MEETING & EXCEEDING EXPECTATIONS - CRITICAL COMPONENT OF EXPERIENCE.

Customer Expectation Management (CEM)  is the mantra of the 21st century to set, meet and exceed customer expectations. Customer Expectation Management links every part of the organizational strategy to adding value to the customer, setting customer expectation and exceeding the same. CEM encompasses all strategies that lead to reduction in costs, cutting down of expenses and investments that do not add value to the ultimate customer's satisfaction and increases allocation to any activity that disproportionately enhances customer experience. 21st Century's leading organizations like Google, Apple, Citibank, Bestbuy, FedEx, Virgin, BestBuy, Wal-Mart are the pioneers in using Customer Expectation Management as a Business Strategy in dramatically improving their standing in the market place and getting stronger every day.

Business is all about making commitments and delivering on the same in return for a consideration.
In any transaction that includes a delivery of a promise and a payment for the same in cash, kind or a returning action,  a win-win approach will make the partners want to continue their dealings and value exchanges for ever.
Most important transactions for any business are:
A) Commitment of return on investment by the business to its shareholders,
B) Commitment of brand/ product or service proposition by the business to its customers & consumers from the quality of the product to redressal of their complaints if any,
C) Commitment of working environment, salaries, incentives and rewards to the employees and associates,
D) Commitment of profitable association to the trade partners promoting the products, services and the plans  of the business to consumers and users,
E) Commitment of the business to Government, Society and the environment. &
F) Commitment to the vendors of inputs, necessary services and support required by the company,  for healthy and prompt transactions including proper accounting practices and prompt payments..
In each of the above it is imperative for the organization to stick to its commitments as basic requirement, not only for survival, but also as an ethical and healthy practice.
Successful organizations make it a practice to strive for exceeding the expectations of their associates that results in the delight of their associates making them want not only to repeat the transaction again and again, but also to be an ambassador for the organization.
Exceeding the expectations thus becomes an important aspect of the customer experience that an organization should master.
How does an organization ensure that they consistently meet and exceed expectations of their partners, associates, stakeholders, employees etc..?
 Great organizations invariably, do the following:
i) Believe in offering honest, credible and deliverable commitments.
ii) Have a thorough understanding of the situation in which the commitments are given,
iii) Are always transparent with the associates and the transacting party about the issues, limitations and risk factors affecting the delivery of the commitments,
iv) Arrive at an agreement with the transacting party for a sign-off of the commitment,
v) Always ensure that the commitments are recorded in writing to ensure no ambiguity. Though, it a common practice to boast of being a person of words who never goes back on his/her word, successful organizations never encourage oral commitments ass this will lead to adhocism and heart burns at times.
vi) Possess and reflect courage to loose business than fall short on commitments .
vii) Have a long term approach in favour of a short term approach.
While short sightedness and short term approach are thoroughly reflected in an urge on the part of the organization to undertake a transaction somehow, the long term approach takes into account the need to be associated profitably for a long time and should never end up in loss of face for falling short on commitments.
viii) A bias for a win-in approach as against, winner takes all or I win- You loose approach.
and finally,
IX) Give whatever it takes to deliver on the commitments and give more value than promised even if has to entail sacrifices on the part of the organization for the same.
Successful Organizations who consistently exceed expectations, endear themselves to the investors and always get a high rating from them, making themselves financially more viable than their counterparts who lack on this vital aspect. This is indeed a value enhancer.
Managing Expectations is thus a vital strategy and Customer Expectation Management is the biggest weapon in the armour of the 21st century's successful organizations.

For any queries and inputs kindly write to me at ms@mastermentors.in and follow us at http://www.linkedin.com/company/master-mentors-advisory-pvt-ltd

CONTINGENCY PLAN- THAT ENSURES CONTINUED PROFITABILITY

 "Anything that can go wrong, will go wrong".  - Murphy's Law.
Nobody expected Titanic to sink which resulted in the ship carrying far fewer lifeboats than the number of persons  in the ship. Hence, when it actually sank, a lot of precious lives had to be lost due to the non availability of the life boats.
Imagine you are going on a long drive on your car without any trace of human being near by and your car's tyre punctures. You can replace the punctured tyre by the spare tyre attached to your car.

Imagine you are working on your computer on critical applications and the electricity switches off. The battery backup available with the computer or the ups connected to the computer will provide necessary backup to continue the work till the work is completed.

Imagine:
A plane is  flying in the air and the pilot develops a heart attack, then the second in command of the aircraft and the auto pilot provide a backup support to land the aircraft.

A game of cricket is on and one of the players is seriously injured. The 12th man in the team will replace the injured person.
A building housing all your computer and information system with all the data storage gets destroyed in an earthquake or a fire. A well executed disaster recovery plan helps the organization to retrieve the lost data and  information.

Similarly professional businesses understand the need of having a backup plan for every one of their plans to take care of any emergency requirements if the primary plan fails to perform or is aborted for any reason.

This backup planning or contingency planning, could be termed as the 'BUF' also known as the backup for failure plan.
The contingency planning consists of a set of instructions and action plans to be executed when the normal course of action fails. A good consistency plan takes into account the possible disruptions that could take place while executing the normal course of the main plan, persons responsible for executing the plan, actions to be undertaken by the persons in particular and the organization as a whole. This will help in a measured response to emergency situation and save lot of stress, time and money.
Contingency planning helps the organizations when there is a sudden loss of leadership, sudden loss of critical resources, sudden change in the market place or at a customer's end due to unforeseen circumstances, that could drastically impact the performance of the company.
While insurance for all critical assets could provide a backup for loss of such assets, backup plans provide  ongoing contingency measures to keep the projects and the organization moving forward without loss of time and profits.
While it is comforting to have a backup plan for every plan put in place, it is important to ensure that over slack is  minimised to reduce redundancies in the system that could increase idle time of under utilised resources and thus reduce return on over all investments.

SMART WORK & JOB-LIFE BALANCE

Working hard without working smart is working hardly. Promoting work-life balance of employees, promotes smart working.... Master Mentors

Successful companies recognise the rights of their employees to have a balance between the time spent at their work and the time they have to spend on other aspects of their life like family, hobbies, passions, recreation, religious pursuits, self care and a need for proper rest.
Leaders of great organizations like Infosys, Coco-cola have consistently been ambassadors of the employee's approach to achieving a work life balance.
In many family owned and not so professional companies, employees are judged by the number of hours an employee works as against his/her standard working hours. It is a taboo in a number of organizations to go home while the boss is still around in the office. This encourages a rat race among the employees to stay more hours than their colleagues to get better chance for increments and promotions.
Work expands so as to fill the time available for its completion -  Parkinson's law.
Great companies hold the employees responsible for their performance against goals as against the number of hours they work. While as a matter of discipline, employees are expected to stick to the work timings, standard number of hours at work etc., the performance of the employee in these hours spent on official work that counts. This encourages smart work and not just working hard. Quality and not Quantity is more important for success.
Some organizations frown at their employees when they are seen to be working over time and they treat this as a matter of inefficiency on the part of employees, rather than the urge on the part of the employee to contribute more.
Encouraging the employees to work within the boundaries of their work timings is a smart and successful habit by great organizations because:
i) Employees will stay focused on their job during their office hours leading to lesser distractions to others,
ii) Employees stay refreshed and energetic every day as too much of work may lead to burnouts and severe stress, having a bearing on the performance,
iii) Organization need not incur higher operating expenses to take care of electricity, food, maintenance expenses, safety while travelling by employees during late hours etc.
iv) Organizations can attract smart employees at competitive salaries if they are known to encourage employees to work smartly.
v) Avoid financial losses due to inefficiency creeping in because of stress at work.
vi) Employees get more support and encouragement from their families when they are taking care of their families and spending quality time with them. This will have a huge impact on their on the job productivity and job satisfaction.
Successful organizations take a number of steps to promote the work life balance of their employees:

a) Train their employees regularly to ensure efficiency at work that leads to higher productivity,
b) Encourage to go on family outings with their colleagues or on their own to stay refreshed,
c) Encourage employees to utilise their allocated leaves fully and discourage monetisation of the same,
d) Conduct periodic 'Work Environment Surveys' and link the performance of the managers to the results of the same by taking the scores arrived as an indicator of the hygiene in their respective departments,
e) Actively discourage taking their work home, unless the employee is expected to work from home
f) Have an active policy of compensating for extra work hours put in under emergency situations

In exceptional circumstances, organizations allow working beyond the the regular hours when it is must for the organizations to keep up with certain deadlines or commitments.For such bursts of excessive work, successful organizations have a special compensation policy in the form of compensatory off-hours and extra remuneration.
Successful Organizations that promote a hygienic work environment are respected by the community and the investors, earning them good will, as their employees become not only great ambassadors of their company, but also deliver consistently great performance.

ETHICS & ENDURABILITY

Ethics are  the most important pillars on which an enduring corporation stands.. Master Mentors

Ethics is that part of the behavior of a human being or an entity that enables the person or the persons within the organization collectively to choose between the right and wrong actions. Ethical behavior forms the backbone of successful and progressive business.

Good corporate Ethics involve transparency of operation, responsibility towards employees, stakeholders, environment, customer, government and the society and keeps their well being in mind for any decision or action. Ethical approach is reflected in the way an organizations chases its goals, makes credible and practical commitments & honours the same at any cost. Ethical approach follows sound practices with self monitoring mechanisms rather than a response to enforced supervision. Ethical behavior has to do with the long term approach of an organization which is not bothered just about short term profit maximization.

Ethical organizations meet the twin objectives of being on the right side of law and also work as per accepted principals of social justice. Ethics are moral values which guide the mangers in an organization to undertake transparent behavior that is consistent with the interests of the organization as well as the society without compromising the profit motive.
Companies throwing ethical behavior to winds have been known to have undertaken short cuts to success for profit maximisation like account fudging diverting money into the promoters' pockets and also  manipulating share prices to hoodwink investors.
Companies following ethics benefit in the long run as their transparency and socially responsible behavior earn them a lot of goodwill leading to a good response from the shareholders, investors and customers.
This will result in a higher business and also higher valuation in the stock markets increasing their financial power to raise resources when needed in an advantageous manner.
Companies following unethical behavior are always at risk of falling on the wrong side of law sometime or the other. History is replete with examples of such companies that have been mercilessly punished, leading to their bankruptcy or extinction. Enron and Satyam are some such companies which have borne the brunt of their unethical behaviour.
Organizations like Tata, Infosys and Wipro in India stand testimony to the fact that ethical behavior pays off in the long run and stands to be a key pillar of their endurance.
It is very important for organisations to realise that the ability to face the testing times during their growth period without succumbing to the temptations of achieving quick successes by following the shortcuts offered by the unnatural & unethical practices and approaches is one of the most important determinants of their long term viability of organisations, though it is easier said than done.

“You have to withstand pressure, if you can’t handle pressure you can’t be a great or successful entrepreneur” — Donald Trump.

The choice really is to live like a diamond that grows in value through the times or like an ephemeral cloud, whose life, no one knows, how long

UNDERSTANDING LIFECYCLE TO FINETUNE STRATEGY....

Every idea, every product or a service, every activity and every organization is subject to the phenomenon of lifecycle .. Master Mentors.

Understanding the lifecycle concept and applying the same to the day-to-day decision making process will lead us to take most appropriate decisions at any stage.Life cycle generally involves 4 stages namely, birth, growth, maturity and death, of varying time frames
The following are the examples of Lifecycle:
i) Idea:  Birth, buzz creation in a medium till critical strength in the form of the propagators, propagating rapidly and reaching a peak in interest levels and followers, decline in interest levels and finally disappearance.
ii) Activity: Initiation, Preparation, Implementation and closure
iii) Tree: Seed, sprout, sapling,  mature tree and snag.
iv) Animal:  Birth, growth, adolescence, maturity, middle-age, old age and death
v) Product: Introduction, growth, maturity and decline.
vi) Organization: Idea, formation, growth, maturity, decline and liquidation ( can be challenged).
Resource and support requirements, issues faced for survival and growth, output levels are different in different stages, in all the above cases and hence it is imperative to know this when handling any situation.
Organizations, being non living organisms, exhibit complex life-cycle patterns compared to living organism. Each of their stages can vary in duration unlike in living organisms, where it is more or less a constant, depending on the type of species.
While some organizations are quickly off the ground and grow large in no time, like Google, Facebook etc., 
some organizations like Citibank live for over 200 years and keep growing over time. Organizations like Apple computers passed through decline stage and came back with renewed vigour and accelerated growth, while organizations like Chrysler were acquired by rivals after a challenging period.


Unlike living organisms, organizations can be engineered and managed to survive
 eternally for generations through appropriate management and professional approach.
Life cycle of organizations that continuously reinvent themselves through innovation, adapting to the external environment and stay relevant to their target audience can look as shown here.
Organizations life cycle issues could be described as follows:

STAGE OF LIFE CYCLE	KEY ACTIVITIES	REMARKS
FORMATION	Create Business Plan, Fixed investments, Strategy, Fine-tuning & Finalising business proposition, Seed capital	Promoter focus is of paramount importance to get the idea off the ground and make the idea deliver as planned
GROWTH	Revenue growth, get people, processes and systems in place, Manage working capital, delivery to meet demand growth, innovative approaches to make most of limited apporaches	Most of the businesses fail here as their resources are unable to keep pace with the growing needs and also lack of systems will lead to a building being raised on poor foundations leading to the crash. Also competition from established players will be a grave threat.
MATURITY	Steady state operation, growth plateaus, competition intensifies, focus on delivering the brand’s promise consistently and ward off competition through trade promotion and brand investments. Aging manpower with growing salaries tend to get complacent,	This is a consolidation phase. Profits generated during this phase should partly be reinvested to generate new avenues of growth by launching new products, services, brand extensions etc to prolong the organization’s lifecycle. Organizational issues due to power struggle,  ego clashes, leadership issues start troubling the organization.
DECLINE	Decline in volumes, profitability due to multiplicity of factors like changing consumer preferences, environmental issues, intense competition, new innovations changing market dynamics, alternate products,  changing ownership or interest of owners, changing relationships with principals and business partners	Complacency and failure to adapt to the changing dynamics of the market will lead to the onset of the decline stage. Blame game de-motivates the staff. Re-orientation and training is a must in such a situation to survive decline. Organizations should reassess and act proactively to either reinvent their organizations or by undertaking mergers, acquisitions, sale or closure. Progressive organizations pave way to new generation products by cannibalising older versions.
NEW GROWTH PHASE OR DEATH	Some organizations survive the decline phase and emerge victorious in the market shake out, reinventing themselves. Emergence of new growth trajectories from new launches starting fresh lifecycle and rejuvenation	Companies that adapt themselves and manage to survive the shakeouts through proactive approach undertaken during the maturity phase emerge stronger and start a new growth path.

Understanding the life cycle concept allows the leaders in an organization to adopt appropriate strategy, leadership style, employee orientation and adapt the organization by confronting any issues that arise to threaten the existence of organization appropriately, thus ensuring long term survival.

CAPTURE VALUE & MONETISE INNOVATION

Creating Value but not capturing it is like investing in a river of water that flows into the sea- Master Mentors

One of the biggest challenges of the businesses and entrepreneurs today is, not only to create value from the investments they make, but also capture its value that can be monetised immediately or as a steady and growing stream of revenues.
When we invest in building a house and the house appreciates in value, a value is created that is captured in the form of the difference between the perceived value of the building and the investment done to create it.
However most of the businesses today are creating intangible value in the form of software applications, web portals, music, algorithms, business ideas etc. It is indeed a challenge for smaller organizations to convert this into monetizable value that can be defended in the market place against imitation and replication.

On a routine basis, the value created by the business for itself,  is reflected in the profits generated through the sale of its products and services, while the overall value generated is captured in the cumulative value to the suppliers, customers, users and the society in general.
Apart from the operational value, which will get added to the book value of the company, businesses create clusters of value that grow like a mountain, provided organizations are following right strategies. These could be termed as 'Valuemines' or 'Valuetraps' that trap the value created by the organizations.
The Valuemines created and added by the organization could be represented in the following ways:
i) Brand Value-  A Brand name that conjures a lot of positive impressions in the minds of a consumer and reflects a strong identity in the market place, helps a company to charge a premium on its products or services compared to smaller brands, me-too products and generic products available. Hence investments in creating strong brands supported by genuine product propositions adds lot of value to a company and is stored as an intangible in the equity created. Many times, brands have been sold for substantial values in the corporate history. Organizations like Interbrand conduct regular surveys to estimate and rank the global brands and note the appreciation or depreciation in the brand value in relation to other global brands.

ii) Intellectual Property ( IP) Rights :  Patents,Copyrights, Trademarks, Industrial design rights and Trade secret protection rights are some of the protection mechanisms available to innovators or those wanted to protect their uniqueness against duplication, copying, imitation that lead to value erosion.
It is important for the inventors of a product/process or any other unique system to protect their invention from getting copied by filing for Patents in relevant geographies. Similarly brands can protect their brand names from being misrepresented by others in the market place through Trademarks.

iii) Agreements with suppliers partners, clients and owners of complementary services:
Exclusive long term agreements that give access to delivery platforms, business creating brands franchise agreements, distribution agreements, contract manufacturing agreements, service agreements or any other monetize-able agreements capture lot of value for organizations. For example, HCL Infosystems generates over 2 Billion USD revenue consistently along with a sizeable profit for many years due its exclusive distribution arrangement for Nokia cell phones. Jubiliant Organsys generated a huge business and high market capitalzation from its agreement for exclusive franchising for India for Dominos Pizza.
Most of the times, these agreements are win-win for both sides as the companies leverage their core strengths in maximising the market opportunity thus generating business and profit for both the Principal and the Agent or the delivery partner.
Similarly, access to a scarce raw-material for a long term through an irrevocable agreement captures value for the organization as it is able to manufacture its products and services without interruption. For example, access to gas through a long term contract with a gas generating company by a gas based power plant or a fertiliser plant captures  value for the company.
iv) Investment in creation of own delivery networks, consumer facing infrastructure and client/user-base acquisition:
Organizations that own a large  franchise from users and customers, have immense power in the market place. Companies like Microsoft, Google for example are able to generate huge revenues by being able to launch new products and services and reach global audience instantly.
HCL infosystems, India, has been able to launch a number of brands through its sales organization that can reach to the corporates and dealer outlets across the country using its own infrastructure.
This will give these organizations, immense power in acquiring smaller companies with strong IPs and generate huge scale. Microsoft was able to take over Hotmail and Google was able to take over Doubleclick to create huge businesses from the IPs/businesses which would have otherwise struggled to grow.
A case in point is the power 'Luxottica Spa, Italy' wielded over the global optical markets when it acquired the global optical retail chains, 'Sunglass Hut' and 'Lenscrafters'. Having controlled over 25% of the sales of the global sunglasses brands like 'RayBan', Luxottica, used its retail muscle to squeeze the global brands and propagated its  own brands and products. Eventually, Bausch & Lomb Inc., the owner of RayBan had to sell out its family gold and its flagship brand to Luxottica, Italy for a meagre 650 million USD (much lower than its peak value) in 1999,  RayBan once again flourished under Luxottica to regain its global leadership position and became a highly successful and profitable brand in its portfolio.
v) Large scale Manufacturing/ Servicing infrastructure : Large plants and servicing infrastructure could potentially offer an opportunity to become low cost producers or providers of service of highest quality. This could lead to the organizations hitting sweet spots in volumes and profitability.


Innovations are one of the primary sources of value creators for an organization and create value in the long term. They need to be protected by organizations before they change the fortunes of their organizations.
The innovation has to be taken to the market through an appropriate 'Business Model' that will allow the value of the innovation to be unlocked.
 ' A Business model is a description of how your company intends to create value in the marketplace.  It includes that unique combination of products, services, image, and distribution that your company carries forward.  It also includes the underlying organization of people, and the operational infrastructure that they use to accomplish their work'- KM Lab.
A Business Model is required to capture the value of the innovation, identify the value proposition, and create an appropriate go to market strategy for unleashing the power of the same.
While generally the innovations are incremental in nature, breakthrough innovations occur rarely that change the dynamics of the industry they operate in.
Innovations could be:
A) An application like 'Instagram' or 'Angry Birds' that spread rapidly across the globe creating a huge base of users that are attractive to Social networks and Mobile Advertisers,
B) A product innovation like Apple iPhone that changed the way we perceive and use a phone by providing high level of positive experience, augmented by the availability of a number of applications, useful to the consumers,
C) A delivery model innovation like that of Dell Computer which changed the dynamics of the computer industry by offering direct delivery and also the power to configure their computers,
D) An incremental innovation like that of 'Intel' that continuously comes out with faster and faster chips,
E) An operating system innovation like Android that allowed a number of applications to be developed cheaply and ported onto the market place,
F) A price based innovation like ' Walmart', 'South West Airline', 'Deccan Air'.
G) A formula or a process based innovation like in Pharmaceuticals, that come out with new chemical compounds or alternate processes to manufacture off-patent products etc.
In all these cases it is important to consider the market power of the innovating organization that could allow it to monetize or become a victim of imitating competitors.

When captured in the form of intellectual property (IP) or as a Copyright, innovations have the capability to create a revenue generating assets that can also be sold to others for a substantial consideration.

In case the innovator is having an extremely unique and valuable intellectual property, but is a small organization, he needs to raise money from the funds or align with a larger partner who can do the necessary investments to unlock value and also maintain entry barrier.
For example, in pharma industry, the small companies who invent new formulae tend to align with large companies to access global markets, often on very respectable terms.
If the innovation is a weak one which is replicable, but the organization has the capability to invest in marketing and sales infrastructure, the company could quickly develop a complementary infrastructure that could help in scaling up the revenues and profits that could be used to ward off the competitors and discourage them from doing so.
A number of times, innovators welcome competition and work closely with the competition to evolve industry standards that will help the overall market for the product and the complementary products grow.
It is imperative for the innovator to protect the innovation through appropriate copy rights and patents that will deter the competition in duplicating the products and services.
Inability on the part of Xerox to patent its invention of the office computer, has helped companies like IBM, Apple come out with similar products that changed the computer hardware industry landscape and also oust XEROX  from the business.
Apple despite being a new entrant into the smart phone segment, came out with breakthrough strategies by enabling developers to create large number of applications that enhance the user experience and break the entry barrier created by existing players.
Android, a free operating system for mobile phone has been able to make rapid inroads with its proposition that was not only free, but could compete with Apple in the ability to support applications. This was subsequently taken over by 'Google'.
It is very important for the innovator to strive and understand the full power & commercial  potential of the innovation before putting in place appropriate business system to unlock the value. Then, an appropriate business model  has to be selected. Also, align with complementary players in unlocking the value at the same time creating & enhancing the entry barriers for the competition.

STRATEGIC APPROACH- GET CLOSER TO GOALS

WORKING WITHOUT A STRATEGY IN MIND IS LIKE TRYING TO CONSTRUCT A    BUILDING WITHOUT A BLUE PRINT...   MASTER MENTORS.

A strategy is defined as the road map chosen to achieve the end goals.

Successful Organizations ensure that every action of theirs is a part of a strategy or a tactic which is further a part of an overall grand plan to achieve their goals.
Lack of Strategic approach leads to shooting in the dark or straying from the path of right direction leading to wastage of resources, suboptimal utilization of resources and ultimate failure.
Strategic planning is applied to every element of functioning of successful organizations.

Strategic planning is an organization's process of defining its roadmap or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action. Generally, strategic planning deals with at least one of the three key questions:

1. "What do we do?"
2. "For whom do we do it?"
3. "How do we excel?"

In many organizations, this is viewed as a process for determining where an organization is going over the next year or—more typically—3 to 5 years (long term), although some extend their vision to 20 years. (Source- Wikipedia).

Strategy also guides the organization in deciding "What not to do?" as this may distract the organization from the right path and from going after the goal set.

The reason for failures at most organizations is the inability of the management or the persons responsible for achieving the goals, to choose the right strategy.

Strategic thinking can be similar to the approach, a chess player adopts to win a chess game.

In chess every move made by a player is aimed at improving from the present position to capture the competitor's king. The players undertake a number of tactical moves depending on the situation to overcome the opposition. The tactical moves should not only keep in mind the immediate situation and the position surrounding the pieces moved, but also the overall position of all the pieces in the game of both sides and the emerging situation. Further, the players have to think 4-5 steps in advance by analysing the likely responses of the competition to survive and stay ahead. Innovation, sacrificing short term gains for long term gains (gambits), choosing offensive or defensive strategies depending on the risk taking ability of the principals, trade off between own pieces versus competition depending on their importance are some more important features of chess that are relevant to strategic decision making. Further in Chess, all the resources need to act in tandem and the one who is able to harness their collective power to achieve the ultimate objective of capturing the competitor's king, wins the game.

Similarly in organization, it is imperative to focus the energies of all resources as per a set plan to achieve the ultimate goals.

A successful strategy should take into account:

i) Goal to be achieved, ii) Resources in hand, iii) Tactics to be adopted, iv) Coordinated approach, 

v) Likely response from the environment and other players in the system that may affect the execution and contingent response plan, vi) medium term, short term and long term nature of the goals and the corresponding time frames, vii) cultural aspects of the people involved and  viii) risk bearing ability of the principals creating the strategy.

Successful Organizations inculcate strategic thinking approach and a win-win approach to attain the objective of value creation, value capture, wealth maximization for their stakeholders, customers, vendors and the society, thus helping them to stay on track to attain their vision.

LESSONS FROM THE FAILURES THAT SHOOK THE WORLD..

                                         ..
Titanic, name and thing, will stand as a monument and warning to human presumption.The Bishop of Winchester, preaching in Southampton, 1912.                                 
..

TITANIC which was supposed to be an unsinkable ship, sank without a trace after hitting an iceberg in the early hours of April 15th, 1912 in the North Atlantic seas.


In the recent history, we have seen a number of large companies which were successful in their own way for a long time, suddenly loose way and disappear from the corporate landscape. While a number of factors have to fall in place together to create a successful organization, a few factors are sufficient to cause the companies to fail, just like how a few unplugged leaks caused by a rock hit could sink a huge ship if not plugged in time.


Let us review some recent corporate failures and the reasons that caused them.


Lehman Brothers:


Lehman Brothers was one of the biggest investment banks in the world, when it declared bankruptcy on 15th September 2008. A fall from a market capitalization of USD 60 Billion in February 2007 to almost zero in around 19 months, this is one of the most spectacular failures of a blue chip corporate with over 25000 employees.
Reckless exposure to low quality assets and unbridled aggression in acquiring subprime mortgage business after a rapid rise in prices led to its fall.  Holding over 639Billion USD of assets at notional value and over 620Billion USD of liabilities at the time of filing for bankruptcy, Lehman's fall was one of the biggest collapses of all time.
Lehman's high degree of leverage with debt over 30 times the shareholder's equity, and a rapidly falling value of its mortgage portfolio in a weak market, led to huge losses and inability to cope with the situation leading to its ultimate filing of bankruptcy. Lehman Brothers brushed many loopholes in its accounting practices under the carpet by regular window dressing of accounts and ignored many early warning signals.
Lack of fiscal discipline and ethical accounting practices led to this giant crash and vanish into oblivion.
This shows that, lack of transparency, undue aggression in the market place, lack of fiscal discipline can mean an end to any large organization and hence no one is infallible.


Enron:


 Rated, "America's Most Innovative Company" by Fortune for six consecutive years, from 1996 to 2001, listed on the Fortune's "100 Best Companies to Work for in America" in 2000, and having offices that were stunning in their opulence, Enron, once one of the largest American corporations with a market capitalization of over 70 Billion USD. When it filed for bankruptcy in December 2001,its supposed financial strength was managed through a set of fraudulent and innovative accounting practices termed later as "Enron scandal" and its claimed turnover of 101Billion USD was found to be mostly fudged and non-existent.  
The fraud committed by Enron led to the fall of a Global Accounting Consultancy firm, Arthur Anderson and also led to the creation of Sarbanes-Oxley act 2002 to guard against such fraudulent corporate accounting practices in the US.

This shows how greed, lack of ethics, manipulation of accounts and fraudulent managements can destroy the wealth of the society.

Swiss Air:

The formal National Airline of Switzerland, was once known as the 'Flying Bank' due its financial strength till it followed an aggressive loan backed acquisition strategy also known as the ' Hunter Strategy' in the late 1990s. The economic downturn that followed the September 2011 Attack on the World Trade Centre, led to a severe drop in its turnover and profits, making it difficult to pay back the loans it had taken leading to operations becoming unsustainable and subsequent closure of the airlines on 31st March 2002.

BPL Limited:

BPL Limited, the promoter of BPL TV was the most admired company and a leader in the consumer electronics space in India with a market capitalisation of over Rs 1300 crores. BPL had a rapidly growing portfolio of Consumer Electronics/ Appliances products till the group diversified into Telecom and Power Generation business in the mid 1990s.
Diversion of resources to other businesses from the core business and inability to feed its core businesses with requisite funds and also inability to raise funds due to stock market related issues, led to the downfall of BPL Limited. It not only lost market share rapidly, but also had to close down all its manufacturing facilities, sales & marketing operations and lost all its net worth.

Subhiksha:

Subhiksha was once the fastest growing retail chain in India with over 1600 retail outlets selling groceries, fruits & vegetables, medicines and mobile phones. Having grown rapidly in just 12 years of existence, Subhiksha had to shut its shop in 2009 owing to severe cash crunch stemming from financial mismanagement. Starting as a discount retailer and a price warrior, Subhiksha aimed to become a chain of Super Markets offering a shopping experience coupled with discount pricing to the consumers. This led to a dramatic increase in its working capital requirements as it rapidly expanded its outlet base across the country backing them with high decibel advertisement campaigns.

Frequently changing business models, too fast an expansion without the backing of sufficient funds, lack of appropriate systems to handle growth and poor supplier and principal relations led to the downfall of the retailer, once hailed as a star on the Indian organized retail landscape.

Global Trust Bank:

Run by the eminently successful Ramesh Gelli, known as the super banker who was behind the success of Vysya Bank, GTB was once the darling of investors and account holders. One of the earliest new generation Private Sector Banks in India, GTB expanded its operations and grew rapidly till the early 2000s. Its over exposure to risky assets against the prevalent norms, that crashed in value due to the economic downturn in early 2000s led to a rapid worsening of its financial health. It was forced to stop operations before being taken over by Oriental Bank of Commerce by the intervention of the RBI to protect the account holders. Its efforts to be taken over by Axis Bank failed when Axis Bank got a scent of the asset quality of GTB leaving it high and dry.

Chasing growth by throwing caution to winds, compromising on ethics and involving in malpractices, manipulation and dressing up of accounts, share price manipulation, excessive focus on providing return to promoters at the cost of depositors, minority shareholders and borrowers were considered to be the main contributors for the fall of the Global Trust Bank.

Satyam Computers Ltd:

Satyam Computer Services Ltd (Satyam) was once looked upon as the poster boy of Indian IT Outsourcing Industry and was ranked among the top 4 IT Companies of India. With more than one third of Fortune 500 companies as its clients, Satyam was one of the most admired companies from India.

A command and control style of functioning by the promoters who showcased a galaxy of eminent persons as board members and a globally admired auditor in Price Waterhouse, led to the external world being completely oblivious to the happenings in the organization.

Underneath an image of respectability the company undertook massive window dressing of accounts, inflating the accounts consistently over a number of years, showing much higher sales and profits than actual figures thus defrauding the shareholders, investors and the media by lying about its actual performance. When the problems and real issues were coming to light, the promoter of Satyam Mr Ramalinga Raju admittted to fudging the accounts for several years and also about overstating the cash balances of the company by thousands of crores that were supported internally by duplicate demand drafts.

The problems came to the surface when Satyam wanted to merge with the real estate and infrastructure companies owned by the sons of Mr Ramalinga Raju, Maytas Infrastructure and Maytas Properties, which led to suspicion & uproar in the investor fraternity and subsequent exposure of the fraud.

Excessive promoter greed, diversion of promoter's interests into other areas like infrastructure, falling short on integrity and ethical approach, lack of internal controls and poor corporate governance led to the fall from grace of an enterprise and destruction of the shareholder value.

While these are the companies that have failed their investors, employees and the society, there are many companies that have failed to read the signals from the market place and were swept aside by the changing dynamics. The rapid loss of market shares of brands like Nokia and Blackberry, the flight to oblivion of brands like Ambassador, LML, Lambretta on the Indian roads, the bankruptcy in 2005 of Polaroid, the makers of Polaroid camera are a few examples of the companies unable to take corrective action in the right time to reinvent themselves and keep up their growth and profitability.

Most often, organizational failures happen when the managements are unable to forecast the changing situations that affect the fortunes of the company and take appropriate actions when it is very much in their realms to do so.

Failures can be arrested if the organizations:

a) Stick to the core values and maintain their focus on adding value through their business,

b) Act on problems that may arise during the operations immediately with foresight,

c) Maintain ethical and transparent approach,

d) Be pro-active in guarding themselves against factors that destroy value like complacency and putting self-interests in front of their stakeholders and the society and

e) Adhere to the very principles that have led them to success in the first place. If not, they are either wanting to fail or preparing for their failure.

REWARD SYSTEMS THAT REINFORCES SUCCESS...

Rewards, not Punishment brings out the best from employees and motivates them to be achievers...


Organizations raise resources mainly from 3 different sources: Investors, Employees and Customers.
Employees contribute to their organizations by delivering much more value than what they are paid.
It is imperative for today's organizations to attract right talent at the right price, get the best out of the employees and retain them. Inability to retain good employees will result in not only a gap to be filled, thus losing time and productivity, but also at times result in plugging the positions again by paying much more to new employees. Apart from a negative impact on profitability, this also has an impact on the morale of the rest of the employees who end up feeling that they are being taken for granted and paid lower salaries for being loyal.


'Employees who receive bonuses for their efforts will work even harder, increasing productivity and potentially bolstering profits. But those subjected to penalties tend to distrust the supervisor and, because of that, work less hard' says, Karen Sedatole, associate professor of accounting in Michigan State University’s Broad College of Business who authored the study with Margaret Christ of the University of Georgia and Kristy Towry of Emory University.

Rewards for employees can be for  Individual or Team performance in the form of Financial or Psychological incentives. While the rewards could be offered in the form of an increment or a performance bonus (cash or equivalent), this takes into account, individual or teamwork approach encouraged by the company. 

While most of the companies make the practice of recognizing the employees' contribution program oriented and transactional by offering gifts, certificates and mementoes, exemplary companies encourage the employees through spontaneous programs and special mentions in public that build the self-esteem of the employees and inculcate a sense of feel good and motivation to achieve more, among the employees. Such programs increase the bond of the employees with the organization and encourage them to be ambassadors of the company.

Employees value the recognition given by the organizations in the form of awards, promotions, special mentions in public in addition to the certificates and mementoes that go with them.

Successful organizations use a right mix of transactional and relational recognition programs.

Transparency in reward and recognition is the most important aspect of the programs at companies known for being the best places to work at.

Companies like Citibank, Unilever, Procter and Gamble, Cisco Systems, IBM, Infosys Technologies, Wipro, Tatas, Bharti Airtel, Idea, Godrej etc. enjoy some of the lowest employee turnovers as they encourage, recognise and reward brilliance at work places and also keep the employees charged up consistently by giving them challenging roles that match their competencies. Training programs, employee competence programs and job rotation globally, make these companies great places to work for.

Transparent, fair and performance oriented reward systems that take into account both financial and psychological angles, in tune with the organizational culture and professional HR Practices are the hallmarks of Successful Organizations. This is what, that motivates the employees to stick to their organizations and give their best, consistently for life.

FLEXIBLE YET FIRM..ENABLING LONG TERM SURVIVAL.

But for the ability to sway, most of the trees in the world would have been broken..

Successful Organizations realise the importance of being flexible yet firmly rooted to their core values.
Ability to withstand extreme circumstances increases rapidly when you take steps necessary to adjust to the dynamic external environment without compromising on the principles you stand for. Flexibility allows the organizations to adapt themselves to the circumstances and stay relevant at all times. This is very much required by the organizations to survive.

"Be firm on principle but flexible on method." - Zig Ziglar

The case of  Tata-Singur project in West Bengal, India, highlights the outlook of great organizations to be flexible when required to diffuse complex situations and stop value depreciation  for the company and the society.

Tata Motors, one of the finest Indian companies set-up its factory in 2008 at Singur, to manufacture the path breaking US$ 2500 Nano cars. Despite incurring huge expenditure and having undertaken heavy investments, faced with a severe opposition from the ex-landowners and surrounding people led by politicians, Tata Motors decided to move out the factory from Singur to Gujarat in October 2008.

This has helped Tata Motos to not only avoid any more controversy, but also have a great new partner in the form of Gujarat Government and a far more favorable industrial climate that has let it expand the business rapidly.

The flexibility on the part of Tata Motors helped in salvaging the situation and weather the storm that was looking increasingly unmanageable.
Too much flexibility indicates spinelessness and lack of firm grounding in a set of core values that will guide the organization towards its vision at the same time earning respect from all the stakeholders and the society.
Flexibility also helps organizations not only weather the storm, but also adapt to the rapidly changing customer tastes and preferences and sometimes lead the way in the market place.
Lack of flexibility on the part of Nokia in moving towards the smartphone revolution as led to its loosing market share rapidly. Similarly, failure on the part of Research in Motion in understanding the changing trends of the market and adapting to the same with better products with more features have caused a massive loss to its position in the market.
The key is to very strict in adhering to the core guidelines like Vision, Mission and Values and Goals while being flexible in the methods being adopted to achieve the goals. Methods could be tailored to the changing circumstances, ensuring that the progress is made in the direction of goal achievement and long term value creation objectives are achieved.

DRIVEN TO GOALS THROUGH ENDURING VALUES..

"Being Brilliant but having no 'Integrity' is like a police person with pistol wanting to randomly kill instead of protecting citizens against the criminals.. " Master Mentors..
Organizational Values are the qualities that guide the people in an organization in their day-to-day behaviors while they executive the strategies to achieve the mission and the long term vision of the organization.
Values have an inextricable link to the organizational culture.
A value driven culture in which there is a strong alignment between the Organizational values and the Personal values of most of the employees is the key to the success of any Organization.
While every organization is value driven, the successful organizations consciously work on outlining and articulating the right values and align the organizations as per the same by ensuring the values are shared by all the employees and ingrained into their behavior. Most of the organizations drift along without a conscious effort, leading to sporadic success or failure or a mediocre performance that never stands out.


Some common examples of values are as follows:


accomplishment, accountability, accuracy, achievement, ambition, balance, challenge, collaboration, compassion, competency, courage, credibility, dedication, dependability, dignity, diligence, discipline, diversity,efficiency, empathy, empowerment, enjoyment, environment-friendly, equality, excellence, flexibility, friendliness, fun, generosity, honesty, impartiality, improvement,  independence, individuality, influence, innovativeness, integrity, learning, loyalty, optimism, persistence, professionalism, quality, questioning, responsibility, respect, security, service, sincerity, staff well-being, stewardship,  teamwork, etc.

While achievement, balance, diligence, empathy, honesty, impartiality,learning, professionalism are rated as the top personal values of a number of successful persons, accomplishment, dependability, empathy, excellence, honesty, impartiality, integrity, professionalism, respect, service and teamwork are highly rated by most of the successful organizations.

While personal values vary from person to person, Organisational values vary from entity to entity.
Normally organizations define values at the highest level and take a number of actions to percolate them across the organization. Selection of employees with matching values, demonstration of values at the top level, reinforcement and reiteration of the values at every level and at possible occasions, reward systems to encourage right values and deterrent actions like demotions, transfers, suspensions, decrements etc. when an individual demonstrates undesirable values are some of the steps taken by the organizations to achieve a value fit and alignment across the entities.


In successful organizations, there is a high degree of co-relation between desired, stated and exhibited values across the organizations unlike in mediocre organizations where, the values espoused are mostly on paper and never propagated, exhibited and internalised.


Alignment of values in organizations thus enables successful organizations  to achieve their vision through common norms of behavior across the organizations.