* How to identify where the low hanging fruit are so that cash for expansion can be generated from operations.
* How to grow the overall market as opposed to just taking market share away from others with entrenched relationships.
* How to improve the way we measure productivity so we can monitor and improve it.
* How to bring in a certain 'organizational rhythm' so that everyone wakes up every morning fairly in control of his life and knowing what he is expected to do.
* What areas to prioritize and how to be nice when postponing certain opportunities.
* How to ensure that all staff members see the big picture and don't feel the daily revenue pain that I definitely feel. I feel they can focus more on their job with better results if they do this.
* How to pick the few things that are really urgent and to put everything else on the back burner so that they can be fixed in serial order.
* How to identify the people hiding under their tables and to let them know nicely that I am watching and don't consider it the right thing for leaders to do.
Tuesday, February 24, 2009
Monday, February 16, 2009
Another week goes by. . .
--originally wrote this post last saturday. Haven't had the time to finish it through the week. Just did so----
So it's the end of another long and stressful week and I've enjoyed my much needed Sunday break. I'm sitting here before I go to bed and wondering about a topic to blog about.
India's business press is filled with news about Subhiksha - one of the largest retail chains in India going through a severe liquidity crisis. I personally feel the chain is probably going to be shut down with the investors (ICICI Venture and Premji Invest) being forced to learn the hard lesson that equity values can be negative.
I'll try and summarize what went wrong:- Subhiksha was trying to become the largest retailer in India. It felt that the best way to do so was to open up 1000+ stores on a national basis, purchase in bulk from suppliers and sell at a discount to the end customer making money on the volume. Unfortunately for Subhiksha and their shareholders, it seems like the management team miscalculated a few things:-
* The time it would take each store to break even and hence the budget they needed to set aside to fund operating expenses till that time.
* The complexity of managing product availability and quality at their stores given the diverse purchasing habits and needs of the different parts of India.
* The change in the fund raising environment making it very difficult to continue to sustain even the minimum cost structure given that most of the company's equity had already been used up in capex for setting up the new stores leaving no money to fund either operations (till break even) or the purchase cycle.
Sadly, while it is easy for a lot of us to stand by and criticize, fact of the matter is that these miscalculations are common to quite a few entrepreneurs. Subhiksha's story is a reminder to get back to the basics:-
1. What are the reasons outside of cost why people would want to patronize your business? Are you offering them convenience? products that are not available elsewhere? Quality?
2. How are you positively impacting all parties? Do they have a vested interest in seeing you succeed? In Subhiksha's case this really goes towards their relations with suppliers - Is it a case that dealing with Subhiksha was more efficient or hassle free for the FMCG companies or was it just the same as dealing with the local grocer but with order sizes larger and profit margins thinner?
3. Is the product the best there is? How are you measuring success? Was Subhiksha going head onVs. a Food Bazaar or a More / Spencers/ Hypercity? Was it measuring by talking to the Colgates and Cadbury's of the world if their stores in the same locality as the other stores were performing better in sales numbers? If no, then why? If you don't fix the product then effectively what you are doing is multiplying mistakes 1000 times when you start replicating the format elsewhere. Is it not better to perfect the format first before going national.
Sadly, these are common mistakes that all entrepreneurs are bound to make. I guess I should count myself as lucky to notice the failures of others and try and avoid making the same mistakes.
So it's the end of another long and stressful week and I've enjoyed my much needed Sunday break. I'm sitting here before I go to bed and wondering about a topic to blog about.
India's business press is filled with news about Subhiksha - one of the largest retail chains in India going through a severe liquidity crisis. I personally feel the chain is probably going to be shut down with the investors (ICICI Venture and Premji Invest) being forced to learn the hard lesson that equity values can be negative.
I'll try and summarize what went wrong:- Subhiksha was trying to become the largest retailer in India. It felt that the best way to do so was to open up 1000+ stores on a national basis, purchase in bulk from suppliers and sell at a discount to the end customer making money on the volume. Unfortunately for Subhiksha and their shareholders, it seems like the management team miscalculated a few things:-
* The time it would take each store to break even and hence the budget they needed to set aside to fund operating expenses till that time.
* The complexity of managing product availability and quality at their stores given the diverse purchasing habits and needs of the different parts of India.
* The change in the fund raising environment making it very difficult to continue to sustain even the minimum cost structure given that most of the company's equity had already been used up in capex for setting up the new stores leaving no money to fund either operations (till break even) or the purchase cycle.
Sadly, while it is easy for a lot of us to stand by and criticize, fact of the matter is that these miscalculations are common to quite a few entrepreneurs. Subhiksha's story is a reminder to get back to the basics:-
1. What are the reasons outside of cost why people would want to patronize your business? Are you offering them convenience? products that are not available elsewhere? Quality?
2. How are you positively impacting all parties? Do they have a vested interest in seeing you succeed? In Subhiksha's case this really goes towards their relations with suppliers - Is it a case that dealing with Subhiksha was more efficient or hassle free for the FMCG companies or was it just the same as dealing with the local grocer but with order sizes larger and profit margins thinner?
3. Is the product the best there is? How are you measuring success? Was Subhiksha going head onVs. a Food Bazaar or a More / Spencers/ Hypercity? Was it measuring by talking to the Colgates and Cadbury's of the world if their stores in the same locality as the other stores were performing better in sales numbers? If no, then why? If you don't fix the product then effectively what you are doing is multiplying mistakes 1000 times when you start replicating the format elsewhere. Is it not better to perfect the format first before going national.
Sadly, these are common mistakes that all entrepreneurs are bound to make. I guess I should count myself as lucky to notice the failures of others and try and avoid making the same mistakes.
Thursday, February 05, 2009
Coping with the recession
I was just going through my blog and looking at my last post on the recession. While I feel I did manage to say what I felt was gonna happen with the economy, I must admit I myself did not feel it would be as bad as I feel it will be now. I did not realize the number of people who had leveraged themselves on the way up and only now do I get some sense of the chaos as they de-leverage or re-leverage. Anyhow, thought I would write about how I am trying to get my companies to cope with the recession. I don't know if these are the right strategies or whether we need to do things a bit differently. If you have any suggestions, please let me know:-
1. We're trying to get everyone to focus on personal productivity. That means all people staying more focused on work, working smarter and using better IT tools and managing schedules and meetings more effectively.
2. Doing more with less. We're trying to of course cut flab wherever we can but more importantly redirect senior resources from slightly more futuristic projects to areas which are very critical and need the involvement of senior managers. So for instance, our Business Development team is aiding the sales team, the revenue team is working with the Back office and I'm personally doing business development and product management.
3. We're engaging more with our customers at a strategic level. The good thing about the recession is that most of our clients and partners seem to have some time to meet in a relaxed manner. I'm trying to meet as many of them as possible to understand what their top priorities are in these times and how we can look at modifying our offering (if required) to help them to meet their new 'recession time' goals.
4. We're pushing hard on new offerings while not growing the technology team. To a certain extent this is a dilemma. On one hand, we feel that no new competitors will come up and so we are not running against the clock and on the other hand, we want to launch quick and when there is not much noise around. Our technology team here has been really good. They're a bunch of good developers who are highly motivated and committed to the cause. We're lucky to have built such a team.
and lastly, though I wish we were doing more of this
5. We're trying to keep the team together and get them to celebrate the cheaper things in life. I want to do a lot more of this but I think we've made a beginning in a small way this month.
Do let me know if you have some more suggestions on how to cope. We're trying our best as this doesn't seem to be going away anytime soon.
1. We're trying to get everyone to focus on personal productivity. That means all people staying more focused on work, working smarter and using better IT tools and managing schedules and meetings more effectively.
2. Doing more with less. We're trying to of course cut flab wherever we can but more importantly redirect senior resources from slightly more futuristic projects to areas which are very critical and need the involvement of senior managers. So for instance, our Business Development team is aiding the sales team, the revenue team is working with the Back office and I'm personally doing business development and product management.
3. We're engaging more with our customers at a strategic level. The good thing about the recession is that most of our clients and partners seem to have some time to meet in a relaxed manner. I'm trying to meet as many of them as possible to understand what their top priorities are in these times and how we can look at modifying our offering (if required) to help them to meet their new 'recession time' goals.
4. We're pushing hard on new offerings while not growing the technology team. To a certain extent this is a dilemma. On one hand, we feel that no new competitors will come up and so we are not running against the clock and on the other hand, we want to launch quick and when there is not much noise around. Our technology team here has been really good. They're a bunch of good developers who are highly motivated and committed to the cause. We're lucky to have built such a team.
and lastly, though I wish we were doing more of this
5. We're trying to keep the team together and get them to celebrate the cheaper things in life. I want to do a lot more of this but I think we've made a beginning in a small way this month.
Do let me know if you have some more suggestions on how to cope. We're trying our best as this doesn't seem to be going away anytime soon.
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