Proactive Re-skilling

Today's ET contains a short interview with management guru Ram Charan. The gyaan he gave was more or less routine, but one paragraph that caught my eye was this one:

To be world class you need to focus on people. A leader's highest lever is people: people before strategy. People compete, businesses don't. Leaders create vision or embrace a vision, they align people emotionally, they lead other people to a certain direction, but they also have to develop people ahead of the business needs.

Let's take a closer look at the last bit: "leaders have to develop people ahead of the business needs". Companies will go through ups and downs but as a leader, you need to keep moving things forward, for which you may sometimes have to redeploy key people in new and unfamiliar roles. Such changes may especially be required in bad years like 2008 and 2013, when it would not be unusual to move someone from delivery to sales or from production to maintenance. But such a transformation cannot be achieved suddenly or in a "perform or perish" mode. As a leader, you need to anticipate the need for such role changes well in advance and start re-skilling the concerned employee. This is where constant engagement with the team becomes crucial. If you have regular meetings with your staff, even during "business as usual" times, you can identify candidates for re-skilling and get them started on the learning curve. This makes it easy for them to pick up the new skills at their own pace and more importantly, it becomes easy for you to re-deploy them at the right time.

Skills for Starting a Company

A young trekker friend recently asked me what are the key skills he would need for starting his own company, which is something he intends to do in the future. Since we were just chatting, I asked him for some time to put together my thoughts on this subject. Not that I'm an expert on the topic but I can surely speak from second-hand experience, having been part of many startups and small IT companies. Some of these have done reasonably well, others have done spectacularly badly and some have just maintained a status quo (which I personally believe is worse than a spectacular failure, but that's another blog post). So here are the 5 top skills that I believe my friend needs to develop before he starts his own company:

Communication

Any company needs to sell something - an idea, a product or a service - in order to succeed. So the very first skill you need is the ability to communicate your company's offerings. Of course, you can always employ a sales guy to handle the actual selling but as an entrepreneur, you need to be in the forefront of marketing your company and its products. Years before you actually start your firm, you need to start building a network of contacts. This network will eventually give you the leads that your sales team would exploit, to win business for your company. Once you get the deals, you need to keep communicating with your customers to ensure timely payments, to get contract renewals or new deals and to gather more leads.

Leadership

In most fields, you cannot be a one-man company. That may be how you start off but eventually you have to build and lead a team of specialists in various functions like sales, delivery, support, admin, etc. Leading is not just about coordinating - you have to define your company values, communicate those to the team, and lead by example. Communication plays a very key role in keeping your team engaged. Initially there may be hiccups and setbacks. But if you keep your team informed about the problems, they will support you through thick and thin. Even when the business is doing well, you cannot afford to neglect your communication duties as a leader. Many promising companies have floundered by losing the support of their core team.

Problem Solving

Many people wonder whether technical skills are necessary to start your own company. For example, do you need to be a baker to start a cake shop? Or do you need to be a web programmer to start a dot-com? The answer is clearly No. But at the same time, you cannot be totally unaware of the subject. Even if you have experts to do the dirty work, you still need to understand the problems your business is facing and you need the skills to solve those problems. Simply put, problem solving is the process of identifying, analyzing and solving problems. This is a skill that you pick up through work experience more than anything else. So I would advise my friend to work in the chosen field for 5-10 years before he starts his own company.

Empathy

Earlier, I talked about the importance of communicating with your team about your successes and failures. But mere communication is not enough, especially in tough times. Telling your employees about your problems will not automatically buy you their support. For example, if the company runs into losses in a recession year, you cannot just expect the team members to work for a fraction of their salary. You need to be able to put yourself in their shoes and understand their problems, especially financial ones. Then you need to provide solutions for those problems, even at the cost of your profit calculations. At the same time, you need to ensure that you are investing in the right people, those who would stick with you in the long run. 

Humility

In my view, it is easier to be a leader in a period of failure than in a period of success. The intoxicating sweetness of success has a tendency to go to your head, impairing your judgement and taking you to the edge of pitfalls. Maybe CXOs of large corporations can afford their eccentric ego trips and subsequent losses, but you cannot. Keep yourself humble at all times and resist the temptation to believe the larger than life image of your company that is created by your marketing team. Remember that the competition is always out there, waiting for you to make one false move. Stay focussed on your customers, stay in touch with your employees and stay rooted to your company's values and core competencies and your business plan. 

Small Retailers as a Market for Tech Startups

Last week, ET published an article on how small and medium retailers wanting to take their business online are turning to technology startups for help. These typically charge Rs 1,000 to Rs 4,000 a month for technology services ranging from building websites to linking them with payment gateways and logistics providers. When compared to the potential earnings from doing big projects for large customers, these amounts are negligible. Still some of these companies are confident of being profitable soon. This got me thinking on how it makes business sense for these startups to target retailers as a market for cloud-based services. To be profitable with this model they would need huge volumes, meaning a large number of retailers. But are Indian retailers ready to take the Web plunge?

Let's look at it from a retailer's point of view. Here shall assume that the retailer in question is not just a grocer or a hardware store owner. He/she has one or more specialized products or services and seeks to target a particular segment of customers. Consider an exercise equipment shop, for example. For such an entrepreneur, normal Above The Line advertising alone will not bring in customers. Nor will word of mouth publicity get them the large number of leads they require, given their low conversion ratio of leads to sales. Since theirs is a lifestyle product, they would need to reach out to their target audience through micro level focused messaging. An online presence, including social media outreach, would be an essential part of their strategy. Here's where a tech startup can help.

Social media advertising and reviews on popular forums can attract the customer's attention to either the physical shop (where it is arguably easier to close a sale) or at least a website. If the website is designed and built well, and has payment gateway integration, it is possible to push the customer into buying the product online itself, while a tie-up with a logistics provider ensures that the product is delivered to the customer's house within an acceptable timeline. If the customer can be coaxed into writing a Web review of the product, that in turn would bring in more leads for the entrepreneur. On seeing that all these services are available for a moderate monthly payment, other retailers would jump on the bandwagon. So it's a  win-win situation for the entrepreneurs as well as the tech startup.

Startups and Funding

The startup I have been assisting finds itself in a bit of a tight corner financially. On one hand, we don't have enough money to expand our team because we only have a few small projects in the pipeline. On the other hand, we can't get bigger projects till we expand our team, in terms of both headcount and skill sets. Despite all our efforts, we haven't been able to attract any VCs or angel investors. So I asked myself - what is it than an investor looks for in a startup?

First and foremost is a business plan. A good business plan shows your would-be investors the company's potential and convinces them to invest their hard-earned cash in a startup. It tells them what you would provide your target audience that is different from the offerings already in the market, attracting customers  towards your firm and growing its market share. After all, why would an investor put money into a company that doesn't promise good returns

Next comes a good core team. An entrepreneur (or set of partners) may have a great idea, which has the potential to be the next Facebook or Twitter. But do they have the right mix of skills to develop the idea and start earning money? If they have a good set of people to start off with, they may be able to gradually build a strong and successful organization around it. The core team should cover all aspects of the business, from technical work to management

Last but not the least, the entrepreneur must be clear about his goal and must remain focused on it. It is easy to get swayed by trends and deviate from your business plan. For instance, jumping on to a bandwagon like Android apps just because everyone else is doing it (just an example, no offence intended to Google). Angel investors especially would be very attentive to this aspect, since they generally remain invested for longer than Banks or VC firms

Today India has many firms that provide both capital and business advice to startups, especially those in the IT and telecom sectors. Any one with a business plan that leverages the power of the Internet, but in a way that is different from the competition, has a good shot at getting funds. The impact of the recession on this sector has been relatively mild. For a budding Indian entrepreneur who follows the above rules, this is as good a time as any to attract funding

Client-side Business Analysts

By definition, a Business Analyst is someone who analyzes the existing organization and design of systems (whether business processes or IT systems) and helps to define the improvements needed. In an IT project, the BA's role is to understand the high-level requirement statement(s) in the project charter, deep dive into the client's business processes and prepare the product scope and project scope. Generally this role is performed at the vendor's side, either by the Project Manager himself or by a specialist BA who has more likely than not worked his way up from a technical role

But sometimes, especially in international projects, one finds the Business Analyst role being played by someone at the client side. This may be an employee of the client organization, or a contractor appointed by the client management to speak to their employees and note down their detailed requirements. The intention is to save the additional time and effort of requirements gathering by the vendor, by giving them everything they need to know. But if you are the PM from the Vendor organization, this is not necessarily good for you. In fact, it can do more harm than good

Since the client's BA has already given you a detailed set of requirements, their management expects you to jump right into finalizing the scope (if not executing the project). This means you or your BA cannot try and find any crucial points that their BA may have missed. Hence you are more likely to face issues with scope approvals, or worse, with scope verification. Also you miss the chance to personally interact with the client employees and understand the power structures and political relationships within their organization, which would have helped you later in the project

Business and Networking

Earlier this week, I attended a BNI meeting for the first time. Their website describes BNI as "a business and professional referral organization that allows only ONE person from each profession to join a chapter. This is a unique platform that integrates face to face networking with an online social network spanning 45 countries and thousands of business people". Although I had heard about the benefits of networking to improve business results, this was the first time I actually saw it in action

The claim about having only ONE person from each profession is not exactly true because BNI India admits members whose cater to different niche markets within the same larger profession. For example, the chapter whose meeting I attended had 4 members from the software field - 1 web design company, 1 social media marketing consultancy, 1 e-business company and 1 company providing customized software solutions. Anyway, there's not much point in arguing over fine print, I guess

The typical meeting works like this - after a brief introduction of BNI, all members present (absence for 3 meetings invites suspension) give a 30 second talk about their own business. This may sound repetitive, yet it is done every week for the benefit of new members or visitors (each one invited by a member, with prior intimation, at a cost of Rs 500). At the end of the 30 second spiel, each member briefly mentions their recent successes and what kind of referrals they are looking for that week

Next, two selected members give a detailed 8 minute presentation on their business. Then all members hand over referrals to anyone else whom they can help, based on the requirements they had mentioned during the 30 second talk (as I understand, the business owner is supposed to talk to the prospective clients only after the referrer has given the latter a personal heads-up). They also pass thank you notes to those fellow members whose previous referrals helped them win new business

The meeting ends with a meal (breakfast in my case, since that chapter holds its meetings every Tuesday morning) where the members do some one-on-one networking and understand each other's referral requirements more clearly. Referrals can also happen offline and not necessarily during the meeting only. BNI also has a concept of power teams within each chapter. These bring together people from related businesses who can help each other with referrals, more than other members

BNI also offers trainings that help members develop key business skills like communication, presentation, management and leadership skills, to stay ahead of the competition. Training sessions also give members from different chapters an opportunity to meet and extend their network. All in all, BNI was an interesting concept and one that seems to work, since I heard some profitable referrals being quoted. If I had something more  tangible to "sell", I would surely have thought about signing up