Crucial Conversations

“The single biggest problem with communication is the illusion that it has taken place” Bernard Shaw

Crucial conversations are the ones where (a) stakes are high (b) opinions are opposite (c) emotions run high. Unless they are handled well, they do not create the desired outcome and leave both the parties unsettled, defensive, or offended. The need for crucial conversations happens because (a) people avoid holding necessary dialogue up front (b) people try to discuss  but handle things poorly. 

“Nothing in this world is good or bad, but thinking makes it so” - William Shakespeare

STEPS 

1. Share your facts : Start with least controversial, most persuasive elements from your path to action
2. Tell your story : Explain what you are thinking and feeling
3. Talk tentatively : State your story as a story – don’t disguise it as a fact or come on too strong  
4.  Ask for their facts and stories  : Encourage others to share both their facts and stories 
5. Encourage testing : Make it safe for others to express differing or even opposing views

DO NOT TELL ANY OF THESE STORIES TO JUSTIFY YOUR ACTIONS
TAKE RESPONSIBILITY

1.      Victim Stories (It’s Not My Fault) ”What is my role in the problem?

2.      Villain Stories ( It’s all your fault) “Why would a rational & decent person do this?

3.      Helpless Stories ( There’s Nothing Else I Can Do) What should I do right now to move toward what I really want?

"A successful man is one who can lay a firm foundation with the bricks others have thrown at him."

Strategic Marketing for High Tech and Innovations

Learnt from Prakash Bagri

1. Moore's law applies not only to the Processing Power but also to the storage and connectivity. All 3 are galloping ahead and the prices are falling. 
2. Intel was initially chasing the processing power (Hz) "S Curve" and were finding diminishing returns and also finding that the pursuit will lead them to quickly hit the "heat barrier" which will need bulkier heat sinks and fans to operate the chips. They changed the "S Curve" just in time and went after chips running on lower voltage and hence wont need bulky heat sinks. This created Centrino which opened the laptop market in a big way.
3. "Feature Fatigue" is when you give so many features that the choice overwhelms and acts against itself

19 Rules To Live

1. Do more than you are expected to do and do it cheerfully. 
2. Marry someone whose talk and presence you like.
   It will remain in the old age. 
3. Dont  believe all you hear. Dont spend all you have.
   Dont sleep all you want.
4. When saying"I love you" mean it. 
   When saying "'I am sorry"; look the person in the  eye.
5. Be   engaged at least six months before you get married.
6. Believe in love at first  sight. 
7. Never laugh at anyone's dreams.
   People who don't  have  dreams don't have much. 
8. Love  deeply and  passionately.
   You might get hurt but  it's  the only way to live life completely. 
9. In  disagreements,  fight fairly. No name calling. 
10. Don't  judge people by their   relatives. 
11. Talk slowly but think   quickly. 
12. When  someone asks  you a question you don't want to  answer, 
    smile and ask, 'Why do you want to  know?'
13. Remember  that great  love and great achievements involve  great  risk.
14. When  you lose, don't  lose the   lesson. 
15. Remember  the three  R's: Respect for self; Respect for  others; 
    and Responsibility for all your actions. 
16. Don't  let a little  dispute ruin a great friendship. 
17. When  you realize you've  made a mistake,
    take  immediate steps to  correct   it. 
18. Smile when picking up the phone. 
    The  caller will hear it in your  voice 
19. Spend  some time  alone.

Quotes on Market Research

• Measure with a micrometer, mark with a chalk and cut with an axe.
• When giving a forecast give them a number or the time but never both
• Figures don't lie but liars figure
• It is a capital mistake to theorize before one has data. 
• he way to do research is to attach the facts at the point of greatest astonishment.
• Some people use research like a drunkard uses a lamppost: for support, not illumination.
• Torture numbers, and they'll confess to anything.
• When we cannot express something in numbers, our knowledge is meager.
• There are three kinds of lies: lies, damned lies and statistics
• There are two kinds of statistics, the kind you look up and the kind you make up
• Facts are available to everyone; it is interpretation and implementation that is key

How does their tribe thrive ?

More and more shops in Indian metros are looking like high street shops. They sell  expensive brands, products are displayed in fancy ambiance and the shops have attractive facades. They sell things like shoes, apparel, fashion, furniture and novelties. But the curious fact is that they do not seem to have too many customers who actually buy ! So, if they do not make much money; how does their tribe thrive?.

First, these shops do not invest in things that are on sale in these shops : the merchandise is funded by the vendors of the store. All that the shop owner provides in the real estate and the fancy interiors; the rest is provided by the vendors on credit. The vendors get paid well after the goods are sold by the store to its  customers in cash. In other words, the investment of the shop owner in the working capital is negative ! The shop owner in fact converts the financing provided by the vendors into real estate.

Retailing is actually a financial business. If you have an attractive shop, you can get many vendors coming to you areal estate is one of the few areas left where you can invest black money - of which there is plenty around and people who have it are looking for ways to use it rather than stash it. Hence funding is no problem. As stated above the working capital is fully funded. The unrealized returns - property appreeciation - is what everyone is after. Their only intention on a month to month basis is to break even : as long as salaries are paid and power costs are met; they are happy.

These store owners buy more real estate, buy more stock and use this higher clout to extract better price and more credit. Where does that leave the suppliers ? The suppliers have two choices - to become cost leader to compete with others, to become more innovative and different or to create a brand pull that will force the retailers to keep your stock. With decades of cost reduction, the vendors cannot really do much on costs. The pull creation is expensive. Innovation in the value chain is the real route left now to exploit.

Tips to Managers ( People and Performance)

• Fix the problem, not the blame. It is far more productive, and less expensive, to figure out what to do to fix a problem that has come up than it is to waste time trying to decide who's fault it was.
• Tell people what you want, not how to do it. You will find people more responsive and less defensive if you can give them guidance not instructions. You will also see more initiative, more innovation, and more of an ownership attitude from them develop over time.
• Manage the function, not the paperwork. Remember that your job is to manage a specific function within the company, whatever that may be. There is a lot of paperwork that goes with the job, but don't let that distract you from your real responsibility.
• You get what you pay for. Yes it is an old saying, but it is still true. Whether you are paying for machinery, software , advertising, or people you ultimately get what you pay for. Always buy the best you can afford. Quality always comes through.
• Don't DO Anything. Your job as a manager is to "plan, organize, control and direct." Don't let yourself waste valuable time by falling back on what you did before you became a manager. We know you enjoy it and you are good at it. That's why you were promoted. Now you need to concentrate your efforts on managing, not on "doing".
• Anyone can steer the ship in calm waters. What will set you apart in your career is how you perform during the tough times. Don't become complacent and relax just because things are going well. Plan ahead for the downturn.
• You have to make a difference. The group you manage has to be more effective, more productive with you there than they would be if you were not. If they are as productive without you, there is no business sense in keeping you on the payroll.
• Delegate the easy stuff. The things you do well are the things to delegate. Hold on to those that are challenging and difficult. That is how you will grow.
• Don't get caught up in 'looking good'. "Work happily together. Don't try to act big. Don't try to get into the good graces of important people, but enjoy the company of ordinary folks. And don't think you know it all. Never pay back evil for evil. Do things in such a way that everyone can see you are honest clear through."
• Leaders create change. If you lead, you will cause changes. Be prepared for them and their impact on people within, and outside, your group. If you are not making changes, you are not leading.
• Practice what you preach. To lead, you have to lead by example. Don't expect your people to work unpaid overtime if you leave early every day. Don't book youself into a four star hotel on business trips and expect your employees to stay in the motel off the freeway.

Kotler's Book is an encyclopedia and not a textbook

Batch 31 participants asked me yesterday they cannot find the MVG model anywhere in the prescribed textbook of Kotler. I had to tell them that, while it is a standard and up-to-date textbook on marketing; it is so wide in scope and meant for so many difference audiences that any one audience finds it bewildering.  I told them that is why I have created a superstructure that will enable you to understand how everything is "connected" to each other in marketing. While the word "MVG Model" is my own creation, the underlying concept is universal that the output is a function of 3 concepts Market, Value Proposition and Go To Market and that they are interconnected. If you ponder a little it will become clear that the output of your marketing activity - whether measured as sales, market share, price realization or profitability - depends on

1. Market : This involves analyzing how many customers, their needs, their readiness, their behavior, their habits, the prices they are willing to pay, competitors and their activities, collaborators and their activities .. and choosing your target customers. There are 5 chapters relevant to analysis are 3 (Env scanning), 4 (Market Research), 6 (Analyzing consumer markets), 7 ( Analyzing Business Markets) and 21 (Global Markets). There are 2 chapters relevant to choosing target markets are 5 (Customer Value) and 8 (Segmentation and Targeting) 
   
2. Value Proposition : This builds on - and is linked to the choice of the market - because you cannot create value (product, service) unless you know who the customer is, and who the competition is, and unless you are clear what the positioning is. There are 3 chapters 9 (competition), 10 (Brand equity), 11 (Positioning). Once you decide value proposition, you can work out product specifications and pricing and there are 4 relevant chapters are 12(products), 13 (services), 14 (pricing) and 20 (New Products)
3. Go-To-Market : The value proposition needs to be taken to the right places where customers are searching for you (gathering) - or you need to search for the customers (hunting). You need to prospect, contact, communicate, convince, close and transact and set up mechanisms for doing so. There are relevant 5 chapters are 15 (channels), 16 (retailing), 17 (communications), 18 (mass media), 19 (personal selling)        

I am Fear - that's who

"I am fear. I am the menace that is invisible to the eye but sharply felt by the heart. I am the father of despair, the brother of procrastination, the enemy of progress, the tool of tyranny. Born of ignorance and nursed on misguided thought, I have darkened more hopes, stifled more ambitions, shattered more ideals and prevented more accomplishments than history could ever record. I assume many disguises. I masquerade as caution. I am sometimes known as doubt or worry. But whatever I'm called, am still fear, the obstacle of achievement. I know no master but one. It's name is understanding. I have no power but what the human mind gives me, and I vanish completely when the light of understanding reveals the facts as they really are, for I am really nothing."

Last minute 2 lectures on strategic cost management

Introduced the concept of V-P-C (Value-Price-Cost) through taking an actual case of ECOSS ( a new case authored by me being published by Richard Ivey). The class grasped the point quickly that the "negative features" of village tourism - like not having a TV, not being able to order food a la carte, not having a swimming pool - are actually positive features for some type of tourists who have "been there and done that" and realized that all hotels are the same but staying with people is an experience. Thus, for such customers, ECOSS need not fear of competition from 5 star hotels even if they exist. Hence the principle that "Value is subjective, Cost is Objective and Price is your decision". I took examples for B2C and B2B businesses to explain this.

From a purely economics point of view the "customer gets the product for which he pays a monetary price". From a strategic perspective, the value (defined as something for which the customer will pay money for) is driven by 4 drivers ( product, facility, expertise and image) and the price is driven its own 4 drivers ( money, time, hassles and risk ). I gave plenty of examples of each of these 8 things. I normally use this framework to show that there is really no commodity in actual life - it is we who make anything into a commodity by not being able to differentiate.

The real challenge lies in figuring out which drivers add more value than they add to the costs. The business lies in the skill to recognize which costs are value creating and which costs are non-value creating. You can create "positive net value" by retaining (or even increasing) the costs that create net value. Net value can also be added by reducing costs (or even drop) which do not create a proportionate reduction in the value. Both cost increase and reduction can increase profitability. ( I could have introduced prof Kano's model but did not ) (but you can) 

I defined the objective of the course as "being able to identify which costs you should incur more / less of so that the net impact is positive on P&L and B/S". I also introduced the concept of financial and intangible assets. Intangible assets being relational, structural and human".

I also mentioned about inside-out costing - that in a seller's market you can incur whatever cost you want and add your profit and still sell at the resulting price. But in a competitive market you are squeezed by markets on both sides - customers will pay you only a competitive price. And the vendors too will charge you what your competitors are paying. Both the prices and costs are not controlled by you and what remains is the price. Therefore the key to operating in competitive markets becomes aiming at the right markets and positioning yourself well so that you get the right price and incurring only those costs which create net positive value.  

I also took the example that the value is holistic and not attached to a feature. If you see the feature of an expensive car being non air conditioned you would laugh till you realize it is a formula car! Same for shopvac

When will iPhone 5 come and what will it be like?

Apple is really good at managing the portfolio of all segments of customers. Consider the latest baby from the stable of Apple. Most marketers would have called the phone as "iPhone 5" and probably this strategy would have sold more of the product. But Apple is cleverer than that!

If they had called their new product as "iPhone 5",  their signal to the market would have been that here is the next generation phone. What is wrong with that ? Everything; if you are an existing iPhone 4 user because you bought it just an year ago and are still under the 2-year warranty. You would not like being made so obsolete so soon by the brand you trusted.

The naming of the new phone as "iPhone 4S" clearly suggests they do not want the market to see it as a new generation phone but as a "tweaked upgrade". Its target audiences are primarily 70 million iPhone users who bought it before "iPhone 4" was launched - and of course 1 Billion Non-smartphone users and  of course smartphone users of other brands and platforms - Blackberry, Android and Nokia. When so many segments are still open, why would anyone make existing customers cross?

What will be the right timing for the iPhone 5 - the "next generation" - to come? I think it will be in the latter half of 2012. The iPhone 4 was released in the summer of 2010 and I suspect the people will begin coming out of warranty that time. What will iPhone 5 be like? It has to meet the following challenges : it has to be significantly better for iPhone 3G and 3GS users. It has to attract non-smartphone users to want to upgrade to it or the free 3GS instead of an Android phone. It has to be better then Android and Blackberry.

Motivational Quotes

"A person who never made a mistake never tried anything new."
- Albert Einstein

"Life is 10 percent what you make it and 90 percent how you take it."
- Irving Berlin

"You have to expect things of yourself before you can do them."
- Michael Jordan

"You'll see it when you believe it."
- Wayne Dyer

"Desire is the starting point of all achievement, not a hope, not a wish, but a keen pulsating desire which transcends everything."
- Napoleon Hill

"Set your course by the stars, not by the lights of every passing ship."
- General Omar N. Bradley

"The bad news is time flies. The good news is you're the pilot."
- Michael Altshuler

"Even if you're on the right track, you'll get run over if you just sit there."
- Will Rogers

Dr Shrikant Datar's Leadership Workshop

Notes taken from the workshop

Important : How to exercise judgement and How to exercise leadership.

3 aspects of leadership are path finding, problem solving and implementing. B schools focus only on problem solving and not enough on the other two.

Current academic approaches to leadership are trapped into OB area because structurally they seem to be the owners of leadership courses.

In current systems of teaching the terms and turf is set by the teacher and the students do not have much say.

SAMEER BARUA

"Knowing" is taught in classrooms, "Doing" is done in simulated environments and "Being" can happen in events that happen outside the classroom

"Doing" means executing tasks as a team member, executing a project, conducting performance review, designing and making effective presentations, selling products, acting innovatively.

To have the right "being" is very important in getting things done through others (because merely knowing and doing yourself is not sufficient). Purpose of business, responsibilities of a leader, inspiring, influencing and guiding others, recognizing the impact of one's actions and behavior on others, building awareness of one's own personal strengths and weaknesses.

Can there be science without humanity? management without morality ?

ATANU GHOSH

Exercise : an external leader is assigned to a group of 6 students who interact with him and understand his style. Then the compare and contrast his style to that of the other leaders chosen by other groups.

Indian philosophy says  people learn from 4 sources (1) Teacher (2) Self reflection (3) Experience (4) Learning From others,

Exercise : Reflective note writing

XLRI makes it compulsory to spend 3 weeks in rural areas before you join the course.


A leader must have mindfulness, compassion (when you help others, you actually help yourself), ethics, sustainability, diversity (everyone is unique - different types of intelligences, how to leverage your uniqueness)

Leadership means taking responsibility for who you are. Enthusiasm comes out of leveraging your gifts to serve others.

We are hard wired by the age of 7

Mentoring makes others grow and in that process you too grow

MANOHAR REDDY

It took me time to realize that the problem that seems to be with others is actually with me. I have not changed much so how can I change others?

Western schools believe a lot on objective behavior. But just because you know does not mean you will behave. Because you may not have internalized.

Unless you can train the heart and the gut, mere training of the brain is useless.

TECHNIQUES

Cognitive learning
Rehearsing
Sharing experience
Hand holding
Preparing agenda and action plan
Implementing
Doing an assignment

If management is practice and is a social activity, it is clear that immersion is necessary.

Life is a teacher but it is not only harsh (first you pay dearly and then you learn) but it will teach you when it happens and not when you need it. That is why schooling is needed.

Teachers, instead of covering many things in the class, try and uncover a few.

We are all "swimologists" but dont know how to swim.

Conceptualization based on observations maintained in a diary 

Imparting leadership skills (knowing) is comparatively easy, creating leader's perspective (doing) is difficult, creating a leader's disposition (being) is almost impossible. 

Institutes teach. Institutions serve communities.

Leader is the one who brings in a change.

Should a school become great by choosing great people or should a school take ordinary people and make them great?

Too social on social media - too vulnerable !

Whether you are blabbering to press or a TV camera or typing into Facebook,  it can land you in trouble. Some examples...

HP publicly announced its intent to sell off its $ 41 Billion PC business! What for? The hundreds of salespersons trying to sell HP PCs will find themselves swimming against the current due to that one twitter message. Did HP really want this? 
 
When the CEOs and VPs tweet, they are bound to let something slip no matter how careful they are. If something happens they will lose their jobs and board seats. They have nothing to gain and everything to lose.

 
It was a sight watching Goldman Sachs executives defend themselves in front of a Senate subcommittee over Goldman’s hedge against the coming mortgage collapse. The biggest problem was the way their own emails documented how they bet against their own customers.


Employment checks now include social media activity. So don’t say you’re looking for a job on LinkedIn when you’re already employed!

On Job Fitness

Recruits at the elite New York Police Academy are put through a vigorous six-month training and are required to demonstrate mastery of the curriculum by achieving a minimum passing score of 75%. Each recruit is also evaluated in 12 individual scenarios as well as numerous role-play exercises and workshops before he finally graduates.

In India, the training schedules for fresh recruits ensure that they are put through a gruelling routine, which makes them fit physically and mentally. At the Police Training School in Meerut, Sunday Times saw a batch of newly inducted women constables going through a long training process, incorporating four-five hours of physical training, drills and games every day. “When constables leave us after the training, they are supremely fit,” says an instructor. “The problem comes after a few years in service, when they tend to become physically inactive.”

Though experts agree that policemen should be fit, many consider the use of physically demanding tests for promotion as unfair. Arvind Verma, a former IPS officer who now teaches criminal justice at Indiana University, feels the tests should also take into account whether physical fitness is necessary in the candidate’s functions. “A number of US court judgments have questioned this matter,” he says. “In Tooner vs Brown County, the courts ruled that wearing glasses cannot be considered a liability. In Thomas vs City of Evanston, the courts ruled that physical agility cannot be similarly considered a necessity and that it will discriminate against women. These judgments have established that any kind of physical and mental fitness test must meet three conditions — proper job analysis, content of the job and discernment of who can do it and who cannot. Not every policeman is out there on the field battling mobs and chasing offenders. Indeed, most are physically unfit and yet continue to do a good job.”

Human society development is linked to how they capture energy and food

Populations increase till the limit of what their energy-capturing technology and food-growing technologies allow. 

1. Initially our ancestors lived only on what they could hunt or gather. 
2. Then they spread out geographically in search of easy prey.
3. Then they harnessing fire and it enabled them warmth to venture into colder climates. 
4. Next step was taming wild animals for work and raising them for food.
5. Next step was planting wild seeds. Gave more food and energy.

The real  boom came in 19th century when we bgean using up the earth's stored-up energy in coal and then in oil. This permitted the making of steel, ships and factories and it also permitted agriculture to grow on an industrial scale. European countries and their colonies used were first and they spurted ahead of their competitors in Asia and over 19th and 20th centuries they came to dominate the world. 

Perhaps the energy revolution is petering out. Trains, autos, planes, electricity .. all were invented decades ago. Atomic power was pioneered a half century ago and the improvements have been incremental since then.

The digital revolution made several people millionaires but did not become a "game changer" because it did not contribute to the wealth of nations. A teenager now spends half his waking hours on the net or some electronic device. Does it make him smart or rich? 

Not every technological advance increases wealth. Take Twitter. Or nuclear weapons. Or  even a simple TV - a great entertainment device - a commercial success too - but has it  boosted the GDP or improved living standards?

PGPM (M) Strategic Marketing Class Today - Self Notes - EFL Case - Growing Water Purification Business

The Learning Objective was to teach how can a CEO contribute to the marketing performance of the company.

The content as well as tone of the class presentations was off the mark (this was expected) (sometimes one learns better by knowing what one should not do). The content of a CEO's important speech should not be marketing (it should be corporate) and it should not be inconclusively analytical (it should be decisive and action oriented) and it should not address a functional problem (it should be a cross functional and corporate level issue. 

Halfway through the sessions I introduced four frameworks

1. 7S
2. Corporate value depends on the extent of tangible and intangible resources
3. Intangible resources are relational, human and structural
4. strategy is fundamentally as a process of allocating resources to opportunities

I asked the class to formulate what the CEO should say such that it meets all of the 3 following criteria

• decisively influence staff, structure, structure, systems, values and style
• In doing so he should not overstep on the decision making of the functional or divisional heads
• he must address the areas which really matter to the company