A childish temper will make life hard for you. I used to have one, I would get upset and throw a fit over any little thing. It was silly and immature and I regret it now. Part of it was how I was raised, I know that, but I still wish I would have handled things better. I am glad I am different now, but I still get embarrassed when I think about my former behavior. At one point I was almost arrested for simple assault over waiting in line at a grocery store! That is out of control! And I had to hire a Lyndhurst disorderIy conduct lawyer. At least now I am different.
A few months after being sworn-in as the Prime Minister of India, Narendra Modi announced that he was doing away with the Planning Commission. According to Professor Ranjay Gulati of Harvard Business School, it made perfect sense given the kind of world we are operating in today. “Taking decisions under extreme conditions requires a model of leadership where you need to improvise. The earlier model of planning and organising is no longer relevant — you can’t rely on plans any longer,” he says. This change in approach has a direct implication on leadership and decision making, whether you are a political leader or a CEO.
Gulati cites the lesser known story of the second nuclear plant at Fukushima — Fukushima Daini — which didn’t blow up after the tsunami in Japan in 2011 though it was located barely 10 kms away. After the tsunami, there was one power line and diesel generator still intact, but three reactors lacked the power to achieve the cooling required to avoid the meltdown that eventually took place at the other plant. The site superintendent talked through the situation with his team, going over what everyone knew, and more important, acknowledged the evolving reality in which they were operating. The team worked through the challenges that kept coming up, resting only when the last reactor went into cold shutdown.
“In such a turbulent world, leadership is not about finding the right answer. It’s about giving people confidence that you will eventually find the answer,” says Gulati. For this to happen, it is essential for a leader to be flexible and open to adjustment. You can’t get hung up on a business plan. “It can’t be that ‘this is my plan and this is what my plan says and I will do what my plan says’. Plan is an ephemeral thing. You need flexible, adaptive leadership who can take decisions with incomplete information,” he says.
Gulati was in India recently to take business leaders through a session on how they can grow their organisations profitably by focusing on customer centricity. In a competitive marketplace when you can’t rely or lean on a superior product or brand, you need to be vigilant and align yourself with customers and connect with them in a meaningful manner. “Companies tend to fall into a competency trap and continue to focus on what they are good at and not what the customer wants,” says Gulati. While Kodak is an obvious example, Volvo is another company that seems to have fallen into this trap. While the company stood for safe cars in 2000, now that safety features in cars are a given, it still continues to talk about safety. “Customer needs change rapidly and talking to the customer isn’t always a solution. They may be able to articulate what their problems are but they do not necessarily know what the solution is. In a dynamic and changing market with more competition and greater choices companies need to learn how to maintain the edge,” he says.
One way for companies to survive is by playing in the middle. Organisations compete at different ends of the market, and often, it’s the middle that gets squeezed out. However, in many emerging economies, the middle is emerging as the acceptable alternative. When looking for the acceptable alternative, ascertaining the threshold of minimum acceptance needs deep thinking. In a value conscious environment like India, determining the threshold becomes a huge play because of the size of the middle class. However it’s also fairly complicated as it’s a far more diverse segment. The idea is to find an acceptable alternative – the way Zara isn’t high fashion, but it also doesn’t cater to the lower end of the market. “Operating in the middle needs more sophistication and it’s a hard task,” says Gulati.
His advice then to leaders, is to learn to subtract. Not the basic mathematical subtraction they learnt in elementary school but taking out things from the business which don’t add value. Addition is easy, but often companies end up adding things that the customer doesn’t really see value in. Banks are the biggest offenders, throwing in all kinds of freebies which customers don’t really care about.
“Subtracting is much more challenging. It’s about taking out cost, taking out features from a product or service. Companies are scared because they don’t know what to take out,” says Gulati. That doesn’t mean it can’t be done successfully. When SouthWest Airlines first came in, they took the travel agents out of the equation. Similarly, Micromax reduced camera quality to sell its phones at a lower price.
However, there’s no universal answer how to get this right. The problem with subtraction is also that typically it is finance which is in charge of these decisions and they rarely look beyond the numbers. Meanwhile, the sales and marketing guys who have their finger on the consumer’s pulse are averse to this idea – they love to add features. So it’s very hard to drive growth without a keen awareness of customer centricity and understanding what the customer sees value in.
“The trade-off on costs, service and solutions is much more significant in the middle. Companies, especially in emerging economies, need to become more adept at this as this is where the growth is,” he says. Mastering the art of subtraction to find this acceptable threshold becomes crucial then for companies that want to survive in the middle.
Business plans are to Raman Roy, the man who created four successful companies and initiated services outsourcing from India, what headlights are to a car. They can mean the difference between arriving and disaster. Currently chairman and managing director of Quatrro, his fourth venture, Mr Roy is a deft hand at starting from scratch. He has previously set up outsourcing centres for Amex, GE, and his own BPO venture Spectramind , which he later sold to Wipro.
“We were in a very fortunate position as we had seen three-four business evolutions before starting Spectramind,” recalls Mr Roy. As an employee of Amex and GE, he wrote the blueprint for offshoring work from America to India, with trained teams dealing with everything from customer care to remote radiology
It’s true that drawing up business plans for a large company and doing it for your own start-up are two very different experiences. But trying your hand at it in a large company before can come handy when you decide to plough a lonely furrow.
“The plan in Amex and GE was to generate returns, show what could be saved by doing work in India and the scrutiny was internal . For a running company that is starting a new business, the plan should justify investment and deliver, otherwise you are fired,” he said When Mr Roy and his team drew up the plan for Spectramind, his reputation at GE and Amex helped convince investors their idea was worthwhile.
“You can’t jump into a business without a plan. You need a business plan to guide the team. It’s like a car’s
headlight that shows the path. If you have no plan you don’t know what you are rallying around,” says Mr Roy.
Spectramind’s first business plan said in five years, the company would have 3,000 people . The target was revised midway to 5,000. The company ended up eventually with 15,000 back office workers in five years.
“We had put out a notice that trespassers will be hired. Yes, we were off the mark but there’s nothing like beating your own targets and with a business plan that keeps reminding you of the core principles. Growth was fun to manage,” he adds.
Plan for a business has to keep the ultimate vision in focus. In the case of Spectramind, the focus was on how much value the work is able to create for customers and how to increase that value. “Eventually all companies have HR, finance, technology, marketing, strategy and numbers to achieve. Much like the human body has a heart, lungs, kidneys, liver, a brain, etc, all working together to achieve the goal of a good life. And in case of a business plan, the goal is to create value that translates into a healthy P&L statement,” says Mr Roy.
For Mr Roy a business plan should contain a vision statement that tells you where you are headed. Moreover, you should be sure of what value you bring to the market or the customers you serve. And last but not the least, the team working on the plan is critical to its success. “Successful companies are not about one person but a team. You got to have people who are better than you for a great synergy,” says Mr Roy.
If you’ve been thinking of opening a wedding invitation business, let me just say, Do It! It’s very easy to do and, depending on which way you decide to go with your business, the start up cost can be as little as a few hundred dollars.
There are three types of wedding invitation businesses. The first type, where you work as a manufacturer’s representative, is probably the least expensive in terms of start up costs, and also probably the easiest way to get into the business, especially if you’ve never had your own business before.
In this business model, you simply sell the manufacturer’s ready made cards, you act as their representative in your area. They provide you with samples and order forms, and there’s usually some type of training or support system in place to help you when you have questions. Although there may be some small investment required to get sample books from the manufacturers, you don’t have to invest in any stock or supplies with this method.
If you’ve never sold wedding invitations before, this is a good way to start. All the work is done for you. The invitations are already printed and packaged, the order forms are already created and the pricing is already set by the manufacturer. All you have to do is sell the invitations and you earn a commission for each sale from the manufacturer. This way, you can concentrate on learning how to run a business, and the ins and outs of selling wedding invitations, without investing any of your own money.
Another option you have is to sell Bespoke. These are invitations that you create yourself from card stock, pretty papers and embellishments like ribbons and pearls and flowers. This type of invitation business requires the largest investment of time and money, usually $1000 to $3000, but also has the largest profits because you can set your own prices. And if you’re the artistic type, you’re creations can command a very pretty penny. This business model, though, requires that you have more than a basic understanding of business because, since you’ll be making the invitations yourself, you’ll have to know how to control your costs and how much mark up to include in order to make your business run profitably.
The third type of wedding invitation business, which is the best method in my opinion, is the combined business. In this case, you sell sell pre-made blank wedding invitations and stationery, that you get from a supplier, and you finish it off on your home computer. With this method, you’re not working for a manufacturer, you’re purchasing the blank invitations from a supplier. The cards are already decorated on the outside, all you have to do is print inserts for the invitations and other assorted cards, and then put the inserts inside the invitations.
Opening a wedding invitation business that concentrates on selling the combined invitations is really the best way to go because you have very little initial investment, only the few blank cards that you want to start off carrying, and you get to set your own prices. While not quite as profitable as selling Bespoke, this method is more profitable than if you were a manufacturer’s agent.
We know that taxation has got many advantages: they form the source of government revenue, they act as a tool to redistribute income, reduce inflation among many others. However, do you know that taxation also has its own limitations?
Well, issues of taxation are not just a preserve of the politicians. And complaining about high taxation is not just meant for the “selfish capitalist who doesn’t want to share.” There are many negative impacts of taxation in the economy, and that is why taxing business and individuals too much can easily lead to a decline in productivity.
It May Discourage Hard Work
In an effort to redistribute income from the rich to the poor, the government might find itself discouraging people from working hard to become rich, since with increase in income, the greater will be the increase in taxation.
For example, if someone knows that beyond a certain level of income, he will pay the government an extra 50 cents for every extra dollar he earns, he may be discouraged from becoming more enterprising. In the long run, this will reduce the productivity of the whole economy.
May Discourage Saving Habits
Since direct tax falls on income and not consumption, individuals may be penalized for saving money and investing it. Take a case where two people are earning the same amount of income during there working years. If each one of them earns $1,000,000 during their active years, they will be required pay the same amount of tax like $100,000. If one person decides to save and invest $200,000 and the other person decides to save and invest $100,000, the first person would have consumed less during his active years compared to the second person. If both persons earn then same amount of interest on their investments, the first person will earn more and taxed even more, and the second person will earn less and be taxed less. From this, you can see that someone will be tempted to avoid saving because there is actually no reward for saving money.
It May Discourage Foreign Direct Investment
Foreign investors look for opportunities to make money. For this reason, they are always looking for places or locations that are favorable to them. These are the locations that give them the chance to achieve their plans. High taxes may discourage investors from going into a particular country as these taxes will obviously eat into the income of the business entity.
With increased globalization, different countries aim to attract investors through a variety of measures such as reducing taxes and so on. It is therefore very easy for a company to move from one country to another simply because of the tax incentives offered in another country.
As people continue to debate about the importance of taxation and the negative effects of the same, it is important that governments understand that that although tax increases may seem beneficial in the short-run, they may end up being counter-productive in the long-term.
Do you care if your down-line network is growing in numbers? Or are they motivated?
If you are an individualistic person who only cares for yourself, you are in the wrong business. MLM members are independent and unsalaried sales people. In other words they are the company’s independent agents and they only earn their income from the sales they made.
Everyone in the network is working towards a common goal— that is to make money. To make money in the multi-level marketing business or MLM it needs members in a network to promote and sell the company’s products or services and they will be compensated with promotions and monetary gains.
Each member is directly dependent on the performance of their down-line for their success. If your down-line really is holding the reins that can make or break your business or can propel you upward in the network, then do you have the quality of a good leader that would make them work with you?
Quality No.1-Think big
A good MLM leader aims high and has big goals for himself and his down-line. If your targets are low and are easily achievable, you are not setting a high standard to follow. Besides he has to made their network popular so as to attract people to join them.
It is the job of the leader to motivate his down-line and provide them with the knowledge to recruit more members. The leader without a goal for his weekly and monthly targets will eventually fade and crumbles. Without a realistic targets, your down-line will not be motivated enough to push themselves. So as a leader you have to coach them and make sure they employ the right tactics on how to recruits.
Quality No.2-Be a guide to your down-line
Besides taking the initiative and motivating and guiding your down-line, leader has the responsibility to accompany recruits when they are out there prospecting. Other than conducting their own workshops and seminars, leader has to see that their down-line is doing it correctly too.
Quality No.3-Be results-orientated
To be a good leader, you have to lead by example. If you want your down-line to achieve a monthly $1,000 in sales, you must make sure you can top it up and sell $2,000. If you want them to get three new prospects every month, be sure that you can recruit more than three to show that you walk your talk.
Quality No.4-Be an inspiration to your down-line
Your results you have achieved will inspire them to work harder. People are motivated by successful individual who can prove to them that with hard work and the right strategies and tactics, anyone can also have the same success as you do. Sometimes you have to brag about your new sports car you have just bought or the new house in Beverly Hills you have just moved in to show them that your business opportunity works. After that, what you say gets noticed and you have just earns their respect as a leader.