A program on Strategy and execution in India


Posted by Administrator | Posted in Uncategorized | Posted on 30-06-2010

Knowledge Capital hosted Verne Harnish – A leading strategy guru in India last week . Program garnered some rave reviews. Following is a summary of Key insights from Verne. This is a day-long program and I can hardly do justice to the 2 pages of notes and ideas.

1) Critical Number– What’s your daily question? What is the question you need to ask yourself/organization everyday for the next 90 days.  “We have the answers, all the answers; it’s the question we do not know!”  Don’t get trapped answering the wrong question.  When you get the question right, the answers appear.

2) Meeting Rhythm - start the daily huddle with your executive team as it was demonstrated and practiced in the workshop.  Use it to reinforce the daily question and improve communications.

3) No one has ever achieved peak performance without a coach — the battle of the coaches — Butch Harmon is Tiger’s early coach that helps propel him to #1. Tiger then fires his coach and goes it alone, resulting in his first loss of the money title in 2004 and two years without a single major’s win. Tiger then hires Hank Haney as his coach, gets back the money titles in 2005 and 2006, and wins nine of his last fourteen PGA tournaments. And he sits atop the FedEx Cup Challenge. Verne’s viewpoint — no one has ever achieved PEAK performance without a coach – so get one.

4) The three most important pages ever written for business leaders are pages 114 — 116 in Jim Collins’ landmark book Good to Great. It’s a bold statement, but Verne has seen the transformational impact on leaders and their growth companies when the concept on these pages is implemented. Unlike the standard executive or management team meeting that’s a weekly staple of most companies, this additional meeting is aimed solely at giving council to the CEO. It’s not about consensus building; it’s about generating “talk time” in an era when executives have been driven to silence by technology and left to solve problems via email. It’s about generating conversations around what’s vital to the success of the business and helping the executive team discover and face “the brutal facts” as Jim Collins so aptly describes in Good to Great. It was key to putting $160 million in Richard Kay’s (OTG Software CEO) pocket.

5) Cash flow: Gather your key executive team together for 30 – 60 minutes and brainstorm five ways you can immediately reduce your cash cycle and double your operating cash position within the next 12 months. Growth consumes cash – the first law of entrepreneurial gravity. Reduce your cash cycle days – PPR Travel changed the color of their invoice to blue and reduced their cash cycle days by 15.  Get customers to help fund your growth – Wild Birds Unlimited accomplished this through an innovative Free Birdseed Storage program.

6) The #1 capability of the brain? The answer is: Pattern Recognition. Our brains are uniquely wired to do this one thing brilliantly. Therefore, the key to mastering anything (and making great decisions fast) relies on you feeding your brain appropriate data and then letting it do its thing — find the patterns within the chaos!  At the heart of Dell’s and Walmart’s success is this fanatical focus on gathering customer feedback and acting on it WEEKLY.  Starting with the slips of paper Michael Dell had his employees use to log every problem, complaint, concern, issue, idea, or suggestion and then turn into him on Thursday’s so he could “read the tea leaves” each Thursday evening, Michael held a meeting every Friday morning to make Dell “1% better each week.” What are you doing to listen to your customers, listen to your market, gather intelligence weekly.   Daily meetings, daily metrics, and daily input from customers and employees — it’s all about feeding the brain more frequent data points so it can do its job brilliantly — recognize patterns before the competition, driving better decisions, and ultimately helping you win!

7) Review the Rockefeller Habits Checklist — like pilots pre-flighting their plane, We request you to take fifteen minutes with your team every quarter and see how many of the habits you now have in place from the list of 10 Rockefeller Habits — do this at your next weekly, monthly, or quarterly meeting. The key is just picking one or two to focus on in the next 90 days.

Insights from the Pricing & Strategy Summit


Posted by Administrator | Posted in Uncategorized | Posted on 25-05-2010

We have hosted Hermann Simon last week in India . Following is a summary of Key insights from the Hermann’s Hidden champion presentation.

Very Deep vs. Broad – This is a key strategy and one highlighted by Hermann Simon last week presentation in India is case study of Hidden Champions is Winterhalter. Originally a manufacturer of commercial dishwashers, they decided to abandon dishwashers for hospitals, schools, companies, and organizations and JUST FOCUS on dishwashers for hotels and restaurants. And they’ve gone deeper within this niche by providing water conditioners, detergents, and other services focused around cleaning dishes in hotels and restaurants. As Hermann says “only focus and concentration lead to world class.”

A Narrow Niche Pursued Around the Globe – Secondly Hidden Champions” are Closer to the Customer and Command Higher Prices. It seems that of the Hidden Champions have this characteristic in common: Five times as many employees (25-50%) have regular customer contact. This is compared to larger companies who typically have only 5-10% of their employees who have regular customer contact. So what is the value of customer closeness? According to Simon, by staying close to your most demanding customers, these companies drive performance and innovation. Their strategies become value driven, not price driven, so they can charge 10-15% more for their product or services.

China is Coming with Quality — He brought news that Chinese firms are focused on building competing quality products that will challenge even Germany’s lead in many export areas — and that they are building factories in Germany and the U.S. and other parts of the world.! With over $2 trillion in surplus cash (vs. the U.S. $9 trillion deficit), they have the financial muscle to do it.

To your success
Knowledge Capital

Don’t just listen to the Voice of your customers, listen to the Voice of your products/services


Posted by Administrator | Posted in Uncategorized | Posted on 13-05-2010

Do this simple experiment: Try coming up with an exciting innovation .Give yourself a minute and write your idea down. Now, pick a small object from your desk and imagine splitting it into two parts and now think of the new benefits that new form can offer you, write your idea down. Chances are that you’re likely to come up with more exciting results the second time around. That’s because people tend to be paralyzed when facing a blank state but generate better ideas when given a framework to be creative.

This is the premise of the famous article written by Jacob Goldenberg, Roni Horowit, Amnon Levav and David Maursky in HBR on Innovation. They argue that most ideas for new products are either uninspired or impractical. A systematic process (based on five innovation patterns) generates ideas (novel ideas) that are both ingenious and viable.

Many companies have been successful using this method called systematic inventive thinking. It replaces the traditional creative free for all with a highly disciplined “inside the box” approach to creative thinking and new idea generation. Here contrary to VOC (voice of customer) it starts with the existing product or services and its characteristics rather than the unmet needs of the customers. The process begins with enlisting the essential elements of the product, both its physical components and its attributes and its immediate environment, following one or more of the innovation patterns and then manipulating these patterns to come up with something new. Their research shows that most successful product Innovations fit into at least one of these five patterns.

The five patterns of Innovation are:

Subtraction: In applying patterns of  subtraction , instead of trying to improve a product by adding components  or attributes , we remove them, particularly those that seem desirable or indispensible-( lead in gasonline,sugar form Cola).Having removed an element of the product, we often see an opportunity to replace with something better. To avoid drifting too far it is better to look for the replacement within its immediate environment. Dell computers for example, removed the distribution channel (which was an essential component of the industry) from the computer industry and created the highly profitable and revolutionary delivery model. Apple successfully uses it by subtracting the number of buttons on its products (you only have two options for its ringer; on or off etc)

Multiplication: This pattern is somewhat different from the first approach. Here we make many copies of the existing product and then alter these copies in some different way. However, this way should be something that achieves more than a quantitative change. Gillette’s double bladed razor is a perfect example: by adding one more blade, they were multiplying however by adding an extra blade that raises whiskers so that the other blade can cleanly cut them is a qualitative change that made a huge impact. The key word here is qualitative change: change that adds increases the utility function of the product dramatically.

Division: Function follows the form here, by dividing an existing product or service into its components, we can suddenly see something that in a totally different light. This change in perspective leads us to configure these parts in unanticipated ways or sometimes just keeping the parts separate can lead to unforeseen benefits. Division can take many forms: it could be physical (product is cut into its components) functional division (product components with different functions are separated) or preserving division (a product is divided in such a way that each part preserves the characteristics of the whole)

Of these functional divisions is the main source of product innovations: The old Wi-Fi with speaker and turntable in one cabinet, has now given ways to tuners, specialty speakers, CD and tape players.

Task Unification: Often task unification can lead to significant   innovation. Significant innovation can happen when we are able to assign a new task to an existing element of the product or its environment, thereby unifying two tasks in a single component. The fundamental point is to look for bundling of tasks: if something exists in the closed world of the product and its environment anyways, why not just see whether it can be made to do double duty? One of the simple examples is that of suitcase with wheels, which eliminates one of the most callow products of all time: the bungee strap-equipped foldable luggage cart. Another example is the use of same cable by cable companies to provide communications and entertainment service.

Attribute dependency Change: This pattern involves analyzing the dependent relationships that exist between attributes of a product and the attributes of its immediate environment. For example, some product characteristics such as color have a strong dependent relationship with the character of the environment (the user’s gender/age etc.0

By trying to create new dependencies where they don’t ordinarily exist one can come up with innovative ideas for the product. For example, men and women used the same type of razor for decades before marketers came up with the razor designed especially for women. If only product developers looked for relationships between users and its environment they would have come up with this idea years earlier.

These patterns are often used in conjunction with one another. Most developers apply only two patterns to each product. However, research shows that nearly half the useful ideas emerge from an existing product by applying just one of the patterns. These patterns of innovation upset developers’ assumptions about the fixedness of the product. This process also works well as human mind tends to work best within the confines of defined problem rather than the brainstorming session where you let the imagination loose. Listening to the “Voice of the product” takes a lot of practice, as now one has to look at it from a totally new perspective.  This is a lot of hard work and it takes a while for one to get comfortable with the process, but if the process was easy, it wouldn’t be this successful.

To your success

Knowledge Capital

Change Management


Posted by Administrator | Posted in Uncategorized | Posted on 19-04-2010

In their recent book Switch, Dan and Chip Heath give a series of compelling insights that make this book a  must read for any leader/manager or person responsible for managing or introducing change .Throughout the book they work with two metaphors:  Rider -the rational side f the brain and the Elephant -the emotional side of the brain. They believe that most of us fail because we always try to appeal to the Rider and not to the elephant. The moment we are able to convince the elephant to change, change itself becomes easier. Thereafter it is more about giving clear directions to the elephant to follow or what they call shaping the path.

They studied people from all walks of life who have been successful in bringing about transformational changes in organizations such  as Institute of Healthcare  Improvement, Target, Environmentalists, students( fifth  graders), government agencies and all these studies pointed out to three key insights: To bring about change or to change someone’s behavior, you have to start acting differently. Next you have to appeal to both the Rider and the Elephant and third and perhaps the most important part is to pave the way. TO pave the way you have to give clear cut directions .They say mostly what wears people down is not exhaustion but the lack of clarity. If we are able to take these three steps we will be able to bring about the change that we desire: within ourselves, the organizations that we work in and the community that we belong to.
The book has many practical examples on how to make a switch (or change). They include:

Follow the Bright Spots – Investigate what’s working and clone it.

Script the Critical Moves – Don’t think big picture, think in terms of specific behaviors

Point to the Destination – Change is easier when you know where you’re going and why it’s worth it.

Motivate the Elephant

Find the Feeling – Knowing something isn’t enough to cause change. Make people feel something.

Shrink the Change – Break down the change, until it no longer spooks the Elephant.

Grow Your People – Cultivate a sense of identity and instill the growth mindset.
Shape the Path

Tweak the Environment – When the situation changes, the behavior changes. So change the situation.

Build Habits – When behavior is habitual, it’s “free” – it doesn’t tax the Rider. Look for ways to encourage habits.

Rally The Herd – Behavior is contagious. Help spread

To your success

Knowledge Capital

The Five habits of most Innovative entrepreneurs


Posted by Administrator | Posted in Uncategorized | Posted on 05-04-2010

We all know that the key to business success is” Innovation “and in our own ways we are looking for that breakthrough Innovation which will take our business to a totally different league. We are always intrigued by how do these innovative entrepreneurs like Apple’s Steve Jobs, Amazon’s Jeff Bezos and EBay’s Pierre Omidyar come up with such groundbreaking ideas? Are there any traits that are something common amongst these entrepreneurs? What is it that differentiates them from rest of us?

In recent HBR article by Jeffrey H Dyer, Hal B Gregersen and Clayton Christensen they discovered that these visionary entrepreneurs indeed had “Five Discovery Skills” that separated them from the rest of us. Together these skills make up for what the author’s called Innovators DNA. These five skills are

Discovery Skill 1: Associating

Associating or ability to connect seemingly unrelated questions, problems, or ideas from different fields is central to an Innovators DNA. Our brain doesn’t store information like a dictionary where we can find the word Rose under the letter R. Instead our brain associates the word Rose with number of experiences from our lives. The more diverse our experience and knowledge, the trigger new associations; for some these lead to novel ideas. As Steve Jobs says “Creativity is connecting things”.

By capitalizing on divergent associations of their founders, executives, employees and customers most innovative companies prosper. The skill of associating is like a mental muscle that can grow stronger by using the other discovery skills. As innovators engage in those behaviors, they build their ability to generate ideas that can be recombined in new ways. The more frequently people attempt to understand, categorize and store new knowledge, the more easily their brains  naturally and consistently make, store and recombine associations.

Discovery Skill 2: Questioning

Questioning is the most critical skill of Innovators. Most of the entrepreneurs that were interviewed by these authors remembered the specific questions they were asking at the time they had the inspiration fo the new venture. Michael Dell, for instance came up with the idea for his business model when  he was questioning  “why did the computer cost five times  as much as the sum of its parts?”

Ask Why and Why not and what if? Most of us focus on understanding how to make the current systems work- work a little better- look for marginal improvement. Most innovators question the status Quo-Marc Beinof of Sales force came up with the idea when he started questioning why we were still loading/upgrading the software manually when we could do it all over the internet.

Imagine Opposites

Innovative entrepreneurs like to play devils advocate. Asking oneself or others to imagine a totally different alternative. Pierre Omidyar of EBay would always disagree with what was being told and take the opposite stand, making others really justify themselves thereby looking deeper for an alternative.

Embrace Constraints:

This one skill is mostly used by most of the innovative companies worldwide. Google’s ninth innovations principle is “Creativity loves constraints”. Most of us impose constraints on our thinking only when we are forced to deal with real world limitations such as resource allocation or technology restrictions. Companies like 3M constantly ask questions like “what if our current customers stopped buying from us or we were prohibited from selling to our customers?”  Questions like these actively impose constraints on our thinking and serve as a catalyst for out-of- Box insights.

Discovery Skill 3 : Observing

Uncommon business ideas come up when we observe a common phenomenon, particularly the behavior of our customers in their natural environment. Intuit founder Scott Cook hit on the idea for Quicken Financial software when he watched his wife’s frustration as she struggled to keep track of their finances. Thereafter he was led by his friend to see new Apple Lisa. Combining the two, he came up with the idea for Intuit’s software and gained over 50% of the market share the first year. Toyota practiced this for the launch of Lexus SUV and gained significant market share.Ratan Tata came up with the idea for Tata Nano when he saw the plight of a family of four travelling in a scooter on a rainy day.

Innovators carefully and consistently look for small behavioral details- to uncover the unmet needs of its potential customers and gain insights about new ways of doing things.

Discovery Skill 4: Experimenting

Most of these innovators make experimentation central to everything they do. Amazon didn’t stop at being the lead online bookstore, it morphed into online discount retailer and more recently, with the introduction of Kindle as the online manufacturer of electronics.

For innovators, the world is their lab and unlike observers, they intensely watch the world, experiment interactive experiences and provoke unorthodox responses. Living and working oversees is one of the most powerful experiments innovators can engage in.

Discovery Skill 5: Networking

Unlike most executives who network  to access resources, to sell themselves or their companies or to boost their careers, innovative entrepreneurs go out of their way to meet with people with different kinds of ideas and perspectives to extend their own knowledge  domains.

They attend conferences like TED, Davos,  Aspen Ideas, Management seminars etc.  These conferences draw people from all walks of life: Business, artists, NGO’s, academics and thinkers form all over the world. David Neelman came up with the key ides for Jet Blue – such as satellite TV at every seat and at home reservations – through networking at conferences and elsewhere. Micheal Laaridis came up with idea for Balckberry when he heard one of the speakers in the conference comment about a wireless data system designed for Coke: it allowed vending machines to send a signal when they needed refilling.

Many of these innovators admit that the insights required to solve many of the most challenging problems come from outside their industries and scientific fields.

Practice Practice and Practice;

Though innovative thinking may not come easily to all of us, the good news is that these skills can be cultivated. They can be developed and strengthened through practice. Practicing these skills over and over again will make them automatic. The most important skill to practice is “Questioning”. Asking “Why and why not” help charge the other discovery skills.

Things to do:

Try spending 10-15 minutes each day writing down 10 new questions that challenge the status quo in your industry.

Sharpen your observational skills by watching your customers do their day to day chores in their natural environment.

Keep a notebook handy: take notes whenever you go. Even  Sir Richard Branson does that .

Attend Seminars and conferences or executive education seminars on areas outside your expertise.

Hold diverse lunches one a month where you meet people who are from diverse functions, companies, industries or countries. Get them to tell you about their innovative ideas  and get feedback on yours.

To your success

Knowledge Capital