago, burger and fries chain McDonald’s posted its first profit during year-to-March 2018 amid a long-drawn legal dispute with one of its key licensee partners. 

The local unit of Chicago-headquartered fast food giant posted a net profit of Rs 65.2 lakh during FY17-18, compared with a net loss of Rs 305 crore a year ago, according to its latest filings with the Registrar of Companies. 

The company has two partners in the country — North & East Business is operated by Connaught Plaza Restaurants (CPRL) while WestlifeNSE 0.00 % Development is the master franchisee in the western and southern markets. It entered India in 1996, and over the years, accumulated net loss of Rs 421 crore. 

“The company has not only been able to stem any further erosion of its net worth, but has also been able to successfully reverse the trend of erosion through the infusion of fresh capital,” McDonald’s India said in its latest regulatory filing. Total income which it earned mostly through royalty, grew 8% to Rs 119.6 crore. 

There was a strong revival last fiscal when most quick-service restaurants posted high samestore sales growth, helped by a surge in discount-driven footfalls at malls and greater presence in new markets. 

During the year, the company allotted shares worth Rs 71 crore to the parent company and also increased authorised capital by Rs 50 crore to Rs 458 crore. 

Last August, the company terminated all its franchise arrangements in favour of CPRL. McDonald’s had terminated its joint venture, directing CPRL to stop using its brand system, trademark, designs and associated intellectual property. The latest filings said its investments in the licensee partner were impaired and accordingly a provision of Rs 198.2 crore has been considered in the financial statements for diminution in value of investments in CPRL. 

The Bakshi versus McDonald’s legal battle dates back to August 2013 when the latter was fired as the managing director of the joint venture. Trouble between Bakshi-led CPRL and the 50:50 JV between him and McDonald’s India escalated when Bakshi challenged his removal at the Company Law Board (now National Company Law Tribunal or NCLT), accusing McDonald’s India of mismanagement and oppression. 

NCLT had reinstated Bakshi as managing director in July 2017. Bakshi’s allegation was that the termination of the JV by McDonald’s violated an earlier NCLT order which asked McDonald’s Corp to refrain from interfering in the smooth functioning of CPRL. This resulted in NCLT issuing a show cause notice to McDonald’s Corp, which the US chain challenged in the National Company Law Appellate Tribunal (NCLAT). 

The eating-out market in India, which is dominated by unorganised players, is expected to reach $131 billion by 2022. The total sales of quick-service restaurants are estimated to grow by 9.2% to reach $21.6 billion by then, according to Euromonitor data. 

Further, the western fast food market that is just 1.3% of the overall eating-out market, is expected to grow the fastest by 13.4% to reach $1.8 billion in 2022. 

Source:http://bit.ly/2ELnW6e

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[rahulrevne]

How to Use BCG Matrix

The BCG matrix can be useful to companies if applied using the following general steps.

Step 1 – Choose the Unit. Strategic Business Units, individual brands, product lines or the firm as a whole are all areas that can be analyzed using the BCG matrix. The chosen unit drives the entire analysis and key definitions. The market, industry, competitors and position will all be based on the chosen unit.

Step 2 – Define the Market. Following the choice of the unit or area to be analyzed, the most important stage for the rest of the matrix is the definition of the market. An incorrectly defined market will lead to an incorrect classification of the unit. A Mercedes-Benz analyzed in a passenger vehicle market will be a dog with a small market share. However, analyzed within a luxury car market, it will be a cash cow.

Step 3 – Calculate Relative Market Share. At this stage, the relative market share for the chosen unit needs to be calculated. This can be done in terms or revenues or marker share. The formula used here us a division of the selected brand’s market share or revenues by the market share or revenues of the biggest competitor in the industry. The result in plotted on the x-axis.

Step 4 – Calculate Market Growth Rate. Online industry reports can be used to find the rate of growth for the industry. If this is not possible, then it can be estimated by looking at the average revenue growth of the leading firms in the industry. This measurement is a percentage and is plotted on the y-axis.

Step 5 – Draw Circles on the Matrix. Once all the measures are calculated, they can be put onto the matrix. This can be done by drawing a circle for each brand within a unit, or all the brands in a company. The size of each circle should correspond to business revenue generated by the brand.

EXAMPLES

Nestle

According to an analysis posted here, the BCG matrix analysis for Nestle reveals some interesting perspectives. A global multinational in the food and beverage industry, the Swiss company is the 69th highest revenue producer in the world. Over 8000 brands fall within its umbrella and are as widespread as bottled water and pet food. The company announced plans to sell off under-performing brands which were consistently showing poor sales. This analysis used the 2002 annual report for its figures which can be found here.

Question Marks – Here, the question marks have a low market share within a high growth market. The product mentioned here requires an influx of investment to capitalize on potential segments. This investment is however, not likely to yield too much return investment.

Stars – These brands have a high share in a high growth market. Nestle’s varied mineral water is in this quadrant. The brands in this are require investment to maintain their position and differentiation in both mature and emerging markets.

Dogs – The Nestle products in this category have a lower market share in a low growth market. An example of this is a lean cuisine unit and weight loss management brands which did not take off outside the US. A sports performance and nutrition brand called PowerBar is also confirmed to be divested by the company most likely due to poor sales in a saturated market. These products generate enough revenue to sustain themselves but are not exciting not major sources of revenues.

Cash Cows – These brands are important because of their cash generating potential. This means that they have a higher market share in a slow-growth industry. Very little investment is needed by these brands and funds generated from them are used to fuel Stars or Question Marks.

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[rahulrevne]

BCG Growth-Share Matrix

Definition

BCG matrix

 (or growth-share matrix) is a corporate planning tool, which is used to portray firm’s brand portfolio or SBUs on a quadrant along relative market share axis (horizontal axis) and speed of market growth (vertical axis) axis.

Growth-share matrix

 is a business tool, which uses relative market share and industry growth rate factors to evaluate the potential of business brand portfolio and suggest further investment strategies.

Understanding the tool

BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and its potential. It classifies business portfolio into four categories based on industry attractiveness (growth rate of that industry) and competitive position (relative market share). These two dimensions reveal likely profitability of the business portfolio in terms of cash needed to support that unit and cash generated by it. The general purpose of the analysis is to help understand, which brands the firm should invest in and which ones should be divested.

Relative market share. One of the dimensions used to evaluate business portfolio is relative market share. Higher corporate’s market share results in higher cash returns. This is because a firm that produces more, benefits from higher economies of scale and experience curve, which results in higher profits. Nonetheless, it is worth to note that some firms may experience the same benefits with lower production outputs and lower market share.

Market growth rate. High market growth rate means higher earnings and sometimes profits but it also consumes lots of cash, which is used as investment to stimulate further growth. Therefore, business units that operate in rapid growth industries are cash users and are worth investing in only when they are expected to grow or maintain market share in the future.

There are four quadrants into which firms brands are classified:

Dogs. Dogs hold low market share compared to competitors and operate in a slowly growing market. In general, they are not worth investing in because they generate low or negative cash returns. But this is not always the truth. Some dogs may be profitable for long period of time, they may provide synergies for other brands or SBUs or simple act as a defense to counter competitors moves. Therefore, it is always important to perform deeper analysis of each brand or SBU to make sure they are not worth investing in or have to be divested. Strategic choices: Retrenchment, divestiture, liquidation

Cash cows. Cash cows are the most profitable brands and should be “milked” to provide as much cash as possible. The cash gained from “cows” should be invested into stars to support their further growth. According to growth-share matrix, corporates should not invest into cash cows to induce growth but only to support them so they can maintain their current market share. Again, this is not always the truth. Cash cows are usually large corporations or SBUs that are capable of innovating new products or processes, which may become new stars. If there would be no support for cash cows, they would not be capable of such innovations.Strategic choices: Product development, diversification, divestiture, retrenchment

Stars. Stars operate in high growth industries and maintain high market share. Stars are both cash generators and cash users. They are the primary units in which the company should invest its money, because stars are expected to become cash cows and generate positive cash flows. Yet, not all stars become cash flows. This is especially true in rapidly changing industries, where new innovative products can soon be out competed by new technological advancements, so a star instead of becoming a cash cow, becomes a dog.Strategic choices: Vertical integration, horizontal integration, market penetration, market development, product development.

Question marks. Question marks are the brands that require much closer consideration. They hold low market share in fast growing markets consuming large amount of cash and incurring losses. It has potential to gain market share and become a star, which would later become cash cow. Question marks do not always succeed and even after large amount of investments they struggle to gain market share and eventually become dogs. Therefore, they require very close consideration to decide if they are worth investing in or not.

Strategic choices: Market penetration, market development, product development, divestiture

Advantages and disadvantages

Benefits of the matrix:

Easy to perform;

Helps to understand the strategic positions of business portfolio;

It’s a good starting point for further more thorough analysis.

Growth-share analysis has been heavily criticized for its oversimplification and lack of useful application. Following are the main limitations of the analysis:

Business can only be classified to four quadrants. It can be confusing to classify an SBU that falls right in the middle.

It does not define what ‘market’ is. Businesses can be classified as cash cows, while they are actually dogs, or vice versa.

Does not include other external factors that may change the situation completely.

Market share and industry growth are not the only factors of profitability. Besides, high market share does not necessarily mean high profits.

It denies that synergies between different units exist. Dogs can be as important as cash cows to businesses if it helps to achieve competitive advantage for the rest of the company.

Using the tool

Although BCG analysis has lost its importance due to many limitations, it can still be a useful tool if performed by following these steps:

Step 1. Choose the unit

Step 2. Define the market

Step 3. Calculate relative market share

Step 4. Find out market growth rate

Step 5. Draw the circles on a matrix

Step 1. Choose the unit. BCG matrix can be used to analyze SBUs, separate brands, products or a firm as a unit itself. Which unit will be chosen will have an impact on the whole analysis. Therefore, it is essential to define the unit for which you’ll do the analysis.

Step 2. Define the market. Defining the market is one of the most important things to do in this analysis. This is because incorrectly defined market may lead to poor classification. For example, if we would do the analysis for the Daimler’s Mercedes-Benz car brand in the passenger vehicle market it would end up as a dog (it holds less than 20% relative market share), but it would be a cash cow in the luxury car market. It is important to clearly define the market to better understand firm’s portfolio position.

Step 3. Calculate relative market share. Relative market share can be calculated in terms of revenues or market share. It is calculated by dividing your own brand’s market share (revenues) by the market share (or revenues) of your largest competitor in that industry. For example, if your competitor’s market share in refrigerator’s industry was 25% and your firm’s brand market share was 10% in the same year, your relative market share would be only 0.4. Relative market share is given on x-axis. It’s top left corner is set at 1, midpoint at 0.5 and top right corner at 0 (see the example below for this).

Step 4. Find out market growth rate. The industry growth rate can be found in industry reports, which are usually available online for free. It can also be calculated by looking at average revenue growth of the leading industry firms. Market growth rate is measured in percentage terms. The midpoint of the y-axis is usually set at 10% growth rate, but this can vary. Some industries grow for years but at average rate of 1 or 2% per year. Therefore, when doing the analysis you should find out what growth rate is seen as significant (midpoint) to separate cash cows from stars and question marks from dogs.

Step 5. Draw the circles on a matrix. After calculating all the measures, you should be able to plot your brands on the matrix. You should do this by drawing a circle for each brand. The size of the circle should correspond to the proportion of business revenue generated by that brand.

Examples

Corporate ‘A’ BCG matrixBrandRevenues% of corporate revenuesLargest rival’s market shareYour brand’s market shareRelative market shareMarket growth rateBrand 1$500,00054%25%25%13%Brand 2$350,00038%30%5%0.1712%Brand 3$50,0006%45%30%0.6713%Brand 4$20,0002%10%1%0.115%

This example was created to show how to deal with a relative market share higher than 100% and with negative market growth.

Corporate ‘B’ BCG matrixBrandRevenues% of corporate revenuesLargest rival’s market shareYour brand’s market shareRelative market shareMarket growth rateBrand 1$500,00055%15%60%13%Brand 2$350,00031%30%5%0.17-15%Brand 3$50,00010%45%30%0.67-4%Brand 4$20,0004%10%1%0.18%

Sources

Wikipedia (2013). Growth-share matrix. Available at: http://en.wikipedia.org/wiki/Growth-share_matrix

Costa, C. (2012). Evaluating Product Lines Using the BCG Matrix (VIDEO). Available at: http://www.youtube.com/watch?v=Uuuxs9gO8C0

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Meet 40 Young Business Leaders Selected by BW Businessworld for Its 2nd Edition of 40 Under 40 Awards and Summit

All the selected Young Business Leaders below the age 40, have demonstrated exceptional contribution in their work and personal growth.

Businessworld has announced the final 40 winners of the 2nd Edition of 40 Under 40 Awards and Summit on September 27, 2018 at The Leela Ambience, Gurugram. All the selected Young Business Leaders below the age 40, have demonstrated exceptional contribution in their work and personal growth. They have built new businesses or are making a difference in the success of their companies. They are benefitting and influencing a large section of businesses, communities (in which they live), and the overall economy with their disruptive innovation in this world. 

The selected winners were facilitated by Mr. Ramanan Ramanathan, Mission Director, Atal Innovation Mission : Government of India; Mr. T.V. Mohandas Pai, Chairman, Manipal Global Education; Dr. Annurag Batra, Chairman & Editor-in-Chief, BW Businessworld; Mr. Suman K Jha, Chief Editor, BW Businessworld; and Mr. Vinesh Menon, CEO—Education and Skilling, VIBGYOR Group of Schools.

Below is the brief description about each of the winners:

Aakash Chaudhry is the Co-Promoter and CEO at Aakash Educational Services Ltd (AESL). The company is synonymous to being a leader in the test prep industry catering to the Education Sector. With an onboard employee strength of 4300+, it has created a landmark in Coaching industry.

Abhijeet Kumar is the co-founder of ah! Ventures, a Mumbai-based early stage fund raising platform with 55,000-plus entrepreneurs, 2,000 plus investors, Rs 130-plus crore invested in 35 startups and three profitable exits.

Abhishek Bansal is the co-founder and CEO of Shadowfax, a three-year old venture, already India’s market leader in the Online-2-Offline (O2O) logistics segment. Abhishek aims to make Shadowfax the largest last mile logistics provider in the country, not too far in the future.

Amit Wadhwani is founder of Sai Estates Consultants Chembur Pvt Ltd (SCCPL), a shining name on real estate’s sky. They hope to float public issue, grow to a 500-member team and have an office each in 30 countries.

As a sustainable livelihood lead Amruta Bahulekar is a prime pillar in the ‘Pune City Connect’. She is head of a program which is Lighthouse project. It is a collaborative initiative of Pune City Connect and Pune Municipal Corporation for skills development and sustainable livelihood.

Ananya Birla is the founder at Svatantra Microfin that was conceived out of a desire to help the unbanked, is the fastest growing mid size MFI today. She has always believed in giving back to people but in a sustainable way and micro-finance was perfect for it.

Anirudh Pandita is founder at Pocket Aces, one of India's fastest growing digital entertainment companies. The company is actively leveraging data and technology to create and distribute engaging content for the mobile-first consumer. 

Arjun Zacharia is the founder of Wooplr, India’s first and largest Social Commerce Company which has about 100 employees with offices in Bangalore, India and Hangzhou, China. 

Azhar Iqubal is Co-founder and CEO at Inshorts that aims to become a global content unicorn out of India with a billion users in the next 5 years.

Chiranjiv Patel, MD of PC Snehal Group of companies which is well established in government infrastructure sector by rising big structures like sports complexes, hospitals, flyovers, underpasses, water distribution networks, drainage systems and power projects.

Dheeraj Jain is an Investor turned Entrepreneur. He initiated Redcliffe Capital which is a venture capital and special situation investment firm, with investments in more than 45 early-stage companies who directly employ more than 5000 talent. He expanded Redcliffe across consumer brands, B2B, Big data, healthcare, urban commute, F&B, Travel. 

Dhruv Lakra is the Founder & CEO at Mirakle Couriers, a for-profit enterprise with especially abled employees! It was founded in 2009 with an idea to support a social cause.

Divya Jain is a social entrepreneur who has worked to disrupt the supply chain & logistics industry through innovative and nationwide skill development programs. She is the Founder & CEO of Safeducate, India’s largest supply chain skilling company.

Harsh Shah is the Co-Founder of ‘Fynd’ an emerging name in Fashion trend setters over retails. ‘Affinity for fashion and high quality merchandise’ and this is what makes fynd, the online shopping experience different from other similar sites. 

Jatin Ahuja is the Founder of Big Boys Toyz (BBT) who dared to start a specialty site that deals in pre-owned super luxury automobiles in India. 

Karan Kumar Gupta is the Co-founder/Managing Director of Zirca Digital, a company that provides cutting-edge digital advertising and branded content solutions to several brands. Gupta also manages Aidem Ventures, a broadcast advertising solutions company and Inez Terra, a real-estate development company based in Mumbai and Pune.

Karan Mohla is Partner at IDG Ventures India as well as the Head of Consumer Technology & Media. He is now responsible for getting investors and partners for the fund as the Lead or fundraising from Asia, as well as the Lead for developing relationships for the fund and portfolio companies. 

Kranti Gada is the COO at Shemaroo which is disrupting the dynamics of the entertainment industry every day. More than 700 media and entertainment professionals are involved with Shemaroo’s vast media empire. 

Krishna Kumar is founder & CEO at Cropin Technology, a funded startup that has made phenomenal contributions in cutting-edge technologies such as Big Data analytics, Artificial Intelligence, Geo-tagging and Satellite monitoring to interconnect all the stakeholders at different levels of the agriculture ecosystem. 

Kumar Abhishek, in 2013, conceptualized the idea of ToneTag, a unique concept that harnesses the power of sound to enable payments and proximity customer engagement, eliminating any hardware dependency. Kumar aspired to bridge the last mile in financial inclusion, thereby delivering a payment experience that envelopes the critical masses irrespective of geography, internet connectivity and hardware dependency. 

Manu Kumar Jain, a leading Indian entrepreneur who co-founded Jabong.com, a fashion and lifestyle e-commerce portal in India and served as its Managing Director from February 2012 to January 2014. Currently, he is the Global Vice President of Xiaomi as well as the Managing Director of Xiaomi India.

Nagendra Nagaraja, CEO and Founder at AlphaICs, actualised his dream by inventing an agent-based Real AI Processor (RAP), which is creating disruptions in AI applications. In other words, its product lines are used in Drones, Robots, Autonomous Vehicles, UAV, IOT Analytics, Cloud Computing and even supercomputers.

Neeraj Biyani is the co-founder & COO at Paper Boat, India’s fastest growing consumer brand. The company currently employs over 530 people distributes their products in over 50,000 outlets and exports to over 10 countries. 

Nibhrant Shah is the founder and CEO of Isprava which represents the luxury real estate sector and has over 120 employees working within it.

Nitin Pandey, Founder and CEO of Parentune, a pro-parent community and a technology startup in the space of Babytech & Parenting. 

Nitin Saluja, Founder and CEO of Chaayos, India’s largest and most loved chai café chain. In a short span of five years, he has created India’s most loved chai café chain with 53 cafes across seven cities Delhi, Mumbai, Noida, Gurgaon, Chandigarh, Ambala and Karnal, and 800-member team. 

Nitish Mittersain is the Founder and Managing Director at Nazara Technologies. Incubated in the year 2000, with its headquarter in Mumbai, Nazara Technologies is a global mobile gaming company that caters to large mobile consumer base in India and emerging markets including the Middle East and Africa. 

Paramdeep Singh is Co-founder and Executive Vice Chairman of Saavn, India's leading digital music streaming service, transforming how people around the world access and experience music on a daily basis. 

Prashant Parameswaran is a founder and managing director of Kottaram Agro Foods Pvt Ltd, brand owner of Soulfull. Soulfull is now present in categories of Breakfast Cereals, Muesli, Millet based Snacks & Millet Health Drinks. The range of products is presently in 5000 stores across 12 cities and will scale this year to 20,000 stores. 

Rana Daggubati, is an Indian actor, producer, visual effects co-ordinator and photographer. 

Raviteja Dodda is Founder & CEO at MoEngage, a next-generation marketing cloud, built for the Mobile-first world. MoEngage works with consumer businesses across the world including Fortune 500 brands like Samsung, Deutsche Telekom (T Mobile), Vodafone, Hearst and Prudential.

Rishika Lulla is CEO at Eros Now is Eros International Plc’s On-Demand South Asian Entertainment Video Service accessible worldwide to viewers across internet enabled devices including mobile, web and TV. 

Rohit Chennamaneni is co-founder at Darwinbox, a new-age cloud-based HR Technology which takes care of all HR needs across the employee life-cycle like recruitment, onboarding, core HR, time & attendance, expense management, payroll, employee engagement, Talent management and HR. 

Rohit MA is the Co-founder and Managing Director of Cloudnine Group of Hospitals, India’s leading maternity and child care network of hospitals. Cloudnine as a group employs over 3000 people and as a primary employer obligation is responsible for over 4500 people across 20 locations in 7 cities. 

Sahil Vachani is the Managing Director and CEO of Max Ventures and Industries Limited (MaxVIL). He joined the Max Group in 2016 with a focus on creating a powerful Real Estate brand – Max Estates Limited, and steering MaxVIL’s other businesses towards growth. 

Satyam Darmora is an entrepreneur and founded i2e1 (Information To Every One). There are more than 60 employees that work at i2e1. i2e1 is working on a Free-Internet model for masses and is currently serving One million+ free internet sessions every month across multiple locations.

Tushar Mittal is Founder at Studiokon Ventures Pvt Ltd. In a rapidly advancing global marketplace, where businesses are focused on building empires, what sets StudioKon Ventures apart is its focus on defining relationships rather than contracts. StudioKon Ventures has grown into a $20 million corporate infrastructure company. 

Ujjwal Munjal is the Managing Director of Rockman Industries, a leading auto-components company in India, and the Founder of Hero Electronix, Hero Group’s venture into the technology space. He leads a team of over 7,000 employees at both the businesses.

Vivek Gupta is the co-founder of Licious, India’s fastest growing fresh meat and seafood brand with an employee strength of 650+ members across different disciplines and functions. 

Zishaan Hayath is the co-founder and CEO of Toppr.com, an edtech company on a mission to make learning personalised. The company has an employee strength of over 1400, with its headquarters in Mumbai, and regional offices in 25 Indian cities.

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[rahulrevne]

Love

Friends, Today I am writing on a different topic. After writing on topics like motivation and business topics, I choose different topic to write. So, Today I choose to write on Love. Before you read further. I want to clarify one thing with all of you that “I am not against LOVE”. But recently I came to know about so called love story…And I am expressing my views on the same. Love...Seems everybody have their own definition for it. Everybody wants to be loved but everyone is not good at it, but the question still remains- what the LOVE is? "You're my babe", "my sweet heart”, “I love you", but only if you're with me. Is this Love. Or To have a physical attraction which is famous now a day… is Love. In today’s fast changing world, what today’s guys/girls are doing, they chat 6-7 days and then start feeling that they have fallen in love & act in same way. Then they propose, hang out and break up within a month or 6 months. Some convert their love in marriage also where some get success and some fails. Now days, whenever we ask a couple who are in love that what will you do after your marriage, what are your plan, how will you earn your bread and butter. Answer is NO IDEA. And the fact is that they are in love and want to marry with each other. Just want to share one of my poems when person is in love, The cold breeze tickles my skin Eyes filled with freshness and heart feels cold Thunder is surrounding, waves are approaching But everywhere I see her…I see her...I see her... On a full moon day her illusion appears, And her eyes appear in the sparkling stars, And her laughter echos in gentle flow of stream But everywhere I see ...I see her...I see her.... Though we are miles and miles away from each other But our hearts are one Though she is not seen by me, Yet everywhere I see ...I see her...I see her… If this is the love then what can I say for this,

Someone makes you smile when you’re tired

When our mommy makes coffee for daddy and she takes a sip before giving it to him, to make sure the taste is OK.’

When your puppy licks your face even after you left him alone all day.’

When mother cares for you a lot, no one care for you like her.

When your father always wears that loose socks but he never let you wear that. He bring for you new one.

When your younger sister take care of yours when you are ill and lying on bed.

When your brother cries for you at your bad time and make you sure that you are not alone.

When a sister tie a great bond in her brother hand without any demand.

When they are not only friends they are your great supporter and backbone, gem of your life.

And there are many more…list is endless. But still we forget all these things and call our 20 or 30 days or I can say 2 to 4 months old relationship with love and forget years of relationship with our family members. Sometimes one unknown person is so important for us rather than family members. We loved that boy or girl who behave goody goody in front of us and forget our parents, brother or sister who always care for us. It has been observed that in many cases when someone is in love, they left studies, parents, family members, neighbors, each and every helping hand. Don’t have bright future. But they left the homes and feel its victory of Love. Sometimes I read in news paper also this type of incident that at the age of 20 they become parents.  They are not even aware what to do with that kid. And how they will do the upbringing of the kid and develop their carrier. Just want to ask some questions, What is love? Other person’s happiness is more than yours or our happiness is more than others. What is Love? When you bring smile or bring tears …. I just only want to say…. Love is a very small four letters word but the fathom of this word is deeper than the Mariana trench and altitude is higher than the Mount Everest!

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મેહમાન -સંતાન

After a long time, I wrote something. 1st 2 lines I read somewhere on Facebook and was written by Mr. Prashant Somani, which touched my heart. So I tried something. Hope you like it. Please share your views. 

લાગે કે જાણે કોઈ મેહમાન હોય છે, 

એવાય કેટલાક ને સંતાન હોય છે;

સંતાન કે નાનપણ માં તુફાન હોય છે,

એ જ માં-બાપ માટે એ અંજાન હોય છે;

જેનો જન્મ માં-બાપ માટે અભિમાન હોય છે,

શું  એ માં-બાપ એના માટે અપમાન હોય છે;

સંતાનો ના સ્વપ્ન પૂર્ણ કરવા માટે એ સભાન હોય છે,

છતાં એ જ સંતાનો ને એમની ક્યાં ભાન હોય છે ;

ભલે એમની વર્તણુક મેહમાન ની જ હોય છે,

છતાં માં-બાપ માટે એ પોતાની ની સંતાન ની જ હોય છે.

                                  - રાહુલ રેવણે 

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[rahulrevne]

Distress Company

Some days ago, I learnt or I can say I recollected in my mind that whenever you want something don’t just think positive. Always ask, why do I require? I asked myself “why am I working as a business consultant?” And received answer that I like to interact with entrepreneurs and that lead me to come in consulting business.

Being a consultant, I always believed that businessman should interact with other businessmen. He should meet and network. It gives him many insights and learning. So, with this thought, I grab the opportunity to visit Synova Gears with one of my client and met Mr. Jamanbhai one of the director of the company. I would like to present his thoughts on Distress Company and what we can do to not face this type of situation.

First and foremost let me throw some light on what is the meaning of Distress Company. I am sure enough many of you must be juggling with the meaning of the title. “Distress” generally means that the company is having difficulty dealing with its liabilities.

Now. Let’s see major points which help distress companies or I can say what we can do to not getting listed in Distress Company.

•Does your company have old employees? Generally it has been observed that being an entrepreneur we always believe in our old employees because they have given their sweat and blood. And actually they did. But whenever we try to implement any types of system or hire any type of consultant then these are the people who always oppose. But now, the time has changed. We have to hire new employees (new blood) because they are ready to change and adopt. Or else it will be better if we walk with combination of both.

•Are we unable to recruit people?: Generally it has been observed that we always depend on external agencies for recruitment. During my consulting experience, I found in many cases that my client’s requirement was sales people and placement agencies were sending people with accounting experience. I would like to share one example. One of my client required Mechanical Engineers, so he had approached Placement agencies. They sent Mechanical Engineers. During the interview. When client asked about micro meter, then he was surprised that majority of the people were not aware how to hold micro meter. I am not against any placement agencies but, I just want say that use are own sources & circle. May be it is possible that we can recruit people within time period.

•Difficult to survive in price war?:

During the discussion of this point Jamanbhai stated that sometimes it is necessary to enter with Low Price and then create your brand. Before that we have to make sure that our QCD (Quality, Commitment & Delivery) should be proper. In this competitive world if we are unable to provide quality, not able to fulfill commitment and not able to deliver on time then we have to think for our existence. So, work on your QCD, then start marketing with 360 degree and create your own brand. So that we can take our own price. Friends these are some points which we discussed with Jamanbhai – Director of Synova Gear. Apart from these we had discussed many points which I will share with you in next article. 

Today’s entrepreneurs don’t have all answers, yet they succeed because they are smart enough to know when to ask others for their input. So, keep asking questions. Remember one thing जवाब उसीको मिलता हे जो सवाल पूछता हे. & अच्छे जवाब उसीको मिलता हे जो अच्छे सवाल पूछता हे. Curiosity is the greatest teacher  in 21st century. So, keep asking.

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[rahulrevne]

Why is the Modi government not controlling the fuel prices?

Fiscal discipline.

It is relatively easy for a politician to give subsidies, handouts, price cuts. These all help people in the short term and help the politician get votes. However, they screw the country in the long term.

BJP workers would want Modi to cut oil prices. It is a quick way to appease their vote bank [middle class] and help them win elections. Why would Modi want to piss off the common people and lose votes? So many businesses that fund the BJP rely on petrol/diesel and would not reducing prices help the BJP appease them and get more funding? Is keeping high petrol prices helping Modi/BJP in any way?

When governments try to subsidise petrol/diesel [like they did in the past], there is a huge cost to the government. Somebody has to pay for it. Either more taxes on something else or less government spending on social programs. And paradoxically by trying to control petrol price, you take on so much debt that the inflation shoots up.

In fact, by maintaining the fiscal discipline the government is keeping the overall inflation low — India's August inflation seen easing below RBI's mid-term target : Reuters poll — despite the oil prices. It is the overall inflation that common people get affected the most — as that’s what affects their finances.

In fact, in 2018 budget [last budget of this term] Jaitley went for a little overspending — but still not out of control spending like in the previous era — to make it easy for their party workers to get some votes.

Figure: How much the government overspends?

It is easy for political parties to hoodwink people by reducing petrol prices [seen immediately] and lead to a process that increases overall inflation [often hidden in the short term]. But, Modi is resisting that temptation [for now]. When Modi starts cutting petrol prices [without decrease in crude prices] you can realise that the vote campaign mode is on. As a whole fiscal discipline is putting the economy in a healthy mode — growth without inflation.

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[rahulrevne]

Do you think that the introduction of the GST in India is a step towards a greater and developed nation?

The GST is truly a profound change fundamentally, despite all the rollout hiccups. One has to see it in the medium term to be optimistic about it.

It will transform the Indian economy in the following ways :

One India promise: Everyone will start thinking in terms of “India as a nation” and not merely in terms of their provincial loyalties. This happens because everyone’s fate is tied together through the GST Council (where all have representation). The downside? If anyone fails to make enough revenues, they’ll question the whole system. Let’s be fair: states have sacrificed their federal fiscal freedom to be a part of the GST regime.

Simple is better: The simplified tax regime will be a great relief for all honest businesses. The one thing everyone loves is minimum compliance load and maximum clarity. GST theoretically promises that. It will take until 2020 for the final shape to emerge, but the hope is strong. The downside? If rate slabs don’t get rationalized, it will remain an under-optimized and a compliance-heavy system.

Tax to GDP ratio is all set to improve due to ‘everything’ getting into the government’s official records. From our present 16.6% of GDP to a much bigger number, the journey will give a lot of leg-space to the government to do things it otherwise needed to borrow money for. The downside? If public services’ quality does not improve, people may question the whole idea of paying more taxes. This is the greatest conundrum facing public policy making as of now.

Big data, transparent analysis: The GSTN and CBDT will seamlessly share data, so indirect taxpayers cannot escape the direct tax net. And GSTN and DGFT too will share data so foreign trade data become instant, and trends that much clearer and policy-making easier. The downside? Too much power in state’s hand, some would say :)

Formalisation: The huge informal economy may slowly be turned into a formal one over a decade or so. It will have great pains attached but needs to be finally done in a manner that jobs destruction doesn’t happen. GST forces companies to go formal, but the process is not smooth as of now - it is “yanking the informal into the formal” approach. Women empowerment will get a boost as a key driver of poor women labor participation in India is the lack for formal sector jobs. The downside? Formal doesn’t equal profitable always. Many may simply go bankrupt in the process. Bad for everyone.

Overall, in 10 to 15 years, we will see the final shape of things. We hope and pray that the end result matches the great pain and sacrifices being made today.

Jai Hind!

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[rahulrevne]

Lessons on leadership from PepsiCo’s Indra Nooyi as she steps down as CEO

Indra Nooyi will step down as the CEO of PepsiCo after occupying the post for 12 years. She will be succeeded by Ramon Laguarta on October 3 and will continue to be a part of the PepsiCo's board until 2019. Indra had joined Pepsico in 1994 and in 2006 took over as the CEO from Steven Reinemund. Under her leadership, PepsiCo grew from $35 billion in 2006 to $63.5 billion in 2017.

Indra will continue to serve as the corporation's chairman until early 2019. On her stepping down, the 62-year-old said in a statement on Monday, "Leading PepsiCo has truly been the honor of my lifetime, and I'm incredibly proud of all we have done over the past 12 years to advance the interests not only of shareholders, but all our stakeholders in the communities we serve. Growing up in India, I never imagined I'd have the opportunity to lead such an extraordinary company."

Ramon, who will take over the reins, has served in several executive positions at PepsiCo for 22 years. Since late 2017, he has served as President of PepsiCo, overseeing the company's global operations.

Indra took to Twitter on Monday to express her faith in Ramon's abilities to take her position. "Ramon Laguarta is exactly the right person to help build on @PepsiCo's strong position and success. He has been a critical partner and friend and I am positive that he will take PepsiCo to new and greater heights in the years to come," she said.

Meanwhile, Ian Cook, PepsiCo's presiding director, lauded Indra's contributions to the growth of the company. In a statement, he said, "She has delivered strong and consistent financial performance, managing with an eye toward not only the short-run, but the long-run as well.”

Here are some of her most inspirational quotes on leading as a woman.

Indra also tweeted, "Today is a day of mixed emotions for me. @PepsiCo has been my life for 24 years & part of my heart will always remain here. I'm proud of what we've done & excited for the future. I believe PepsiCo’s best days are yet to come."

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[rahulrevne]

Is 5S Implementation At All Possible in Non-manufacturing?

It is no wonder that the service industries sometimes feel disoriented in the world of management-speak regarding business improvement. There is so much jargon floating around – ‘Six Sigma’, ‘5S’, ‘Kaizen’, ‘JIT’, ‘Kanban’ and so on. They do not commonly realize that these concepts are often as applicable to them as to the manufacturing sector.

It is true that the so-called ‘lean methods’ and other kaizen-style management practices initially proved their worth in the manufacturing sector. However, they are equally applicable to the service sector, provided some small adjustments are made.

Let’s take 5S for an example. ‘5S’ is a lean management concept which stands for 5 Japanese words beginning with the letter S. these are:

Seiri (organizing or arranging things)

Seiton (putting things in order)

Seiso (cleaning)

Seiketsu (standardization)

Shitsuke (discipline)

But to make them easy to remember, we might use some rough English translations, also beginning with S:

Sort

Set in order

Shine

Standardize

Sustain

The first ‘S’, ‘seiri’, refers to the task of sorting out the needful from the unnecessary, and discarding the former. It often turns out that stuff that seems useful initially, or has traditionally been considered a part of the work environment, is actually an impediment to work, and creates tension and friction in the workflow. ‘Seiri’ refers to their identification and subsequent removal from the workspace.

Next, ‘seiton’. This is the dictum that one must set the work area such that ‘seiri’ becomes possible, and anyone not natively belonging to that space can come in and find necessary items. This, of course, entails meticulous labeling of each piece of equipment, or, in the case of non-manufacturing industries, each device and instrument (whether material or conceptual) involved in the processes.

‘Seiso’ is cleaning up your workplace in an intelligent manner. A clean workspace stimulates the workflow, and livens up the work environment. So housekeeping must be a part of any workspace, and it is the responsibility of the workers to clean up after work in a way that also reviews ‘seiri’ and ‘seiton’.

‘Seiketsu’ standardizes the first three ‘S’-s once they are firmly in place. Processes and checklists are created and posted visibly in every work area, and workers are required to review them periodically to ensure that the daily requirements of ‘seiri’, ‘seiton’ and ‘seiso’ are being fulfilled. Thus the best practices are standardized across the work environment.And lastly, ‘shitsuke’ strives to maintain that all-important discipline among workers without which no implementation of 5S can ultimately be sustained. Quality, cleanliness and safety are all finally dependent upon how successfully the workers have imbibed the spirit of discipline.

As becomes clear from the above exposition, 5S requires careful planning based on detailed observation and collection of data. There is no magic formula for successful 5S. It is a slow and gradual process. Each organization must find out its own golden mean through precise measurements and intelligent analysis in interactive workshops known as ‘kaizen events’.

And that is probably the greatest difficulty that the non-manufacturing sector faces in trying to implement 5S. It is easy to observe, measure and record processes in a manufacturing unit. But non-manufacturing industries rarely have a natural measurement system. There is also considerable difficulty in recognizing what constitutes a process.

One formula that they can use is known as SIPOC. This is an abbreviation from the first letters of the five basic elements of production. And it must be remembered that even non-manufacturing industries are producers – not of material goods, but of services and social value.

SIPOC stands for Supplier, Input, Process, Output and Customer. In manufacturing, it is trivial to discern who is who and what is what. In other industries, it may take some careful observation and intelligent consideration to find out the Supplier, Input, Output and Customer. The issue may even be complicated by the fact that sometimes the Supplier may be the Customer – as is often the case in banking or healthcare.

However, once these have been ironed out, and the other four elements have been identified and labeled, what remains must be the PROCESS.

The task that then remains is to find out how best to apply 5S to that process.

Hundreds of non-manufacturing companies have already successfully implemented 5S to their processes, with astonishing savings in cost, time and human resource. These include public sector services, like government offices and courts of law. Implementing 5S in non-manufacturing is therefore no longer the chimaera it once was, but fully achievable with a little careful planning and intelligent thinking.

Peter Peterka is President of Lean Six Sigma US. For additional information on Six Sigma Green Belt or other Six Sigma Black Beltprograms contact Peter Peterka.

Author: Peter Peterka Google

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[rahulrevne]

How different is the work of Google, Facebook, Apple and Amazon in AI ? Who is going to win the AI race?

The last few weeks I spent time interacting with the AI teams of these different tech giants. Here is my quick summary.

Amazon and Microsoft control the cloud market [through which AI is going to be delivered], but they don’t have frameworks like Tensorflow [Google] or Caffe/Torch [Facebook] to give them a strong leg up.

Amazon and Facebook have the key channels through which AI is mostly accessed by the public [Alexa or Facebook messenger].

Amazon and Google have the best speech APIs and NLP.

Microsoft and Amazon provide the best computer vision APIs.

Microsoft and IBM have the best sales teams in this space and work with the widest range of partners to build the AI ecosystem.

Microsoft and Google provide ways to train models through services without worrying about the underlying ML frameworks.

Facebook provides support to the widest range of opensource AI projects, but don’t play the services game. Thus, they might not dominate the AI market.

IBM Watson is the oldest and perhaps the most complete of AI tools/services, but don’t engage well with small developers and thus their applications are limited. Their focus is mostly on the enterprise.

Google’s enterprise sales is weak, but it has perhaps the best of AI technology available both inside and outside. The question is just how well can they interact with the ecosystem and help build mission-critical applications.

Apple has a good AI team inside but unlike other companies, they don’t publish a lot of talk outside their company. No one knows what they do and from what is available public they are perhaps the weakest of the majors in this segment. Not surprisingly Siri has lost out to its competitors in terms of usefulness.

In short, it is a game where no one company really dominates. But, Google perhaps has a slight leg up over the others if everything is taken into consideration.

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[rahulrevne]

Why is India trying hard to build a better relationship with China? For example, the Indian PM Modi could not even wait for 5 weeks longer before June and visited China to see Xi in April in China? What has changed India's mind?

To jaw-jaw is always better than to war-war.

—- Winston Churchill

China needs India. India needs China. Thus, both countries keep looking to mend their fences than fight it out.

Just as India feels encircled by China, China feels encircled by the US. US has bases all over China’s east [Japan, Korea, Taiwan] and China’s relationships with its southern neighbors [Vietnam, Philippines] are not that good and marred by territorial disputes. US has a sizable influence there too. In the north, there is Russia/Mongolia with whom China has had often frosty relationships. China cannot afford yet another rival/enemy in its west too.

Thus, Xi has been in an effort to win its neighbors and reduce the tensions. China Counters Trump by Mending Fences From Japan to India

In the same way, Modi has been mending fences around the world. He enjoys great chemistry with major world leaders from Trump to Merkel to Abe to Netanyahu. Even with Pakistan, he made significant overtures in good faith [inviting Sharif to his inauguration ceremony and visiting him on his daughter’s birthday].

Unlike many hardliners at home, Modi knows how important it is for India to develop good relationships and how silly it would be to fight other countries given the monumental challenges at home.

India needs China’s approval to get into the NSG or UN Security Council. China has gone slightly hard on Pakistan recently as a result of the warming ties with India [Should Pakistan be alarmed as BFF China gets pally with India?]. We cannot afford to ignore this large a neighbor and this big an economic partner.

Modi’s critics thought he would be the big hawk fighting everywhere - whereas he has shown to be a dove building peace.

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[rahulrevne]

Business Lessons from Movie 'The Founder' https://ift.tt/2G3iGNo

[rahulrevne]

Business Lessons from Movie 'The Founder'

     Image Credit: The founder

Opinions expressed by Entrepreneur contributors are their own.

‘The Founder’ movie shows the story of Ray Kroc, a struggling salesman turned Founder of McDonald’s. In 1950s, Ray Kroc met Mac and Dick McDonald, who were running a burger operation in Southern California. Ray was impressed by the brothers' speedy system of making the food and saw franchise potential. Ray expands the McDonald’s restaurants through franchisees, pulls the company from the brothers and creates a multi-billion dollar empire. This movie teaches many important business lessons, a few of them are as follows:

Be Curious: Curiosity is an important characteristic to get fresh ideas.Ray Kroc was not able to sell his milkshake machines at many restaurants, but when he got an order of 6 machines from a far away restaurant, he got curious to understand why so many milkshake machines were ordered by a single restaurant. Here, he could have simply delivered the order, could have avoided travelling a long distance to figure out the reason, but he was curious and decided to visit the restaurant.

Explore New Ways: Just because something is not done in the past, doesn’t mean it can’t be done in the future. Innovators refuse to accept status quo and inefficiency. They explore new ways by taking inspiration and ideas from various fields. To improve the efficiency of their business, McDonald brothers Mac and Dick took the assembly line concept perfected by Henry Ford for cars and applied it to hamburger business.They optimized it for their business through chalk drawings on a tennis court and orchestration of their team members’ steps. They made sure that speed should not impact quality standards on everything from cleanliness to the number of pickles per patty.

Solve Customer Problems: When a business provides what customers need, it doesn't have to convince customers and look for them. Supply of the right product creates demand.Drive-in restaurants were already popular places in America but the wait was usually long, and often food was wrongly assembled when arrived. This was not the case at McDonald's. As compared to many other restaurants that Ray Kroc visited, McDonald’s was able to serve the high-quality food at lightning-fast speed and low cost without sacrificing quality. Though McDonald’s had huge lines, customers were happy with quality and service.

Think Big: Thinking big requires stretching the boundaries of possibilities. It enables acceptance of new challenges and creation of capabilities to overcome those challenges. McDonald brothers innovated and mastered the efficient restaurant business model and decided to have one best in a class restaurant instead of multiple mediocre restaurants. Ray Kroc thought big and with his persistence, he innovated and mastered the art of business expansion through franchisee model.

Sell Your Vision: Visionaries manage to get people on board by appealing to their emotions and aspirations. McDonald brothers were passionate about the product - hamburgers, whereas Ray Kroc was passionate about business potential. He convinced them for expansion through franchisees by making them visualize that “McDonald’s can be the new American church… And it ain't just open on Sundays.”

Select Right Partners: Partners should be selected for adding value instead of just giving their name and money.More than experience and resources, a strong desire to come up in life matters. To scale up McDonald’s, Ray Krock wanted to have multiple franchise owners who follow his guidelines of standardization, automation and discipline. Firstly, he selected a few rich franchise owners, but he found that they were not following his inputs. Later, he carefully selected hard-working middle-class individuals for their work ethic and ambition. This idea proved to be hugely successful as these new franchise owners were focused and willing to follow Ray Krock’s guidelines.

Look for Next-level Innovation: Instead of falling in love with one innovation, to remain competitive, it is important for businesses to spend time and effort in creating the next innovation. McDonald brothers brought efficiency by innovating assembly line operations for their restaurant. They focused on just a few high selling items such as burgers, fries, and drinks, and figured out an efficient way of order delivery. For scaling up the business, Ray Kroc introduced standardization, automation, and discipline. Later, for reducing the cost, Ray Kroc pushed a vastly cheaper powdered milk for the shakes as opposed to buying and freezing the ice cream.

Tolerate Frustration: Giving up on tough situations is an easy option, but with the ability to tolerate frustration, one can create his path to success. McDonald brothers refused or delayed on many ideas of Ray Kroc such as using powdered milk, tie up with Coca-Cola, renegotiation of contract terms, basement in store etc. Instead of giving up, Ray Kroc tolerated the frustration, for the time being, he had lesser power, found new ways and rules to make himself more powerful than McDonald brothers and then controlled the business terms and conditions.

Apply Fresh Perspective: Some of the greatest business models are created by looking at the challenges and situations from a fresh perspective.When Ray Kroc was going through financial challenges, he met Harry Sonneborn, a financial expert who gave him a new perspective that Ray Kroc was not in the food-service business, he was in the real-estate business. Harry showed him another way of making money off the deal with McDonald brothers on selling hamburgers and franchisees. This new way involved creating a real estate company that would buy up (or lease) the land on which all McDonald's would be located.

Carefully Negotiate Contracts: Well negotiated legal contracts create defenses and add to competitive advantages. Initially, Ray Kroc agreed to a complex contract that stipulated that all business decisions must go through the McDonald brothers. Later, instead of putting in writing the deal of providing 1% of McDonald’s earnings to McDonald brothers, Ray Kroc offered them a handshake deal on this term. The movie shows that McDonald brothers were legally forbidden from using their own last name on the signage of their restaurant and they were unable to prove their handshake agreement and were thus denied any royalties from the McDonald’s corporation.

(Views expressed are author's personal and don't necessarily represent any company's opinions.)

Original Author of this Article: Harsh Pamnani

Marketer & Author

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