(Yingxue Zhao, Xiaoge Meng, Shouyang Wang, T. C. E

Strategy Marketing Analysis Resources Te c h n o l o g y
Gautam Hari Singhania

Chairman and Managing Director,
Raymond Group
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editorial
the right fit
et’s step briefly into the past.
L Most special occasions—a wedding, a promotion, going

abroad for higher education, a retirement party—involved
the purchase of a new Raymond suit. A visit to the local
showroom usually involved poring over bales of fabric, discussions
with the salesperson and family to identify the right shade, and then
taking it to the family tailor who would then measure and stitch a fine
poornima subramanian | senior editor suit for ‘the complete man.’
Cut to the present. A customer strolling into any of the brand’s
new-age stores can choose the right fabric/apparel through devices such
as the iPad. Understanding the need to offer a one-stop solution, the
brand now offers tailoring solutions too; one can even select the style of
cuffs and collars to stitch a custom-made shirt. Often, three generations
can be seen shopping for their wardrobe needs at the same store.
How has the brand managed to achieve this? Thought leadership, as
one of the articles in this issue explains, is the ability to spot previously
unseen or hidden relationships in complex situations. Brands today
are in an unenviable position. On the one hand, they have to maintain
their ethos to retain their existing customers, while on the other they
need to embrace newer realities to grow their market base. They need
to stay true to their principles— enduring ideas that provide clarity on
what the brand stands for, to both the company and its customers.
As you read through the cover story, you will see that Raymond’s
leadership position and success for the most part is because it did not
waver from its brand promise. A simple strategy but one which many
others failed to understand and implement.
What are your views? Do write in with your comments to
poornima@thesmartmanager.com.
Happy Reading! �
The Smart Manager May-Jun 2017 www.thesmartmanager.com 3

contents M a y - J u n 2 0 1 7
07 12 26 30 36 40
02 masthead 26 work-life
03 editorial gift of time
Lynda Gratton and Andrew Scott, London Business
82 reading room
School, discuss the implications of an extended
three-stage life.
30 interview
content, context, and conversations
07 first serve Why do some companies lead while others lag?
delivering delight Ken Rutsky, author of Launching to Leading, tells us how
Cutomers are our best ambassadors, says Albinder to break through and lead.
Dhindsa, Grofers.
36 social entrepreneurship
12 mythbuster the art of giving back
is your thinking flawed? Intention backed by competency is the most important
Why do many fail at strategy execution? Robin Speculand, ingredient of a successful venture, says Ajay Kavishwar,
author of Excellence in Execution, challenges your beliefs. The Akshaya Patra Foundation.
16 cover story:
suiting the world
Gautam Singhania, Chairman and Managing Director,
Raymond Group talks about the company’s legacy and
its future strategy.
Now you can stay connected with us even more easily. Simply scan the QR code on the cover by downloading any QR code reader app on your
smartphone, and join our Facebook community for regular updates, contests, offers and a lot more.

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contents M a y - J u n 2 0 1 7
46 50 54 60 64 72 76
40 leadership 60 strategy
thinking that matters change tracks
The ability to make connections others cannot The gravest error is business modeling, or the lack
see creates new worlds of possibility, observe of it, says Hardik Harsora, Effex Business Solutions.
Vip Vyas, Distinctive Performance and Stuart Doughty,
Executive Consultant. 64 innovation
innovation happens elsewhere: rethinking your
46 branding business to grow and compete
greed is good Howard H Yu, Knut Haanaes, and Jayanth Narayanan,
How can you nurture brand desire? Nicholas Ind, IMD, share their views on innovation and its
Oslo School of Management. indispensable role in the progress of companies.
50 technology 72 organizational health

the new normal listening in a different way
The old ways of running a company will not cut it Rahul Shah, DDI India, offers a few tips to
in a digital world, say Liri Andersson and transform from ‘mindfull’ to ‘mindful’.
Ludo Van der Heyden, INSEAD.
76 gurumantra
54 project management taking the big leap
leveraging diversity Morgen Witzel, Exeter Business School sheds
Companies should harness the potential of cross- light on the keys for companies to expand
cultural diversity, says Anees Haidary, Sasken. internationally.

delivering delight
firstD hserve
indsa
ALBINDER DHINDSA
IS CO-FOUNDER AND
CEO OF GROFERS.
illustration by darshan sompura
delivering delight
The online ‘grocery ordering’ business in India has not taken off like some others such as
apparel, electronics, etc. It is riddled with many challenges, some of them unique—the
need for cold storage—to maintain the quality of perishable products such as fish and
vegetables. However, things are now looking bright for this sector which is projected
to grow by around 38%.1 India was the fifth largest market in Asia Pacific for online
grocery retailing standing at $135mn in 2016.2 Many players are now operational in
this space and are working on different business models. Grofers, a mobile and web
application is setting the benchmark for service delivery and customer satisfaction.
We speak to Albinder Dhindsa, Co-founder and CEO, Grofers to know more about their
zest to make a mark in this category.
t Grofers, our prime focus has always of the present to minimize effects of any
A been on providing the best customer

experience at every touchpoint. Be it
procurement of products, technology
and innovation, training programs (for all teams
and not just delivery executives), or promotions,
unforeseen issues. This becomes the acid test
of our customer service. Our philosophy is
very clear and simple to comprehend:
‘understand, empathize, and act’.
everything has been aligned keeping in mind training employees

our customers. All teams place the customer at Our employees are our first customers. It
the center of their plans and devise solutions to becomes imperative for them to understand the
continuously improve on our service. Moreover, functioning of Grofers in and out. If you were
everyone is on their toes and trying to be ahead to join us, this is the first thing we would ask

delivering delight D h i n d s a
of you. The purpose of this activity is to let the about anything you want (literally anything) and
new employee understand us at every touchpoint. we would deliver it. Our mango campaign—free
We have a designated training team which mangoes with every order—last year was a huge
runs an employee through the whole process of success and attracted a lot of customers. This year
delighting the customer and handling complaints. we are giving experiences with every order for our
After the completion of classroom training, the Mother’s Day campaign. Placing our customers
employees undergo on-the-job training, during first helps us retain them. They in turn, help
which they have to implement all their learnings us attract more customers. When we get good
from the classroom sessions. The whole process margins from our partners, we pass them on to
requires a couple of weeks. The new joinees are our customers and offer pricing that is better than
then teamed up with existing employees on the the supermarkets. But more importantly, it is our
basis of their personality traits. This allows them customer service that drives retention for us.
to settle in and also gives the existing employees
a sense of responsibility. ‘Townhall’ is another the challenge of the ‘Indian customer’
activity which is conducted on a frequent basis. Our customer is a supermarket goer and not a
This is done to update everyone within the kirana shopper. If you visit a supermarket, you
company (across all offices) about the growth and will save on groceries but end up spending on fuel
A one-on-one
areas of improvement. and parking. Moreover, you spend extra hours
session with the
of your day and end up carrying heavy bags. The
employee gives
dealing with deviation from norms modern Indian consumer is starved for time. We
a manager an
Our training team conducts a weekly refresher aim to give them their existing benefits of offline
understanding
session with all the employees. The reasons grocery shopping with the added delight of a
for employees deviating from working norms
of the things little extra time for themselves. So, I would not
could be many. It could be both professional and affecting the call it a challenge. The challenge lies in how you
personal. Thus, it is important to understand employee’s communicate the voice of your brand.
their perspective. Post this refresher session, performance.
managers are updated about the issues prevailing bringing customers online
within their teams. A one-on-one session with the You will be surprised to know how many
employee gives a manager an understanding of homemakers browse and shop online. People now
the things affecting the employee’s performance. are keener than ever to shop online. In Indian
Accordingly, a decision to send the employee for households, the wife, who is the homemaker,
retraining is made. is the key decision-maker and the husband is
an enabler of technology. He is tech savvy and
attracting customers in the online space helps her shop online. Our customer profile is
Our existing customers are our best ambassadors. dominated by the working class, typically in the
If I had to list one thing which separates us age bracket of 25-35 years. Working men and
from other players in this segment, it would women have seen the highest traction on Grofers.
be ‘customer delight’. We try to offer the most Of late, we are also seeing a slightly older target
competitive prices for daily use essentials and group use the app—in the age bracket of 35-45
delight our customers with small surprises every and even more. Most of our customers seek
now and then. We started a ‘Tweet n Shop’ convenience but are price conscious at the same
initiative where you could just tweet @Grofers time. At Grofers, we have an app along with a

photo courtesy: Grofers
website to cater to the larger audiences out there. role of innovation in customer service
It is quite intuitive and comes with features like Our technology and innovations are always
reorder, in-app support, chat, live order tracking, designed keeping customer needs at the heart
and not to forget the ease of payment. Seeing that of the solution. Before any innovation, we ask
people are more comfortable with websites, we ourselves, “Is this useful to our customers?”
launched one and a mobile website. You will also Grofers is all about saving time, money, and saving
find voice-based ordering possible on Grofers six you from the chore of grocery shopping. Our
months down the line. customers expect an overall ‘wow’ experience,
Most of our which is less time consuming. It starts right from
the numbers customers seek the app—we have made the interface fairly simple.
Our growth has been steady since we realigned convenience The in-app support allows one to raise any issue
our business. We get 15,000 orders a day with a but are price regarding an order or check status of orders and
ticket size of R1100 and aim to increase this by conscious at the refunds. The option to chat live with a customer
30% over the next six months. Our top-selling same time. care representative has been recently introduced.
categories are staples—atta, pulses, spices, cooking One example which changed the overall customer
oils, and rice. is the ‘real time inventory sync’. Our delivery

delivering delight D h i n d s a
fulfillment rate was 80% last year, and has gone up seeking feedback
to a staggering 99.8% now. Customers can rate their order experience via the
in-app support on Grofers app or share feedback
dealing with grievances about it by email. We also have proactive checks
Our delivery executive waits for the customer to in place wherein we call our customers to get
check all products. Any product can be returned their feedback in order to continuously improve
then and there in case of any deviation. The our services.
refund is automatically processed. We have a We have had a few improvements put into
‘no questions asked’ refund policy. If an item is place because of feedback. One such case was
missing from an order, we give 200% of the item that of returning a product because it was
value back in return. In case, a customer raises an mistakenly ordered. We previously did not accept
issue after the delivery, there is a process in line. such requests because of the huge operational
For quality issues/damaged product, a replacement costs involved. This, however, was denting
order is made or a refund is processed as per the customer experience. Now, the process has been
requirement of a customer. implemented and we take such exceptions for
The option to
new customers and at the same time, educate
chat live with a
empowering employees them about the process too.
customer care
Our approach in resolving a complaint is
representative
straightforward. The employees are empowered broadening base
has been recently
to take exceptional calls. Managers are always While we started the app for the smartphone
approachable for escalations and executives have
introduced. user, we realized there are people who love our
the freedom to walk up to the senior management service but prefer to use the web instead. There
for resolving issues. were people who did not use our service simply
because we were app only. We received plenty
of queries about this. So, we assembled a team
of talented engineers and designers to bring
the Grofers ordering experience onto the web
platform. This move further helped in driving
order volumes for us. Our website now accounts
for 20% of our total orders. �
As told to Ashutosh Gotad

photo courtesy: Grofers
01 http://www.businessworld.in/article/Rush-For-Grocery-On-
line/04-05-2017-117551/
02 http://retail.economictimes.indiatimes.com/re-tales/indian-
online-grocery-retailing-will-grow-despite-challenges/1959

IS YOUR
THINKING
FLAWED?
Robin Speculand, founder and CEO
of Bridges Business Consultancy
Int, dispels myths surrounding
strategy execution.
graphics by darshan sompura

myth buster
myths
BUSTED
0 1
execution planning is done
after strategy planning
0 2
change management is
the right approach for
implementing strategy
0 3
focusing on more, we
achieve more
0 4
money is the primary
motivator of people
at work
0 5
strategy execution
needs to be only
reviewed once or
twice a year

ith more strategy executions failing than implementation. Yet a majority of executives admit their
W succeeding—67% succeed according

to our 2016 research—my aim is to
challenge your beliefs. Why? Because if we
constantly fail at something more than we succeed there
must be a flaw in our thinking.
companies fall short. They acknowledge a disconnect
between strategy formulation and implementation.
Paul Leinwand, Cesare Mainardi, and Art Kleiner stated
in their 2015 Harvard Business Review article that only 8%
of leaders are effective at both creating good strategies and
I have been researching and consulting companies in executing them.
strategy execution for seventeen years and over that time In achieving excellence in execution, execution is
I have seen leaders habitually repeat the same mistakes. planned as part of the organization’s strategy planning and
Strategy execution is in its infancy but is becoming more prepared before it is launched. Taking time to develop your
important in business as organizational and strategy life execution plan does not dilute from the strategy planning.
cycles are becoming shorter. In the 1950s the average Rather, it adds tremendous long-term value.
company would live for 61 years, today it is eighteen years.
Almost 52% of the Fortune 500 companies since 2000 are 02 change management is the right approach
gone. According to Professor Richard Foster from Yale, for implementing strategy
“By 2020, more than three-quarters of the S&P 500 will be Change management has frequently been the default
companies that we have not heard of yet.” approach for executing strategy. It works well for projects
Just 20 years ago it was not unusual to have a strategy and initiatives within departments and divisions but not
for 10 years. Today, the average strategy is three to five for a corporate-wide execution of a strategy. If it did, there
years. These shortened life cycles mean that when a would not be such a high failure rate. Change management
company plans a new strategy, the pressure is to deliver on is a ‘component’ of strategy execution and should not be
its promises to stakeholders by doing it right the first time, used for executing it.
and for that to happen, five key beliefs have to change. It also does not work because achieving excellence in
execution requires transformation from the core. Change
01 execution planning is done after strategy management typically involves only change around the core.
planning Transformation has to come from the heart of the business,
Strategy planning was introduced as a discipline in the not peripheral change. Decoding the execution challenge
mid-1960s. Since then, organizations are striving to requires that leaders of each organization make it their own.
develop their ability to craft strategy and we are still
learning. For example, we understand the word ‘strategy,’
but we do not have a common global definition for it.
In its report Why Good Strategies Fail, the Economist Change
Change Management
Intelligence Unit reported in Lessons for the C-Suite that Management
senior executives recognize the importance of strategy
Excellence
in Execution
Taking time to develop
your execution plan does not dilute from the Change
Management
strategy planning. Rather, it adds tremendous
long-term value.

myth buster
03 focusing on more, we achieve more often critical corrections along the way. These corrections
How many strategy objectives should a company focus have a disproportional effect on the outcomes. It is like
on in a year? If it focuses on three, it will achieve three. If when astronauts fly a spaceship to the moon, the smallest
it focuses on four to ten, it will achieve one or two. If it correction can make the difference between landing on the
focuses on 11-20, it will achieve none. moon and completely missing it. Along the way, astronauts
When you have too many actions to do, it becomes hard have to check the spaceship’s location in outer space
to focus on any one. Also, your resources such as funding relative to where it is heading. Similarly, you check your
and time are stretched. The outcome in this situation can organization’s location on the implementation journey
be that nothing gets done. If you try and implement too relative to its strategy objectives.
many strategy objectives, then you end up doing less, and Unbelievably, many leaders do not conduct reviews
sometimes nothing. frequently enough. As a result, by the time they do check
The aim is: ‘less is more.’ By focusing on less you send on progress, it can be too late to get back on track. Small
a stronger message, allow for reallocation of resources to problems can turn into large problems, creating a snowball
the right actions, and create a more focused company. effect.
Achieving excellence in execution demands conducting
04 money is the primary motivator of people regular reviews. Also, the only way you know a strategy
at work is good or bad is by executing, testing, and reviewing it.
Many leaders believe money is the number one motivator Yet, the Bridges’ 2016 survey revealed that almost 50% of
of people at work, but in most situations, it is not. Instead, organizations review their strategy execution fewer than
receiving the right kind of appreciation at the right time three times a year, while only one in five review it once a
inspires people. Employees pay attention to what gets month.
reinforced more than what is said. They also share with So how often should you review strategy execution?
each other the recognition they receive. “Money motivates I suggest leaders ask their people every week what they
neither the best people nor the best in people. Purpose are doing to contribute to the execution. Then every two
does,” says Nilofer Merchant, a business innovator. weeks, they conduct reviews in each business vertical to
A study conducted at Massachusetts Institute of examine different components of the execution. That
Technology and funded by the US Federal Reserve Bank way, by the end of every quarter, they have a complete
revealed many surprising findings. It demonstrated that, for assessment of the execution progress. Then they would
straightforward tasks without much cognitive application, review the overall performance once a year.
money motivated the worker. However, as soon as It takes discipline to change the dialog across an
cognitive application was required, paying people more organization. Leaders are responsible for creating the space
actually had a startling effect on their performance. A larger for the reviews first on their own calendars. Commonly,
reward led to poorer performance! they find this difficult because they get swept along by the
A sense of purpose is often the primary motivator of current of everyday activities. �
people at work, especially among millennials.
05 strategy execution needs to be only

reviewed once or twice a year
Regular reviews sustain the execution. Executing the
strategy requires moving from theory to practice, from
concept to conceptualization, and from formulation to The article is based on Excellence in Execution – How to Implement
execution. Reviews support success by making small but Your Strategy.


...just
smartsmart
an
leader
excuse
leader
S i n gN
han
y ai ar
suiting
the
The Smart Manager May-Jun 2017
world www.thesmartmanager.com 17
He was born in 1965 in a Marwari family. He took over the reins of
the family enterprise in 2000. Facing a tough scenario, he speedily
divested the non-core businesses of steel, cements, and synthetics.
He stayed true to the business primary premiseof bringing wool
from the back of the sheep to the back of the man. The companys
stores are contemporary and stylish, yet follow the original model
conceptualized by the founders. He believes a promoters first
obligation is always business; everything else will then fall in place.
He launched KamaSutra condoms in 1991. He has a keen sense of
fashion and is often a guinea pig for all his brands style experiments.
He has a penchant for all things fastcars, jets, and power boats. His
passion for cars led to the creation of the Super Car Club, the first of
its kind in India. He became the first Indian to win a race in the Ferrari
Challenge in 2015. A gracious host, he is personally involved in the
planning and security of guests at his annual parties. Outspoken, non-
conformist, and risk taker are some of the words used to describe him.
An ecommerce skeptic, he is an avid tweeter. One day at a time, is how
he prefers to construe life; for him, life is a journey and not a destination.

...just
smart anleader
excuse
S i n gN
han
y ai ar
prominent management thought companys day-to-day management, or being

leader once told me that a good skeptical about the online business story, Singhania
business strategy is one that can be has always embraced the unconventional path. In
outlined in a short time without this exclusive interview with The Smart Manager,
any bells and whistles. Gautam Hari Singhania, he talks about why Raymond continues to be an
Chairman and Managing Director, Raymond aspirational brand and why strategy, at the end of
Group, in what may be the shortest-ever cover the day, is only about enhancing shareholder value.
feature interview, took me through his companys Simple, is it not?
growth strategy and future plans in a little under
sixteen minutes. Without missing a single detail.
Taking over the mantle from his father, the
legendary Dr Vijaypat Singhania, he engineered a
turnaround and made the company 21st century-
ready. Whether it is producing Super 250s,
the ultimate luxury fabric, or creating a store
that delights Gen Z, Raymond has successfully
straddled a wide spectrum of customers. Many
may cavil at the companys quarterly numbers
which are not heartening, but if one looks
beyond them, one can see the company is on the
right track.
Raymond is keeping it simple. It is sticking to
its core strengthfabricsand building on it. It
is testing new markets and offering innovative
products. And most importantly, it is clear about
what the brand stands for and signifies to the
customer. While the world went the ecommerce
way, Raymond bet on its bricks and mortar stores,
and invested time and money in renovating them.
It is perhaps the only company in India to cross
1.5 million sq.ft of self-controlled retail space
in the business of lifestyle and fashion. Even as
ecommerce majors are fighting for market share,
Raymond has a clear pole position.
Whether it was the decision to divest non-
core business or engage professionals for the
The Smart Manager May-Jun 2017

‘Raymond is the
only brand
that grows
2
times on the
price point’
...just
smart anleader
excuse
S i n gN
han
y ai ar
A common thread across most articles and brand that grows 2000 times on the price point. There is no
interviews on the Group is the 2021 vision... brand in the world that does it.
Not 2021, but 2020. It has probably become 2021 since we With increased variance, in the white shirt category
lost one year because of the way things are... we are now a dominant player in the country. We have
introduced Raymond Whites, coupled with world-class
Could you elaborate... products such as light-weight jackets and top-end sweaters.
We are not going to divulge our strategy. However, we have Our apparel business has been witnessing strong double-
a clear vision of what we want to do and you will see it digit growth over the last three years, which is significantly
unfold slowly. It will play out the way it is required. ahead of the industry growth rate and we will continue to
Eventually, no strategy is good if you do not deliver scale up this business to attain profitable market leadership.
shareholder value. So, whatever we do is fundamentally
aimed at enhancing shareholder value. That is the direction How has the Ethiopian foray worked?
in which we have to move. Actually, today (18th April, 2017) is a historic day for us
as we could start some commercial production last night.
Raymond’s present strategy revolves around I think Ethiopia is a very misunderstood country; it is the
upscaling and growing your existing inhouse gateway to Africa. Most people do not understand this; they
power brands and expanding into newer still associate it with 25-30 year-old pictures of famine and
markets. What are the new markets you are poverty. I think the Ethiopian government is proactive and
looking at, both national and international? positive, and keen on promoting industry there.
The three fundamental markets are Europe, America, and It is a low-cost manufacturing base. Also, from an
Japan. These are really the big ones. Apart from these, we export point of view, being a least developed country it
have the Middle East and Africa, which are relatively small. has massive duty advantages to America and Europe. So
My focus is to find five very large customers in each of our manufacturing unit there enjoys cost as well as duty
these three markets and work towards being more than just benefit. Both together give a significant advantage to the
a vendor; to be a strategic partner to them. So, our fortunes company and its customers.
get tied to a certain extent.
As for growing our inhouse brands, apparel business Raymond today has transformed from a
is a strategic core for Raymond with four power brands traditional textile business to a complete male
in the portfolio—Raymond, Park Avenue, Parx, and grooming brand. It caters to a wide demography
Color Plus. We are among the three biggest apparel brand of customers—Gen X to Gen Z...
players in India today. Our growth strategy is based on the If you look at the last ten years, a conscious decision we
triad of sharpening our product portfolio, enhancing and took—and it is evident now—is to bring the brand ‘up’—in
expanding our retail footprint, and effective go-to-market terms of age profile, not in perception. We have expanded
strategies. Our power brands complement each other our offerings—increased cotton, wool and silk offerings, and
to offer complete wardrobe solutions for the discerning introduced linens, made to measure, and custom tailoring.
Indian male. We have also enhanced the product range significantly.
In products, our focus is to sharpen brand positioning, Previously, plain dark suits ruled the roost, but now we have
leveraging each brand to its full potential—thereby checks and brighter colours. So we have upped the offerings
capturing the ‘full wallet’ of our customers. Our range is and this has opened up the market so much. Initiatives such
available from R150 to R300,000 a meter. We are the only as ‘made to measure’ are game changers.

scale overall production to 26 million meters by 2018 at our
leadership quotient
Kolhapur facility.
You are experimenting with the format of the

WORK-LIFE BALANCE: it is just good planning. If you plan well, you will find it.
IS RAYMOND A FAMILY-OWNED BUSINESS OR A PROFESSIONALLY RUN company’s next-generation stores—experiences
COMPANY: it is a family-managed, professionally run company. that would delight a millennial and at the same
RESOLVING CONFLICTS: through discussions. time not intimidate Gen X. What are the salient
features of the new-age stores?
MENTORS: I learn something from everybody, everyday.
We are focusing to expand aggressively in order to create
FAILURES AND LESSONS LEARNT: lots of failures, everyone has them.
Making a mistake is not wrong, but not learning from it is. an optimal retail footprint through exclusive brand stores,
large format retail footprint, and multi-brand stores.
A BUSINESS QUOTE THAT YOU LIVE BY OR FOLLOW: when in business,
make money. With 1100 exclusive brand retail stores and market reach
spanning 400 cities, Raymond is the largest and the most
penetrated fashion retailer in India. Beyond continuing
to expand store reach optimally, we are also renovating
One of the fallouts of restructuring is that and digitizing our existing stores to enhance shopper
brands tend to lose their traditional customer experience. We have also created a unified, robust CRM
base. What has been your experience? platform with sharp analytics-driven actionability to
We have enhanced the range, not configure a digitally immersed
reduced it; so we have brought omni-channel business. We are
in more customers. We have not also experimenting with the
lost our core—fabrics. Everything design of the store. In the Thane
is built on that; we have pure store, space is the prominent
wool fabrics, exotic fibre fabrics, element. Similarly, the store at
polyester wool, polyester viscose, I have not been an Indira Nagar (Bengaluru) has a
blended fabrics, and a huge range advocate of the online lot of visual media—a moving
of cotton fabrics. We have also got video screen as its window, and
into backward integration and are space per se. I think everything sold on an iPad.
making linen fabrics. shopping, more than
We are setting up a huge anything else, is an In an era when most
plant in Amravati as a part of believe bricks and mortar
the Make in India initiative; this experience. stores may not be viable,
facility will provide employment Raymond stores are getting
potential exceeding 8000 workers larger. Does this mean the
with capital infusion of about Indian customer is not
1,400cr in different phases. This going to buy online?
project is aligned with our strategy I have not been an advocate of
to expand the cotton textile the online space per se. I think
manufacturing footprint by creating world-class linen, shopping, more than anything else, is an experience. If
cotton shirting, denim, and garmenting. The new plant you go to malls, it is an experience; it leads to an impulse
will ramp up our production capacity to 46 million purchase. I do not know anybody who goes to a mall
meters in the next three years. We are also looking to saying he needs to buy a suit. But if the customer has

...just
smart anleader
excuse
S i n gN
han
y ai ar
photos courtesy: Raymond
Raymond's Bengaluru store has integrated lot of visual media such as moving video screen as its window, use of iPad to sell merchandise, etc.
got an hour, he walks in, looks at stores, and ends up commodity such as bath salts or shavers. For example, I
buying something. had a particular brand of shaver. When mine packed up, I
If you look at the online space, most of them are using needed another one with the same specifications. So that
somebody else’s [investors’] money and subsidizing it could be bought online. Buying commodity products
[goods]. This [model] fundamentally does not make becomes easier online because there is convenience.
money. I mean it is not as if I am going to charge more Similarly, a soap—we would sell Park Avenue soap online;
because a customer walks into our store, but you are not the customer knows the product and its specification is
going to get it cheaper without somebody else paying for it, clearly defined.
if it is online.
You do not believe in the China story. Why? And
But you also have forayed into these channels. what can India do better?
How do you plan to integrate them? Everybody talks about China and its success. But if China
I think a lot of people go online to research. Today, the was actually so good, why are my exports growing? I have
consumer is much more informed. I do a lot of online this theory. It basically says they make the quantity, we
research to look up products, the way they are designed, make the quality; they make the volume, we make the
compare, etc. But I want to see the product unless it is a value. You cannot make chalk and cheese in the same

rsmart
a y a N eleader
s u c xe n
Sai n gt s
hua nj .i.a.
factory. There is a consumer that Our success lies in the fact that
just wants large volumes at a low we pursue innovation as a part
price point. But then you cannot of an ongoing strategy and not as
make what I sell in that factory. a knee-jerk reaction imposed by
China is different. I am not market conditions.
China is different. I
saying it is not going to succeed,
but its game is different. We have am not saying it is not Five years down the line,
to understand that they operate going to succeed, but what would India be—a
in a different space. Why are my manufacturing-led economy
its game is different.
exports going up if China was or a services-led one?
really so good? And it is not only We have to understand I think it will be a balance of
about the product and quality. It that they operate in a both. We have core strengths in
is also not just about the pricing. manufacturing. However, India
It is about the whole package—
different space. being such a large country also
do they answer your phone call? needs services—whether you
Do they service properly? Do take aviation, retail, IT, or
they respond? restaurants—as you have a
One of my largest customers ballooning middle class.
just doubled his order with
us. Why would he do it if he could go to China? He is How do you strike the balance between a
obviously getting something here which is valuable. Let us mentor and being interfering, especially given
look at an example. A $30mn, $40mn, or $50mn customer that you are the brand custodian?
would have obviously looked at China. I am not talking My role is very clearly laid out. I think when an individual
about something he is buying for $50,000. I am talking is secure in what he is doing and puts the right people and
about something like $10mn. He may have looked at six trusts them, he does not need to interfere. In fact, in my
options and decided that India is the best place to buy from. company the complaint is I do not give them as much time.
He chose me, may be because I gave him the full solution, Once you create a system, you should let it work. I get as
from fabrics to garments. little involved as I need to. �
Anti-globalization and protectionism are

prevalent sentiments today. How should
companies, which depend on exports for their
revenue, recalibrate?
Think it differently. You know the world is going to
change. Twelve months ago, who would have thought
of Brexit? Who would have thought Donald Trump will
be elected as President of the United States? Who would
have thought of demonetization? And there are so many
things which were unthinkable that have happened. So let
us brace ourselves for volatility. Something will happen
in Korea, something will happen in Syria; anything can
happen. So you just have to live in this VUCA world. (In conversation with Poornima Subramanian.)

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+91 022 6734 1010 I ho@spentamultimedia.com
poornima@thesmartmanager.com India’s rst world-class management magazine

gift of time G r a t t o nwork-life
and Scott
LYNDA GRATTON ANDREW SCOTT

IS PROFESSOR OF MANAGEMENT IS PROFESSOR OF ECONOMICS
PRACTICE AT LONDON BUSINESS AT LONDON BUSINESS SCHOOL.
SCHOOL AND AUTHOR OF EIGHT BOOKS
INCLUDING LIVING STRATEGY AND
THE DEMOCRATIC ENTERPRISE.
gift of time
In The 100-year Life, Lynda Gratton and Andrew Scott refer to a French fable in
which a nymph, Ondine, curses her husband Palemon: as long as he is awake, he will
breathe; as soon as he sleeps, he will die. From that time on he spends every moment in
frantic activity, fearing death. Will an extended three-stage life be like this—entailing
constant work, boredom, and missed opportunities—or full of possibilities?
F
or much of human history, life was well countries, or even within countries, in general, life is
described by Thomas Hobbes’ famous quote as now less nasty, less brutish, and certainly less short. The
‘nasty, brutish and short.’ However, continued challenge now is to ensure that this progress continues in
scientific, economic, and social progress over the face of growing longevity.
the centuries has raised living standards and life expectancy. Over the last 200 years, best practice life expectancy
Whilst these benefits have not been spread equally across has increased at a near constant rate of more than two

are prepared to save more, the inevitable consequence is
India may start with a they will have to work longer. Simple calculation suggests
lower life expectancy that given the current level of household savings in many
than the US, but it is countries, those aged 20 today are likely to be working
rising in much the into their late 70s or even early 80s and those in their mid
same way. 40s into their early or mid 70s. We need to create a world
where this is feasible and beneficial—a way that makes a
longer life a blessing and not a curse.
the end of the three-stage life

However, this is not just about working longer—the
years every decade. In 1900, life expectancy in India was broader challenge is how to restructure social and working
24 years, compared to 49 years in the US. By 1960, the lives to make best use of these extra hours. The life
US’s life expectancy had risen to 70 years while India’s had structure that emerged in the twentieth century—a three-
only risen to 41 years; the gap in longevity between these stage life of education, work and then, retirement—is
two nations was widening. However, as India’s economic unlikely to survive this elongation. How can you maintain
success picked up, the gap narrowed. By 2014, India’s and build productive assets when most education takes
life expectancy was 67 years and the UN demographic place in your 20s? How can what you have learnt remain
forecasters estimate that this should increase at the rate of relevant over the next 60 years against the backdrop of
around two years every decade. India may start with a lower technological upheaval and industrial transformation?
life expectancy than the US, but it is rising in much the There is also the question of vitality. Whilst an unbroken
same way. In many countries around the word, the same is extended working life may solve the financial challenge of
true—the 100 year-life is becoming a global phenomenon. longevity, it will inevitably deplete other important assets of
What does this extending arc of life mean for people, life such as health and friendships.
and how can government best respond? In many countries,
the main focus of governments is on dealing with ageing
and end-of-life issues such as pensions and healthcare.
But longevity is not just about ageing—it has crucial
implications for all ages. Already people are marrying and
having children later, creating mid-career breaks, taking
time out to explore, building their own businesses, going
back to education. This is already leading to a redefinition
of age—how many times have you heard that 70 is the new
60, or 40 the new 30?
working longer
Those who live up to a 100 years have around 100,000
extra productive hours than those who live up to 70.
Undoubtedly, work will take a significant portion of these
extra hours. Historically, low interest rates and growing
longevity are destroying the inadequate provision societies
have made for future pension support. Unless people

gift of time G r a t t o n a n d S c o t t
A way around this is a multi-stage life, made up of

different stages with transitions and breaks in between.
In one stage the focus may be on accumulating financial
assets, in another on creating a better work-life balance.
Sometimes the switches will be driven by personal choice,
at other times forced by technological obsolescence.
These multi-stage lives require a proficiency in managing
transitions and reflexivity—imagining possible selves,
thinking about the future, re-skilling, and building new
and diverse networks. At its best, it offers people an
opportunity to explore who they are and arrive at a way of
living that is nearer to their own personal values. Might it
be this growing realization of longevity that is behind many
of the often-stated claims about how ‘millennials have
different values and attitudes towards previous generations?
the end of age segmentation

Take a look around most workplaces and you will see clear
signs of ‘age segmentation’—people within the same age
group spend most of their working day with each other. People try out new ways of living and working—be
The clear-cut three stages inadvertently strengthen the it building their own business, exploring, or creating a
boundaries between age groups. If you are 20, then you portfolio of tasks and activities. These new stages will be
are likely to be in college; in your 30s, you are probably ‘age agnostic’. Right now, it is mainly youngsters who are
working full-time; and at 65, you will be retired. taking time to explore through their ‘gap year’, but rapidly
There are a few advantages of age segmentation, and it will be other age groups—40-year-olds taking time to
many disadvantages. When people mainly interact with recuperate, 50-year-olds learning a new skill, 60-year-olds
their own age group they tend to stereotype other ages— travelling the world, 70-year-olds going back to fulltime
they simply do not see the variety within other age groups education. Similarly, people of any working age will build
and instead use simple concepts to describe them. They their own business, or create a portfolio. And as people of
also fail to develop cross-generational friendships that can many ages engage in the same activity the benefits of being
be such a source of knowledge and support. ‘age agnostic’ will be really felt. It is hard to stereotype what
But this will change and it is likely to change first a 70-year-old is like when you are travelling with them
at work. exploring the world, or what a 20-year-old is like when you
are building a business with them.
This dissolving of stereotyping is all for the good, but
there is more. Different ages inevitably have their own
unique profile of insights and experiences. When they
begin to meet each other as equals, this knowledge is more
Different ages inevitably
likely to flow between them to the advantage of everyone.
have their own unique
Breaking the silos of age will happen fast and it will be
profile of insights
and experiences. good for everyone. �

illustration by swapnil redkar

content, context, and conversations
interview
Ru t s k y
KEN RUTSKY
IS A B2B MARKETING CONSULTANT AND
AUTHOR OF LAUNCHING TO LEADING,
HOW B2B MARKET LEADERS CREATE
FLASHMOBS, MARSHAL PARADES, AND
IGNITE MOVEMENTS.
content, context,
and conversations
As per B2B Content Marketing 2017 Benchmarks, Budgets, and Trends—North
America, 70% of B2B marketers say they will produce more content in 2017 than they
did in 2016 and 39% of B2B marketers say they will increase spending on content
marketing over the next twelve months. Content is key for any marketing initiative
to succeed. However, in the present world of information overload, content without
context merely is a ‘low-test fuel, prone to knocks and stalls’. In this exclusive with
The Smart Manager, Rutsky talks about how B2B companies can break through and
lead when they control the context of the market conversations.

You urge companies to resist the temptation to
Organizations who customize the solution. Why?
better connect to the Sellers must realize that today’s buyers are highly educated
customer’s world and and fiercely independent. The days of showing up and
make it better are the questioning and qualifying a prospect before presenting
ones who are seen as your solution are over. They want sales representatives to
differentiating. teach them something, not question them.
If most companies follow similar strategies, how

will they differentiate their communication?
Organizations who better connect to the customer’s
T
o become market leaders, you world and make it better are the ones who are seen as
say, organizations should exert differentiating. Your solution still matters, but it takes
influence on the context of second, as it should to your customer’s success.
market conversations...
Markets are at their core conversations between buyers How can companies break the quantity vs
and sellers. The topic of the conversation is the exchange quality trade-off?
of value. As a buyer, I am exchanging my time and money Marketing organizations invest in automation and
to obtain the benefits of the sellers’ product or solution. programs and can get a quantity of leads, but the quality
However, value is a very subjective judgment that the suffers. They are efficient, but because they are still
buyer makes. That judgment is made in the buyer’s messaging for the old world of solution selling, they are not
context, not the seller’s. If we can first tap into that context effective. They have built a great race car, but are putting
in a way that is meaningful to the buyer, we can then bad gas in the engine. Instead, they must take a focused
influence the context and ultimately connect our value to approach on breakthrough messaging, which starts with
that context influencing what the customer values in context and ends with unique value. Then the high test
our favor. fuel will get them not only quantity, but quality results.

content, context, and conversations Ru t s k y
How has marketing changed and what are its they do not know. Great sales reps are business people,
implications? teachers, and most of all storytellers. Yesterday’s best
Firstly, we have gone from information being closely held, reps were recital musicians, focusing on the score that
hard to find, and metered out by sellers to being readily marketing provided. Today’s are jazz improvisers, tailoring
available to buyers on the internet, on social media and the notes to the customer’s world.
everywhere. Secondly, buyers are now independent and
lastly, we are competing with more available alternatives What is the relevance of scaling in B2B sales
than ever. In short, we now live in a buyer-driven world. and marketing campaigns?
We live in a short-attention-span world. We must be
Why is content commodity? able to communicate quickly with a sound bite or a few
Anyone can copy your words. Talk is cheap. What you say sentences. At the same time, buyers still need details and
today will be copied. Also, there is more content generated more complete information to both qualify and justify
now than ever. We not only have fake news, we have a lot their purchases. If a message does not scale from a sound
of fake marketing! bite, to a video, to a blog post and to a keynote, it probably
is not a meaningful one. Marketing and sales must scale
Why is context the new king? messages to match the channel of delivery, the phase of the
Tapping into the customer’s context, so you become buying cycle, and the audience. They must use their own
strategic is how you win. Context first, content second. and other voices to repeat and reinforce their own message,
influencers, analysts, customers, partners.
What should companies do to build a strong
and unique message? What are the challenges marketers face in
Any great message starts and ends with the customer’s today’s information-filled and connected world?
story. Customers have problems and want to solve them. The biggest challenge all marketers face is both standing
They have opportunities they want to capture. Strong out and fitting in. They must fit into the buyers’ world,
messages tell the customer’s story, not their own. Their but stand out above the competitors. Personally, though
product or solution plays a supporting role in transforming marketers face a huge challenge as they must be master
the customer’s world. But the customer is the hero. It is technicians, amazing teachers, and influential evangelical
their story, not ours! leaders. They must be part Yoda, part Michelangelo, and
part Martin Luther King!
Given that information is now commoditized
and buyers are independent, what skill sets How is the AIM approach different from the
should sales reps build to stay relevant? ‘features, benefit, and product approach’?
Research says time and again that buyers want sellers to AIM describes my uniqueness on three dimensions—
understand the buyer’s business and teach them something approach, innovation, and mindset. Great companies
start with a mindset, then take a new approach and that
drives innovation. However, a lot of time they forget to
talk about their mindset and approach, and focus all on
their innovation, leaving the all important ‘why’ out of
The biggest challenge
all marketers face is the conversation. Salesforce.com took the mindset that
both standing out and enterprise software was just too hard, took an approach
fitting in. of taking on the hard work and standardizing it, and then
innovated by delivering the solution on the cloud. Many

content, context, and conversations Rutsky
of their competitors did not understand this, and just The three phases a leader goes through on the
replicated the cloud part, without a different approach. By path to success...
the time they figured it out, Salesforce was the unabashed The ‘flashmob’ is the first phase of the market leadership
leader of the market. journey. In this phase, our goal is to find and capture a
small group of passionate customers who will form the
Must-dos to create a Viewpoint story… basis of our success. These are customers highly attuned
First, you have to deeply understand your customer’s to our unique value and willing to go against the flow of
world. Once you do that and identify a problem, you solve. accepted solutions. Flashmobs take us from launching to
Second, you must articulate the pain gain gaps left when participating in our market. The second phase of market
trying to solve that problem with the expected solutions leadership is the ‘parade’. By tapping into our customer’s
available. Lastly, you describe how your new approach, context, we step in front of the market parade and lead it.
innovation, and mindset solve the problem better and take We become the de facto expert in the intersection between
the customer to a new and improved reality. our customer’s problem and the available solutions. We are
unique, recognized, and take this momentum from merely
being a participant in the market to breaking through
and leading. The last phase is the ‘movement,’ when we
become bigger than our market and change the world or
the industry. Our leadership is a given assumption and our
The ‘flashmob’ is the ecosystem and influence grow dramatically.
first phase of the market Success at each of these stages has great rewards and
leadership journey. In challenges, but the common thread is our Viewpoint,
this phase, our goal is to continuing to connect our value to our customer’s world,
capture a small group of influencing their view of their problems and opportunities,
passionate customers and transforming their reality into a more successful one.�
who will form the basis
of our success.
(As told to Poornima Subramanian)

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the art social
of giving
entrepreneurship
back Ka v i s h w a r
AJAY KAVISHWAR
IS DIRECTOR–COMMUNICATIONS
AT THE AKSHAYA PATRA FOUNDATION.
the art of giving back

Ever since its inception in 2000, The Akshaya Patra Foundation has been shaping
lives, one meal at a time. Theirs is the world’s largest NGO-run midday meal program,
serving wholesome lunch to over 1.6 million children in 13,577 schools across 11
states in India. The Foundation—while fighting the dual challenges of hunger and
education—has emerged as a brilliant model in operational excellence, technological
innovation, and quality management. This interview offers a glimpse into their
functioning and their plans for the future.
T
here seems to be an intangible spirit and corporates. It was their unwavering support which
that drives Akshaya Patra. How would helped us scale from 1,500 to over 1.6 million beneficiaries
you define it? in a span of 16 years. It was the determination of these
We began our journey with the vision, ‘no compassionate people that helped us reach the cumulative
child in India shall be deprived of education because of two billion meals’ milestone last year. Together, we
hunger.’ Over a period, like-minded people came on board have been able to form a strong system to tirelessly feed
and we grew in strength. They are from various walks of children, and in doing so, provide them an incentive to
life, including—but not restricted to—the Government come to school.

government in tackling social issues, especially
Ours is a unique initiative in developing countries like India?
in the sense that it In developing countries like India, with immense diversity
has both missionaries in terms of geography, demography, languages, etc., there is
and people from the an urgent need to foster public participation to tackle social
corporate world coming issues. One way to do this is to adopt the public-private
together for a common partnership model. There are several examples of such
cause. successful partnerships in the infrastructure sector. That
in itself makes a case for similar collaborations in the social
sector too. The Government, no doubt, has a crucial role to
play in nation building, but that does not mean civil society
Akshaya Patra is rooted in a noble vision. How should just be a bystander.
do you ensure that the various stakeholders The active participation of public and private players
share the goal? has vindicated our belief in the ‘giving back to society’
Our vision being noble, people readily associate with it and principle. The midday meal programme is a common
come on board. We consider ourselves fortunate that there platform where the central government, state governments,
is no dearth of people who can relate to our cause. non-profits, and individual and corporate donors have
come together.
Apart from those with a missionary zeal,
Akshaya Patra is also run by professionals. How Akshaya Patra operates at the intersection of
has roping in of corporate talent helped? operational efficiency, logistics, and funds flow.
Ours is a unique initiative in the sense that it has both How do you ensure a smooth, uninterrupted
missionaries and people from the corporate world coming flow vis-a-vis these three aspects?
together for a common cause. In essence, it harnesses the Considering the scale at which we operate, there is no
energy of both worlds. questioning the fact that these three aspects need to be
Ours is an organization with the heart of an NGO given due importance, which is why we have put certain
and the mind of a corporate. In fact, our organizational measures in place. Standardization of recipes, for instance,
structure replicates that of a corporate. There are helps maintain quality, and ensures nutrition and good
various departments, such as operations, projects and taste, while the FIFO (first in-first out) method helps
infrastructure, resource mobilization, and donor care ensure that all perishable items are used efficiently. Right
management. Each of these is headed by a person with from supplier quality management systems for supplier
expertise in the corporate field. selection to route optimization—to ensure that delivery
With the social sector fast emerging as one of the major vans reach school in time with piping hot meals—
sectors as far as employment is concerned, more and more measures are taken at every stage to ensure that children get
individuals are coming forward to do their bit for society. nutritious meals every school day.
If non-profits show inclination to pay better, i.e., meet All our kitchens use a toolkit to ensure that the
industry standards, there is no reason we cannot have the food safety and management system (FSMS) rules are
best of the corporate world joining the social sector. complied with, and hygiene is maintained. We meet the
highest standards of safety and efficiency—the ISO 22000
One of Akshaya Patra’s strengths has been certification should vouch for the same.
the PPP model it has adopted. How do you We make it a point to utilize funds received in the
view the power of such partnerships with the form of donations in the most efficient manner and

the art of giving back Ka v i s h w a r
communicate the [details] to anyone interested. The and third-party evaluation reports, and impact studies help
break-up of funds received and funds utilized is made us ensure transparency, adherence to FSMS, standardized
available on our website and in our annual report. recipes, beneficiary feedback, and use of best raw material
help us in guaranteeing quality. We also comply with IFRS
Embracing technology and an innovation- and Indian Accounting Standards.
centric culture have been game changers
vis-a-vis your growth—be it state-of-the-art How do you market Brand Akshaya Patra? Is
kitchens, logistics, and so on. How have these marketing a strategic imperative for a
helped you scale? not-for-profit venture?
Feeding over 1.6 million children every school day is Yes, it definitely is. It is not just important to do something
not an easy task. It is the cumulative result of innovative good, but equally important to communicate it to others.
technology, smart engineering, and good management. We There are many who wish to do their bit for society, but do
believe in leveraging technology to make the best possible not know where to begin. It is important to reach out to
use of resources and reach as many children as possible. these people with the cause you are pursuing. That makes
Some of our state-of-the-art centralized kitchens are marketing important for a non-profit venture.
equipped to prepare meals for 100,000 children at a time in Branding helps determine how we are perceived as a
just under four hours. non-profit—that is why due importance is attached to this
These centralized kitchens have served as a blueprint aspect. Being the largest NGO-run school lunch program
for the expansion of the program, which has helped us in the world makes our initiative a brand in itself. Our
reach over a million children in 27 locations across 11 brand communication wing creatively communicates the
states. Technology and experience garnered over a long cause to the target-based audience by running campaigns
period have put us in a better position in the pursuit of our such as ‘India Ke Hunger Ki Bajao’ and ‘Back to School’,
mission to reach five million children by 2020. and organizing events like ‘Chords of Giving’ and ‘Outride
Hunger’. We also use social media to reach out to those
Transparency and quality often tend to interested in our cause.
be elusive in ventures of such a humongous
scale. How do you ensure these are Akshaya Patra finds place among Harvard
not compromised? Business School case studies. What is the big
We are of the firm belief that transparency and management takeaway from your story?
accountability are key to trust and reliability, and therefore, We believe that the big management takeaway from our
we make it a point to ensure that we do not fall short in story would be that intention backed by competency is the
this regard. While the annual report, audit reports, internal most important ingredient of a successful venture.�
Intention backed by
competency is the most
important ingredient of
a successful venture.
(As told to Anitha Moosath)


thinking that matters Vy a s aleadership
nd Doughty
VIP VYAS STUART DOUGHTY

IS CEO OF IS AN EXECUTIVE CONSULTANT.
DISTINCTIVE PERFORMANCE.
thinking that matters

The Gartner Group identified thought leadership marketing as a major business trend
that has rapidly become an established field in marketing and a basis of competitive
differentiation when well-informed buyers see little perceived differences between
solution providers.*
Today, individuals and businesses need to embrace thought leadership—which is
about coming up with new ways of thinking and reinventing—as a strategy for growth.
F
ascinating, enthralling, and scintillating. the airport bookstore; they are the organizations that ignite
These are some of the attributes we assign trends that ripple through industries and shape the future.
to individuals such as Ram Charan, Noam Their ideas have a viral quality to them and TED is full
Chomsky, J K Rowling, and Stephen Hawkins; of them.
and organizations such as Apple, Google, But what does it take to become a thought leader and
NASA, and Khan Academy. Not only do these individuals how can organizations develop internal thought leadership
and organizations benefit from ample media coverage and capabilities for superior value generation and performance?
limelight, they are the go-to, top-of-mind people
that others seek for inspiration, insight, information, thought leadership in action
and innovation. Being a recognized authority in a particular field is more
They are the people whose books grab your attention at than just making great presentations. Credible thought

leadership is not a solitary activity. It is not about some
guru sitting atop a mountain having ‘ah-hah’ moments.
The practice of thought leadership involves
collaborating and catalyzing powerful ‘what if ’ thinking
with other experts. In the process, they use other people’s
minds to accentuate their own and create new depths
of thought.
Put another way, thought leaders stand out as unique
individuals because they carve out new paths through
an ocean of conformity, very often by using others as
inspiration or muses.
Boston Dynamics, a US-based engineering firm, is an
example of future thinking. At the nexus of their products
is the interface between mobility, agility, and dexterity
found in animal movements and cutting-edge technology.
leaders are visible, intensely active, and ‘on the pulse’ Using sensor-based controls and advanced computation,
around key topical issues emerging in their field of they have been able to unlock complex organic
expertise. They use keynote presentations, conferences, mechanisms to create remarkably lifelike humanoid robots
high visibility platforms, and relevant pro-bono work as capable of performing complex tasks with applications in
opportunities to amplify their ideas and create a strong, both military and at home.
dedicated fan base eager to road-test their insights. To earn the respected status and stature of ‘thought
Furthermore, they fortify their thinking by providing leader’ requires the person or organization to effectively
cutting-edge research that reveals surprising and sometimes address and overcome any potential negativity. Their
counter-intuitive perspectives, new value-generating ideas must powerfully address the likely resistance
processes, and operative practices that accelerate the and inertia they will encounter, especially from other
transition from idea to reality. intelligent minds.
What makes thought leadership particularly intriguing
and captivating is the ability to reveal previously unseen rating thought leadership
or hidden relationships in complex situations. The ability Not all thought leadership is the same. The best and most
to make connections that others cannot see creates new attractive ideas share the following characteristics:
worlds of possibility. Google is a case in point. The genesis
of the firm started with Larry Page taking a different view 01 The idea is both credible and relevant to the issues
of the emerging potential of the internet compared to the being tackled
get-rich-quick startups at that time. Viewing the internet
as a universe of nodes (computers) interconnected via web
pages generated new possibilities of navigating the new
The practice of thought
information medium.
leadership involves
collaborating and
developing unique perspectives catalyzing powerful
Central to the practice of thought leadership is curiosity— ‘what if’ thinking with
the ability to explore phenomena across multiple, diverse other experts.
disciplines, and perspectives. This implies that thought

thinking that matters Vy a s a n d D o u g h t y
as artificial intelligence (AI), big data, IoT, robotics, and

Used effectively, platform thinking. The combinatorial impact of these
thought leadership emerging fields is ruthlessly rewriting the futures of many
can be a potent traditional incumbent businesses. The impact is wide-
approach to driving ranging across many industries as disruption becomes
corporate growth. the new normal.
developing the corporate mastermind

Used effectively, thought leadership can be a potent
02 A new ‘opening’ is created that advances, improves, or approach to driving corporate growth. Sharing valuable
solves problems followers of the idea are facing knowledge with existing and new clients can fuel new
03 Industry practitioners perceive the idea as worth opportunities for collaborative consulting, business model
investing their time, effort, and money reinvention, and packaging of new business practices.
Indeed, the best game changers are those ideas which a case study
start as pixels of possibility and are then crowd-developed Infusionsoft, an Arizona-based online sales and marketing
into a range of applications. This is the case in areas such startup that has grown substantially into a half-billion-
from a practical standpoint, firms can drive thought leadership in the following ways:
leadership advocacy Promote the importance of thought leadership capabilities within
the firm as a key contributor to future success.
create a thought Establish a dedicated business group to focus on a portfolio of
leadership practice topics both relevant to the company’s strategic goals and to the
industries inside which the business operates.
establish an innovation Generate opportunities for multidisciplinary group meetings and
culture develop dialogs that can leverage diversity of thought, exponential
ideas, and design reality-testing hypotheses.
fund high-value research Provide funding and support for initiatives that could generate
credible and valuable insights that impact client performance.
position the brand Help clients articulate their problems and design breathtaking
solutions that make tangible differences to their situations.
platform visibility Deliver high-quality, data-driven original research to the right
audiences, both online and offline to maximize exposure.
focus on inbound leads as Whilst thought leadership should not be used directly as a selling
opposed to sales tool, it is a powerful pre-sales tool. It creates opportunities for
‘selling without selling’, especially to sophisticated customers.

thinking that matters Vyas and Dough ty
keeping thought leadership important

As the business reality Thought leadership can mistakenly occur like a ‘luxury’ in
shifts, it is imperative times of an economic slowdown or crises. During troubled
that organizational times, it is natural for businesses to reduce costs and focus
thinking does the on sales generation. What is often overlooked in these
same. Survival is about market conditions is the importance of preparing for the
capturing the future. next cycle of generating new directions and using thought
leadership as a driver for product/service leadership. Those
firms that use thought leadership to spur innovation have
an advantage.
Despite their recent negative publicity, Uber
dollar company using innovative thinking to drive its own announced its plans to team up with aviation companies to
business as well as its customers’, is a prime example of a demonstrate flying cars, in Texas and Dubai by 2020. For
vision-driven company. those of us old enough to remember, the Jetsons lifestyle is
Founded in 2001 and backed by a number of leading rapidly becoming a reality.
investors including Goldman Sachs and Bain Capital, the As the business reality shifts, it is imperative that
business has expanded from a tiny, strip-mall office to a organizational thinking does the same. Survival is about
modern, high-tech campus in Arizona’s Silicon Desert capturing the future. In the machine-learning algorithmic
with annual revenues exceeding $100mn and over future accelerating towards us, enhanced market perception
650 employees. and imagination are the mental faculties that will matter
Co-founders Clate Mask, a New York Times best-selling most. It is those thoughts that shift growth patterns and
author recognized by the small business community as craft new business narratives that will define the next era. �
a visionary leader, and Scott Martineau are constantly
searching for external thought leadership that would
provide the firm with an edge—from high-profile speakers
such as Simon Sinek for their annual ideas conference to
* Gartner Group, Marketing Essentials: How to Use Thought Leadership
provocative personal executive coaches. marketing report, 2010

three years
two years
one year
� Yes, I want to be world-class!

15
Strategy Marketing Analysis Resources Te c h n o l o g y Strategy Marketing Analysis Resources Te c h n o l o g y Strategy Marketing Analysis Resources Te c h n o l o g y
BILL MUNN
on how to leverage TH NINA LEKHI
your strongest on Baggits customer-
attributes. service practices.
[ PAGE-54 ] [ PAGE-14 ]
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branding
NICHOLAS IND
IS ASSOCIATE PROFESSOR
AT THE OSLO SCHOOL OF
MANAGEMENT AND A PARTNER IN
EQUILIBRIUM CONSULTING.
greed is good
“[Brand desire]…is the passionate feeling for acquisition and experience of a product
or service which is driven by a set of connected factors that are intrinsic and also
extrinsic.” Nicholas Ind, co-author of Brand Desire: How to Create Consumer
Involvement and Inspiration, discusses how more than ‘want’ or ‘need’, ‘desire’
entices consumers to brands. And how brands should cultivate desire to build a stronger
connect and engagement.
W
hich brand do you desire most? It is a to family and childhood, the sensuality of experience,
question that we have asked people time and the way that brand reflects who you are and who
and again. There are some suggestions you would like to become. Perhaps not surprisingly,
that come up fairly consistently, such the language people use is often emotional. For some,
as Apple, sports brands such as Adidas and Nike, car there is a sense of aspiration but little fantasy for the
brands such as Audi and Porsche, and fashion brands unattainable. This research led us to wonder whether
such as Prada and Levi’s, and also some unique ones—for desire for a brand (not a ‘need’ or a ‘want’ as is often
example, one person told us about his experience of a used in marketing, nor ‘love’ which is more enduring)
patisserie in Lisbon, Portugal. What are as interesting as was important and could it be nurtured and managed by
the choices though are the explanations—linkages back brand owners?

To validate our ideas about brand desire, we drew on
an attitudinal study of some 8,000 consumers that has been
repeated regularly since 2010. This work demonstrates INNOVATION
that the value of a brand is built on two pillars: brand
pressure which is concerned with awareness of a brand and
its availability; and brand desire which is concerned with
performance, personality, and emotional connectivity. Not
all brands score high on these measures—some are good EXPERIENCE STORYTELLING
at pressure but weak in terms of desire and some are niche
players (through strategic choice or lack of resources) that PRINCIPLES
are strong on desire but weak on pressure. Leading brands
though (what we call ‘desire leaders’) excel at both pressure
and desire.
An interesting illustration of a desire leader is
LEADERSHIP
Coca-Cola. It might seem an obvious choice, but what PARTICIPATION
& CULTURE
Coca-Cola observed was while it is strong on brand
pressure, there is a constant need to boost brand desire.
To retain its position as a desire leader, the brand has been
working to better align the design of its sub-brands such
as Coke Zero and Diet Coke with the core brand and has The drivers of brand desire
introduced a new, more emotional campaign around the
theme of ‘taste the feeling’. Similarly, fashion retail brand At the core of desirable brands are principles that
Zara is strong on brand pressure, due to its extensive are deeper than purpose and values, and represent the
network of stores and a business model that focuses on enduring ideas that guide the organization over time—
cost leadership and attractive prices. Yet, Zara has also often against the grain. Principles are not static, but neither
invested in generating brand desire. Its clothes draw on the do they flip-flop at the whim of managers; are enduring
same inspirations as luxury brands, its stores are located in ideas that come from the organization’s sense of being;
prime retail locations in major cities, and the interiors are are important for the organization because they provide
designed to convey a sense of exclusivity. direction and also matter for consumers. Principles help
generate both clarity as to what a brand stands for and a
how to build a desirable brand sense of authenticity that makes it desirable.
Desire leaders such as Zara and Coca-Cola have conscious
strategies to build brand desire. They recognize that
consumers like both the certainty of the familiar and
the surprise of the new, and accordingly they use the
framework of their brands to provide continuity while
At the core of desirable
brands are principles
at the same time delivering engaging experiences. This
that are deeper than
requires insights into consumer beliefs and behavior, but
purpose and values, and
it also requires a structured approach to create and then represent the enduring
maintain desire. By analyzing the way desirable brands do ideas that guide the
this, we developed a model companies can use to make organization over time.
their brands desire leaders.

greed is good Ind
it summarizes in what it calls its Gold Standards. These

At Nespresso, standards are visible in every one of its hotels. However,
there is constant what really sets Ritz Carlton apart is that employees are
innovation in terms committed to the standards and realize them in every
of product and interaction they have with customers.
delivery but it occurs A brand that has used the drivers to become highly
within the framework desirable is Nespresso. Since its launch in 2000, it has had
of the brand. a focused positioning as a luxury brand. This idea of coffee
as luxury is not immediately obvious but drinking good
coffee can feel like an indulgence. Internally, Nespresso
described the brand as the Louis Vuitton of coffee—an
The renaissance of Danish toy company LEGO is an ambitious idea, but one that gave them a clear direction.
apt illustration of this. Twenty years ago, to combat the The idea helped them decide how to manage the brand
emergence of online games, LEGO moved away from experience through its different touchpoints, to borrow the
its core product of plastic bricks and the idea of a system codes and language of luxury brands (for example, calling
of play, to embrace a variety of different forms of toys their limited edition varieties Grand Crus) and to pay
and experiences. With some exceptions, most of these attention to the small details of design. It also meant that
innovations were ineffective and in 2004, the company like luxury brands, Nespresso would have to think beyond
posted its third annual loss in five years. Enter a new simply selling the capsules and the machines (which were
CEO—Jørgen Vig Knudstorp—and the renewal of its expensive) to ritualizing the experience by creating a
traditional principles based around the brick. Peripheral sensual, boutique-style environment.
products were sold off and joint ventured, and the At Nespresso, there is constant innovation in terms of
company became more focused. When LEGO was aiming product and delivery but it occurs within the framework
for scale, it was unsuccessful but when it concentrated on of the brand. It also brings its customers into the fold by
being true to its principles and providing its mostly young inviting them to join the Nespresso Club—indeed it was
consumers with an engaging experience through relevant the club that recommended actor George Clooney as the
brand-aligned innovation, it inadvertently became big. In face and voice of the brand. The brand has clear, fixed
2014, LEGO emerged as the largest toy company in the principles, but it also innovates continuously; it encourages
world, with margins of over 30%. participation, but it also has a clear idea of what it wants to
The other drivers of brand desire all feed from achieve; it creates a luxurious brand experience, but it also
principles. Most of the brands we feature (except the really makes the brand open and accessible to all. Sometimes,
high-end luxury ones, whose appeal lies in their rarity) aim brands seem to struggle to balance these competing needs,
to be accessible to people and some even go further and but Nespresso shows that when they are well managed
encourage the active participation of consumers and other they can create and sustain brand desire. �
audiences. This makes people feel closer to the brand and
helps ensure it remains relevant and appealing. However,
for participation to work, companies need cultures that
are built on trust and encourage employee participation.
Leaders need to ensure that employees understand the
principles of the organization but then set them free to
deliver compelling and authentic experiences. For example,
hotel chain Ritz Carlton has a compelling brand story that


technology
LIRI ANDERSSON LUDO VAN DER HEYDEN

IS FOUNDER OF this fluid world IS CHAIRED PROFESSOR OF
AND GUEST LECTURER AT INSEAD. CORPORATE GOVERNANCE AND
PROFESSOR OF TECHNOLOGY AND
OPERATIONS MANAGEMENT AT INSEAD.
the new normal

For over a decade, companies have been urged to ‘digitalize’ or risk getting left behind.
The specific technology innovations introduced by the digital revolution such as mobile,
apps, ‘the cloud’, big data, and 3D printing are shaking up businesses and organizations.
The digital journey has passed a frontier into a land that no longer distinguishes
between digital and business, as these are now unavoidably linked. However, in
this passage a fracture is being revealed: top corporate leaders across the globe are
insufficiently directing the digitalization of their companies. For this category of
leaders, more than for the rest of the organization, digital is at best confusing and at
worst unclear.
To support business leaders—executives and boards alike— in their effort to
digitalize, INSEAD, in collaboration with the consultancy ‘this fluid world’,
have issued a report, Directing Digitalisation: 11 Guidelines for Boards and
Executives. The concepts covered in this report are grouped under three key
headings—environmental, organizational, and strategic, which are discussed below in
the context of India.

n essential starting point in a company’s
A digital journey is a thorough and grounded

understanding of how digitalization impacts
the external business environment. That view
and assessment are critical in determining the direction
of a company’s thinking and future action. Foreign
multinationals have, if well coordinated, the advantage
of gathering the necessary intelligence from a workforce
and a knowledge base, that is both global and on the
ground. Indian conglomerates with a more traditional
and centralized way of doing business, as well as other
Indian firms with a wide yet local or regional business for the creation of the digital road map, uniquely adapted to
scope, may find this exercise more challenging as their the regional market’s aspirations and opportunities. Having
experience is narrower. These Indian firms will tend to rely succeeded, the challenge for these firms will be to explore
more on knowledge obtained from generalist reports and whether typically leaner and simpler concepts and solutions
consultants, often written from a non-digital perspective, developed for the Indian home market can be exported to
rarely adapted to the firm’s local context. the rest of the world.
Success in a digitalized economy requires a lean
impact on the organization and agile corporate structure fuelled by the continuous
The organizational implications of digital are many and collaboration and ongoing conversations across layers in the
varied. Digitalization may require a radical review of the organization—shareholders, boards, executives, managers,
firm’s mission, both industrially and geographically, as well and ‘frontline’ employees as well as customers. The
as an adjustment of its business model(s) and method(s). hierarchical nature of many Indian corporations may prove
It must therefore be driven from the top, with full buy-in too hard a challenge, with hierarchical barriers impeding
from the executive and board teams. The challenges to the necessary free flow of information, communication,
achieving such outcome are not really geographical, but ideas, and feedback throughout the business.
foremost intellectual and cultural, and heavily depend on Digitalization entails exploring new business models,
the competent guidance of an open-minded leadership new market segments, and revenue streams. Organizations
team, prepared for a potentially disruptive approach will have to launch ambitious experiments, learn from
to change.
Rather than searching for a blueprint or benchmark
to guide them through digitalization, these leaders
are well advised to define their own digital road map.
Multinationals, such as L’Oreal, P&G, and Coca-Cola,
are likely to take a centralized approach to defining their
Success in a digitalized
digital road map. The task for their employees in India is
economy requires a lean,
often restricted to adapting the global digital initiative to
agile corporate structure
fuelled by the continuous
the local needs and realities of the country, both cultural
collaboration and
and technological. Indian conglomerates with a more
ongoing conversations
traditional and centralized way of doing business, such across layers
as the Tata Group (and its formidable Tata Consulting in the organisation.
Services firm) and Reliance Group, will take responsibility

the new normal A n d e r s s o n a n d H e y d e n
impact on strategy
A reshaping, if not Business strategy in the digital age will become a
a disruption, of the continuous process, with strategy formulation and
leadership function execution happening simultaneously, benefiting from a
and of the monolithic seamless and immediate feedback loop. The speed and
organizational complexity of digital decision-making means data is playing
structures an increasingly strategic role. Here again, India is well
is necessary. positioned, as the country benefits from an advanced data
driven and analytical culture and mindset. Multinationals
with a presence in India as well as local firms benefit
from affordable and talented local companies for data
these, and rapidly take the learning on board. India provides management and analytics to support leadership in their
excellent opportunities for exploration, particularly where decision-making process. A promising outcome would be
the constraint of legacy systems or thinking is minimal. In for the growing Indian IT sector to be complemented with
addition, those organizations in India looking to innovate a growing ‘data and insight mining’ sector—a key capability
in the digital space are well positioned through access to a in digitalization.
young, well-educated, and IT-savvy workforce. Firms in
India do not face the challenges of many other countries, conclusion
as the continent produces and attracts digital talent in Digital, like every revolution, can be viewed either as a
plentiful numbers. catastrophe or as a world of opportunity. In our opinion,
Digital also provides a direct opportunity for Indian this largely depends on whether vital allegiances and
SMEs to capitalize on technology, and its bountiful supply power lie with the old order, or with the new. As with any
of digital talent to widen its business scope internationally. large-scale organizational and cultural change, digitalization
This would link the Indian continent to the rest of the will never take hold unless top executives drive it. Indian
world in a way it is not at present, while increasing its firms looking to survive the digital revolution will face
number of homegrown multinational corporations. the same challenges as their global counterparts, which
amounts to translating the impact of digital to their
industry, firm, and day-to-day operations. For this to
happen, a reshaping, if not a disruption, of the leadership
function and of the monolithic organizational structures
is necessary, where boards and executives ensure that
the ability to understand, adapt, and change is built into
the very fabric of a more focused, integrated, and
collaborative organization.
Digitalization can lead organizations to attain
unprecedented levels of innovation, competence, and
effectiveness—with fundamentally positive results for
both firms and society. The promise of digital for India is
of the same impressive size as its continent. India is well
positioned to become a digital force—if its leadership gears
itself up to play the digital game, where the disruption is
not only technological, but also cultural. �


project management
ANEES HAIDARY
IS SENIOR MANAGER, BUSINESS
EXCELLENCE, AT SASKEN.
leveraging diversity
As organisations embrace greater cultural diversity in the workplace and employees are
increasingly required to work in teams, the impact of diversity on team effectiveness has
clear implications for business.1
An intercultural work environment could lead to conflicts that can adversely
affect project outcomes. One of the ways this can be avoided is by developing an
integrated culture.
here have been numerous studies on the on national culture. His research was based on employees
T influence of individual cultures on the

performance of project teams and the success
of these projects. But the influence of varied
cultures on the outcome and success of projects is less
studied. An inter-cultural interaction model will enable
of IBM. He conducted an initial study of the company’s
employees in the 1960s and continued it for thirty years.
Today, this survey covers over 72 countries, and over
116,000 respondents from IBM.2
Hofstede identified culture to be a mental
project managers to manage different dimensions of programming of the mind. Every person carries within
culture within the team and take appropriate decisions and him/her patterns of thinking, feeling, and potential
actions for better results. acting, which were learned throughout their lifetime.3 He
identified three layers of mental programming—individual,
Geert Hofstede’s cultural dimensions collective, and universal—based on which he constructed
Geert Hofstede is for many the most well-known theorist his ‘Culture Triangle’.

These relative scores have been proven to be quite
stable over the decades. The forces that cause cultures
to shift tend to be global or continent-wide. This means
that they affect many countries at the same time so that if
Individual their cultures shift, they shift together, and their relative
positions remain the same.
Collective Country PDI IDV MAS UAI

Mexico 81 30 69
China 80 20 66 40
Universal UAE 80 38 52
India 77 48 56 40
Singapore 74 20 48 8
Figure 1: Hofstede’s Culture Triangle 4 France 68 71 43
South Korea 60 18 39 85
The individual level (personality) is focused on the
Japan 54 46 95 92
mental programming exclusive to each person. Hofstede
United States 40 91 62 46
suggests that this level is at least partly inherited. The
collective level (culture) is focused on the mental Germany 35 67 66 65
programming that is learnt from others, that is specific to UK 35 89 66 35
a group of people. The universal level (human nature) is Finland 33 63 26
focused on all humans, and is likely inherited.
Sweden 31 71 5 29
Hofstede’s study consisted of the Values Survey Model
(VSM), a collection of 33 questions designed to classify Table 1: Hofstede’s country-specific scores
members of national groups into cultural dimensions. on the cultural dimensions
He initially found that four distinct dimensions could be
ascertained from the survey results. 2, 5, 6 PDI: India scores high(77) on PDI, indicating an
appreciation for hierarchy and a top-down structure in
� individualism vs collectivism (IDV)—the degree to society and organizations.
which individuals are integrated into groups IDV: The country, with a score of 48, is a society with clear
� power distance (PDI)—the degree of centralization of collectivistic traits.
authority
� uncertainty avoidance (UAI)—a society’s tolerance
for uncertainty and ambiguity The collective level
� masculinity vs femininity (MAS)—the distribution of (culture) is focused
emotional roles between the genders on the mental
programming that is
Let us look at Hofstede’s country-specific scores on the learnt from others,
cultural dimensions (refer Table 1). 7 These are relative, ie,
that is specific to a
societies are compared to other societies.
group of people.

leveraging diversity H a i d a r y
Global software Collaborative

& Knowledge-
development is sharing Tools
not just a technical
process of building
software or Manage Conflicts
Deploying Global
Policies
information systems Intercultural
but also a social Integration
process.
Intercultural
Keep them
MAS: It scores 56 on this dimension and is thus considered Awareness
involved
Programs
a masculine society.
UAI: India scores 40 on this dimension and hence has a
medium-low preference for avoiding uncertainty. Figure 2: model for improving intercultural
Having said this, an attempt is made to create a model integration in globally distributed projects
for integration of a common culture in a multicultural � collaboration and knowledge-sharing tools
work environment. It has been identified by many researchers that
coordination and communication problems do exist
the model in such a distributed work environment. One of
Global software development is not just a technical the methods advocated by researchers is to have an
process of building software or information systems but IT platform that provides the glue for information
also a social process involving stakeholders from multiple sharing and communication across the distributed sites.
organizational units. Culture plays a major role in the However, having a common platform across different
effectiveness of such global teams. The problem is more geographies is a difficult task. Each work group may
profound, especially for Indian companies that acquire use different tools and platforms. From a technical
or work with foreign entities. Figure 2 outlines some of perspective, the integration of multiple software parts
the possible ways to better integrate diverse cultures needs to be well coordinated through mechanisms
within organizations. for document sharing, reviews, communication,
discussions, and assigning and tracking activities
and actions. Such platforms, while improving
communication and coordination, can also help bring
down cultural barriers. Some examples are:8
� audio and video conferencing: Wengo, Skype, Gizmo,
Sipgate (uses H.320, H.323, SIP, H.264, others)
� instant messaging: IRQ, ICQ, AIM, Jabber, Lotus
Sametime connect, Slack
� multi-user editors, whiteboards, version control:
Google Docs, Zoho, MediaWiki, ACE, SVN, Rational
Portfolio Manager
� forum discussions: Yammer or Facebook @ Work

Some of the organizations using these tools are IBM better cross-cultural collaboration, but there tends to
(Lotus Sametime, Skype, Rational Portfolio Manager), be no structured opportunity in which this experience
Sasken (Microsoft Sharepoint, Skype for business, Slack), can be reflected upon and shared with colleagues
Accenture (Yammer), and Capgemini (Yammer), among in a formal way. Informal sharing of experience is
others. These organizations have presence across the essential. It assumes importance in the absence of
globe and collaboration is a great need to solve business structured interventions. For example, cross-cultural
problems. Hence, these tools are effective in managing meets, knowledge-sharing sessions across geographies,
cross-cultural challenges. multicultural awareness trainings, frequent interaction
with colleagues working across geographies to take
� deploying global policies guidance on culture specific requirements, etc.
Organizational policies need to be written in such a
way that they meet the company’s vision and objectives. At Sasken, there are e-learnings designed to make
Policies/processes must be global as well as cater to employees aware of cross-cultural issues. Common
country-specific requirements (legal, HR specific, tools—developed in-house—for project management based
medical, etc.). For example, holidays in Europe, on Redmine platform help project managers to handle
paternal leave, contractual conditions especially in projects effectively by connecting employees across India
China, etc. Policies should integrate the different sites (Bengaluru, Chennai, Pune, and Hyderabad), the US,
and their geographical requirements, thereby also Finland, and China.
satisfying the organization’s business and employees’
needs. In organizations such as IBM, Wipro, Infosys,
Sasken, and Accenture, global policies are deployed to
take care of common and specific regulatory business
requirements.
Systematic,
� intercultural awareness programs
on-the-job cross-
cultural training is
Systematic, on-the-job cross-cultural training is less
less common in
common in our experience. Employees involved in
our experience.
cross-cultural relationships learn ways to achieve

leveraging diversity H a i d a r y
The top ten organizations promoting global diversity array of skills. Disagreements on projects often arise
including cross-cultural mentoring are IBM, Accenture, when project pressures increase, personalities clash,
EY, Dell, Sodexo, Wyndham Worldwide, Procter & or when personal goals collide. This is intensified in a
Gamble, Deloitte, Caterpillar, and MasterCard.9 multicultural team by the different value systems of
the team.
� keep them involved Crawley (1992) describes constructive conflict
In a multicultural environment, it is a challenge to management techniques in various situations.10
have an integrated work environment. However, with However, his approach in a multicultural team situation
a small change in the methodology adopted to cater to can be summarized as follows:
such needs, a significant change can be brought into
� Remain neutral, and use an impartial, third-party
work practices and environment. This will bring in
approach
efficiency and motivation to contribute better to project
� Verify your understanding of each of the viewpoints
objectives. These are:
� Work with the team members to establish options for
� Providing more responsibilities and authority to resolution of the conflict
execute work � Agree to the course of action
� Providing flexibility to adopt work practices/routine
There are significant competitive advantages that can
through which they can operate comfortably in their
be gained by efficient cross-cultural project management.
respective geographies and give importance to their
A multicultural project group has a much broader range
cultural practices
of knowledge, skills, abilities, and experiences because
� Involving them in key decisions or granting decision- of different cultural frameworks, and is therefore better
making power wherever possible equipped to solve problems and make decisions. �
� Incorporating them in executive councils
� manage conflict
Different cultures react differently to conflicts and
thus the manager of a multicultural team requires an
01 https://www2.deloitte.com/au/en/pages/human-capital/articles/working-
multicultural-teams.html
02 Geert Hofstede (2001), “Culture’s Consequences: Comparing Values,
Behaviors, Institutions, and Organizations Across Nations”, second edi-
tion, or Geert Hofstede, Gert Jan Hofstede and Michael Minkov (2010),
“Cultures and Organizations: Software of the Mind”, third edition.
03 Hofstede 2005, p4
04 Hofstede 2005, p5
05 Hofstede, G. (1991). Cultures and Organizations: Software of the Mind:
Intercultural Cooperation and its Importance for Survival, McGraw Hill,
New York.
06 Hofstede, G. (1983). Cultural Dimensions for Project Management, But-
terworth & Co (Publishers) Ltd. 1 (1).
07 Hofstede’s country specific scores on the Cultural dimensions <https://
geert-hofstede.com/countries.html>
08 ITU-T (March 2008). Remote Collaboration Tools, ITU-T Technology
Watch Report #5, March 2008. Retrieved from < www.itu.int/ITU-T/tech-
watch>
09 DiversityInc, <http://www.diversityinc.com/top-10-companies-global-
diversity/?cm_mc_uid=53022601755514805871350&cm_mc_
sid_50200000=1480587135>
10 Crawley, John, 1992. Constructive Conflict Management: Managing to
Make a Difference. Nicholas Brealey Publishing, London.


change tracksstrategy
harsora
HARDIK HARSORA
IS CO-FOUNDER OF
EFFEX BUSINESS SOLUTIONS.
change tracks
The Ministry of Science and Technology announced it will be investing $749,500 over
the next few years…Under a new program, Promoting and Accelerating Young and
Aspiring Innovators and Startups (PRAYAS), the Ministry will be providing grants of
up to $149,900 to each startup to encourage innovators.* However, free flow of funds
alone does not ensure success. Indian startups and SMEs have to bring about radical
improvement in costs, quality, service, and other critical avenues to stay ahead of
the curve.
T
imes have not been better for Indian startups sector. MSMEs and startups are touted to spur jobs,
and MSMEs. Volatile policies in foreign lands, entrepreneurship, innovation, and disposable income.
government initiatives to propel growth, and However, the picture is not all rosy. Over 40% startups
an ambitious young generation spell good have failed since 2014, according to startup tracker Xeler8.
times ahead for these sectors. Reduction in The average age of these ventures is just over eleven
corporate tax and soon-to-be implemented GST will add months. Kishore Biyani stated that 90% startups he has
to the optimism. India is also poised to become a $5 trillion seen have no meaning. Kris Gopalakrishnan observed that
economy by 2025, for which the backbone is the MSME around 70% startups will fail and 20% will remain as small

enterprises—far from promising numbers for a country of any technology used in a business is that automation
which boasts the highest youth demographic in the world. applied to an efficient operation will magnify
So, where are startups and MSMEs going wrong? the efficiency. The second is that automation applied
We can attribute their failure to many factors. However, to an inefficient operation will magnify the
the Pareto Principle can be applied here too. Almost 80% inefficiency.” The Propel Excellence Method is effective
failures occur due to 20% reasons. because it introduces automation after it makes a
The gravest error is business modeling, or the lack of business efficient.
it. Businesses try adopting ideas from the West without
understanding what their customers want. Or they fall Here is how PEM helps organizations grow by design and
hook, line, and sinker for motivational speakers who not chance:
dish out mountains of wisdom, but skip out on steps to
implement those. This absence of a business model also growth planning
causes startups to burn cash fast. Eventually, funds dry up For companies to scale by design, planning growth is
sooner than anticipated, resulting in failure, according to mandatory. Growth is not about funding or employee
Rishabh Lawania, founder of Xeler8. strength, but revenue and profitability. It does not matter
What can be done to develop effective business models? how much a company raises through funding. Without a
How can startups and MSMEs grow larger by design, with compelling growth plan, it exhausts its cash flow fast and
owners guiding them skillfully like Captain Spock? eventually folds up.
Growth planning involves evaluating a business’
the propel excellence method offerings. Those who implement the PEM in growth
This method for fundamental rethinking addresses the planning have an astute understanding of why their
most important components of a business: customers buy from them. They also track metrics like cost
of acquisition, cost of value delivered, and market size. As a
01 growth planning result, they set realistic prices which their audience accepts
02 problem solving and which maintain their profitability.
03 performance management
problem solving
It empowers them to set long-term goals and keep their Most organizations tackle problems based on their present
short-term strategies in line with these. Here are three circumstances. But this method is highly ineffective
reasons why PEM is popular among organizations which since it just sweeps those problems under the carpet
want to scale up: until they reappear.
01 It enables businesses to retain their competitive edge.

It helps them resolve glaring gaps in their business,
people, processes, infrastructure, and measurement.
Thus, it saves them from being swept away
by competition.
Businesses try
02 It enables businesses to function without the everyday
adopting ideas from
involvement of promoters and the senior management. the West without
Thus the C-suite gets space and time to focus on understanding what their
larger goals. customers want.
03 It increases efficiency. Bill Gates said, “The first rule

change tracks H a r s o r a
Performance management is the process of creating

Through the a culture in which people do not develop a product or
PEM, businesses service directly. Instead, they contribute to a system which
can set up a system develops it. The system is simple enough for a person with
to define a role minimum required skills to contribute to it and achieve the
and measure its desired outcome. It also drives individual performance in
effectiveness to the right direction, ie, one which is aligned with the needs
align it with of the organization. If performance does not move in that
organizational goals. direction, the system raises a red flag. To a large extent, this
is how the PEM streamlines performance management.
These red flags are then addressed and remediated using
PEM, on the other hand, provides tested and proven the problem-solving techniques mentioned in point 2.
techniques. It first accurately defines the root cause of a A business contacted us and stated that one of their key
problem instead of skimming the surface. Next, it dives employees had quit unexpectedly. Upon investigation, we
deeper to identify influencing factors and gaps—whether realized the employee was successful because he was selling
in people, performance, infrastructure, management, or all only one of the many products in the portfolio. From being
of them. This saves businesses from wasting precious time a super performer, the employee became a non-performer
and resources on addressing frustrating problems which when the product lost its demand and manufacturing
arise repeatedly. Instead, they channelize those resources stopped. We developed a robust scorecard that motivated
towards business growth. the employees to deliver on all products equally to make
One of our clients wanted the CRM software to be incentives. This made sure no employee depends on the
able to provide answers to the customers calling to know sale of one product to become a star and move in the
the status of their orders. By deploying PEM we realized, opposite direction with his/her performance when things
that a CRM would not solve their problem. Inefficiency go south with that product line. Now, they can hire quality
existed in the time it took from receiving an order to candidates on short notice, and bring out the best in their
dispatching it and that was the reason why customers kept employees.
calling. Deploying a CRM would have simply helped The time is right for Indian businesses to be on
manage the problem better but not address it. We addressed par with global ones. They can turn their unique areas
the inefficiencies in the system. The result was an instant of expertise into advantages by deploying the Propel
improvement in the organization’s logistics and the calls to Excellence Method. They can pivot swiftly when needed
our client reduced to zero. and innovate quickly, which in turn will keep them ahead
of competition.
performance management All they need is to empower their people to trust a system.
The significance of people in an organization cannot This will help them develop irresistible business offerings
be understated. Most business executives and advisors and turn their businesses into global superpowers. �
consider performance management as another term for a
traditional appraisal system. But it is much more.
Through the PEM, businesses can set up a system
to define a role and measure its effectiveness to align it
with organizational goals. This is done through a
scorecard which gives each role a clear idea about * https://www.forbes.com/sites/suparnadutt/2016/09/13/indias-startup-eco-
their goals. system-scales-up-with-widespread-government-initiatives/#5d7c646a5f35


innovation happens elsewhere Yu, H a a n a e s , a n d innovation
Narayanan
HOWARD H YU KNUT HAANAES JAYANTH NARAYANAN

IS PROFESSOR, IS PROFESSOR, STRATEGY IS PROFESSOR,
STRATEGIC MANAGEMENT AND INTERNATIONAL ORGANIZATIONAL BEHAVIOR
AND INNOVATION, AT IMD. MANAGEMENT, AT IMD. AND LEADERSHIP, AT IMD.
innovation happens
elsewhere: rethinking your
business to grow and compete
Around 70 executives recently took part in a highly participative IMD Discovery Event
to understand the concept of open innovation that is currently democratizing invention
and product development, by opening them to the masses and creating more choice for
consumers than ever before. Businesses that fail to embrace open innovation run the risk
of being left behind.
O
pen innovation is a way to stay on top of pride—“we know our customers best.” Today, companies
the competition, reduce costs, spread risks, have to admit, “we don’t know everything.” Historically,
and bring new products to the market more LEGO depended on its marketers to make big bets on the
quickly. It takes place in two ways: by tapping products of the future, but in 2008 it changed its approach
into the creativity and brainpower of many through and launched LEGO Ideas, a crowdsourcing site on which
crowdsourcing, and by opening up a company’s internal anyone could submit suggestions. Fans then voted and
ideas to the external community. For traditional companies, LEGO produced limited editions of the best and most
the biggest barrier to embracing the external community is popular concepts with great success.

� Giving registered participants access to META,
Often confidentiality is DARPA’s library of digitally rendered vehicle
cited as a major barrier components and mechanical parts.
to open innovation, but � Making design and simulation software available so that
it does not have to be. components could be manipulated to create new parts.
Collaboration tools allowed team members to work
together virtually on a shared design. The participants
received feedback on their design, which they could
resubmit.
� Offering a cash prize of $4 million. Intrinsic motivation
Often confidentiality is cited as a major barrier to stemmed from a sense of contributing to nation
open innovation, but it does not have to be. DARPA (the building, making an impact, prestige, and recognition.
US Defense Advanced Research Projects Agency)—
responsible for developing emerging technologies for the The above example raises a number of questions for
military—wanted to make a new amphibious infantry managers: How are their companies positioned in terms of
vehicle from conception to manufacture in one-fifth of innovation? Where do they need to be? Are they willing to
the typical timeframe. So in 2013, it issued a challenge make basic investments to seed innovation in novel ways?
to all Americans to build FANG—Fast, Adaptive, Next- How can internal employees as well as external partners be
Generation Ground Vehicle. How did DARPA effectively motivated?
leverage non-experts to contribute meaningfully to a highly
technical military challenge? It lowered the barriers to a time for deconstruction
participation and democratized innovation by: Five out of the top six companies by market capitalization
� Clearly spelling out the objectives and the in 2016 were tech companies: Apple, Alphabet (Google’s
specifications. parent), Amazon, Microsoft, and Facebook; Exxon Mobil
� Allowing people to work autonomously or to form was the only non-tech company. Given the explosive
teams. growth of highly innovative, networked businesses,
� Dividing a complex problem into sub-systems. The Professor Haanaes deconstructed company types, from
vehicle was designed through three competitions for (1) traditional manufacturers to network orchestrators,
mobility and drivetrain; (2) chassis and structure; and through the lens of business models to understand how
(3) the whole vehicle. value is created.

innovation happens elsewhere Yu, H a a n a e s , a n d N a r a y a n a n
Business model Structure Value created
Manufacturing Transformation of products
Problem solving Solving unique problems
Service management Insourcing of precesses
Network services Connection customers
� manufacturing: No longer the most important part � problem solving: This is the business of having
of many economies, manufacturing as a proportion of competences that are of huge value to a customer who
GDP is in decline globally, driven by the shift from a has to solve unique problems, as provided by doctors,
traditional machine age economy to a more service- architects, or lawyers, for example. It is characterized
intensive information age economy. The question for by information asymmetry, high stake irreversible
asset builders is how to sell more than just the product. solutions, and a large variation in outcomes. In contrast
Many manufacturers, particularly in the business-to- to manufacturing, the value of solving a problem
business (B2B) segment, are moving to capture value is independent of the cost of solving it. Therefore,
by providing solutions. For example, General Electric reputation is critical. But digitization is changing the
is going from selling aircraft engines to selling usage, nature of problem solving, partly in terms of efficiency
or “power by the hour.” The manufacturing business and partly because other business models can do the
model, typically built around value chains, is becoming same.
much more collaborative and agile in the quest to
become innovative. � service management: Thirty years ago a company did
everything itself. That has changed with the practice of
insourcing, i e bringing in a service. Insourcers grow
by building scale. They try to find many customers
Digitization is changing
the nature of problem with exactly the same needs so they can standardize
solving, partly in terms the service. Customization in insourcing is expensive
of efficiency and because it creates complexity. Digitization is making
partly because other the service management business model more efficient.
business models can For instance, when IBM realized that its services were
do the same. becoming commoditized, it started transforming to
become an analytics company.

� network services: A unique characteristic of a All these factors have led to the emergence of
network is that every new member (of the right type) networked platforms, especially in the B2C domain, across
increases the value for all; the wrong members destroy different verticals and at an unprecedented scale, resulting
value and have to be subsidized by the rest. This in the professionalization of diverse fragmented industries.
business model is about selecting the right members Whereas startups with networked business models are
and growing their numbers, thus creating additional forging ahead, traditional companies have responded with
value at lower cost. Networks thrive in layers and the the typical excuses: “This is not our core business,” “We
value increases when different networks link up, for don’t have the capabilities,” or “We cannot spend this kind
example, travel, payment, logistics, etc. Networks strive of cash.” Instead, the discussion needs to revolve around
to build stickiness to prevent customer volatility. Since the strategic choices and consequences. Should we develop
networks still need an asset builder, the question for new capabilities in-house or should we build partnerships?
manufacturing companies is how to create their own Or should we outsource entirely?
networks with suppliers, partners, and customers.
There are not many B2B networks and huge battles will an alternative organizational design to support
be fought in the B2B space. innovation
As technology and the nature of the workforce continue
Delving deeper into new knowledge-intensive networked to evolve, organization design scholars are grappling with
business models, Professor Yu questioned whether the rise an outlier in terms of organizational design—a hierarchy-
of companies such as Uber, Facebook, Alibaba, and Airbnb less organization without bosses, more frequently seen
is a fundamental shift or a fad. Can businesses afford to in innovative companies. Professor Narayanan argues
ignore these trends? that this kind of organization has existed since prehistoric
The key enablers that helped propel these types of times when hunter-gatherer communities had a two-
companies include escalating computing power, mobile layered structure comprising a tribe head, chosen based
technology, smartphone penetration, plummeting prices, on hunting skills, and the rest of the community. The
and enhanced connectivity—human-to-human, human- next evolutionary step came with agriculture, which
to-machine, and machine-to-machine—through different modified the way humans organized themselves. Thus
types of interfaces. There has always been a need for certain hierarchies came about. Hierarchy accomplishes task
services. What has changed is the expectations and behavior division, task allocation, motivation (rewards, monitoring),
of people—another vital enabler of the network effect. The and coordination (flow of information). But it also causes
notion of trust has also changed with the concept of user problems such as silos and red tape and, most importantly,
reviews and ratings. it separates decision makers from where the knowledge
resides. Are there credible alternatives to hierarchies?
Given that hierarchy can be a roadblock to creativity,
innovation is easier in a smaller company. Research has
As technology and shown that the number of people with whom one can
the nature of the maintain a meaningful relationship—whether in a hunter-
workforce continue to gatherer society or on Facebook—is 150, also known as the
evolve, organization Dunbar number. This means that humans will be most
design scholars are effective in organizations of around 150 that implicitly
grappling with an embed safety, trust, a shared purpose, and the ability to
outlier in terms of have an impact. At this size, there are fewer intermediaries
organizational design. and much innovation occurs serendipitously through

innovation happens elsewhere Yu, H a a n a e s , a n d N a r a y a n a n
informal conversations. In traditional companies, creative

outposts are often formed to enable innovation by highly
empowered talents. Organizations therefore need to strive
to facilitate the inclusion of hierarchy-less forms within the
overall organizational design (see Table 1).
Table 1: Traditional vs. boss-less: What can we

incorporate into our existing organization design?
Form of Traditional “Boss-less” takeaways

organization “hierarchical” firm firm As new forces of global competition—in the form of agile
Task division By managers By employees startups with innovative business models, technological
with the formal deciding which advances, and evolving regulation—are unleashed,
authority to set tasks are companies that depend on tried and tested structures
priorities important and strategies and set incremental targets based on past
Task allocation By managers Self-selection by performance are in real danger. Many traditional asset
with the formal employees builders and service providers are responding to these
authority to make competitive challenges by undertaking innovation in
staffing decisions different ways. A life sciences company might innovate
Reward Salaries, bonuses Compensation with a university, an FMCG company with key account
provision and promotions decisions based customers, while others collaborate with suppliers.
determined by on peer ranking DARPA, as we saw, extended the boundary of open
managers Emphasis on innovation to tap into the wisdom of individual inventors.
Emphasis on both intrinsic While partnering with high-tech players to seed innovation,
extrinsic incentives and extrinsic traditional companies have to retain the ability to capture
and monitoring motivators value, bearing in mind the following:
� Owning the customer interface is critical, particularly
Information Formal Lateral and
for B2B companies. Since they supply components
provision communication informal
along the value chain, traditionally they have tended
channels communication
not to focus much on the end customer. By embedding
controlled by channels
sensors into their products, for example, asset builders
managers
can bypass Amazon and have a direct channel to the
Enforcing By managers By employees customer.
solutions and based on formal based on � The terms of data ownership and data sharing in
resolving authority peer-to-peer partnerships should be clarified. The range of data
problems agreement and gathered can subsequently be used for different types of
informal authority analytics.
based on � Embrace technology to release resources to focus on
expertise, status, the customer experience, thus redefining the core value
etc. proposition.

innovation happens elsewhere Yu, Haanaes, a nd Narayanan
� Small and deep data based on human psychology � Explore options beyond partnering with the big players. It
and unarticulated needs can provide superior insights. might be more effective to acquire or work with smaller
For example, GE designed the adventure series of players such as startups or university offshoots that are
MRI scanners (Pirate Adventure, Coral City more agile and flexible with their business model.
Adventure) for children’s hospitals by placing industrial � Above all, keep abreast of the technology roadmap. �
design engineers in the hospital to live the journey
of the patient and understand the child’s psychology. Research associate, Ivy Buche and Editor Lindsay McTeague.
Reprinted with the permission of International Institute for Management
No big data analytics can provide this insight. The Development.
empathetic lens unleashes creativity. http://www.imd.org/
case study on the healthcare industry
An analysis of the healthcare industry sheds light on how hospital systems might reorganize if intelligent
machines become as ubiquitous as smartphones in the next five years.
With medical knowledge doubling every 3.5 years, finding new ways to make evidence-based decisions
has never been more critical. Watson™ is a powerful cognitive technology developed by IBM that processes
information more like a human than a computer, by understanding natural language, generating hypotheses
based on evidence, and learning along the way. In 2012, Memorial Sloan Kettering Cancer Center (MSKCC)
and IBM collaborated to develop a powerful tool—Watson for Oncology. It combined the computational power
of Watson with MSKCC’s decades of longitudinal data, clinical knowledge, molecular and genomic data, cancer
case histories, and the latest research to create an evidence-based decision support system for oncologists.
Watson for Oncology was launched in 2014 and free access was provided to hospitals worldwide. Participating
hospitals had a mandate to share their data fully, which would make the tool more intelligent.
Taking the US as an example, Watson for Oncology has great potential in the highly regulated healthcare
industry (a classic problem solver and an asset builder). There are three tiers of hospitals: Tier 1—world-class,
with top doctors; Tier 2—regional; and Tier 3—community, often with limited resources. Hospitals in each tier
have the opportunity to reconfigure their business model to compete better. For example, Watson for Oncology
could lead to a decoupling of diagnosis and treatment, which are typically vertically integrated and housed
under one roof. It is also possible to save on expensive doctors and invest in areas that have more impact for
cancer patients, such as nursing and after-treatment services.
By specializing in a disease class, a new provider could do the job—at scale, more efficiently, and at a lower
cost. Specialization involves streamlining the type of patient, changing the workflow, investing in specific
equipment, standardizing procedures, and becoming outcome driven.
Expertise and human intuition are expensive and time-consuming and the outcome is not predictable. The
codification of human knowledge to enable data-based decision making is the way forward. Watson for
Oncology has gained traction in countries such as Thailand, Malaysia, Korea, and India, many of which lack
oncologists and specialist centers. The problem-solving industry will eventually become a network, with the
ability to move data around as its fundamental gel. Although privacy concerns surrounding patient data will
need to be addressed by regulation and technology—such as blockchains and encryption—Watson for Oncology
is poised to change the architecture of healthcare.

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organizational health
RAHUL SHAH
IS HEAD, LEADERSHIP
SOLUTIONS GROUP AT DDI INDIA.
listening in a different way

Emotional-intelligence skills support collaboration, more open communication, more
transparency and less posturing, less ego, and more people working for the greater good
and for the purpose of the organization succeeding.*
Mindfulness forms an integral part of emotional intelligence which has become a key
leadership trait for navigating in today’s tumultuous business landscape.
isk, uncertainties, and disruption on one hand professional’s high performance. At the leadership level, it
R and stress, anxiety, and worry about the future

on the other, are giving sleepless nights to
business leaders who are operating in today’s
era of transformation. Hence, it is critical
for them to manage their emotions while they tread this
is not surprising to know that 15% of a leader’s success can
be attributed to IQ and technical skills while 85% is based
on EQ.
Being smart (IQ) is critical for taking the right business
decisions and making a compelling argument to get others
challenging path. on board with a direction, while keeping people on the
Research by Daniel Goleman, author of Emotional move and executing on that direction is mostly dependent
Intelligence: Why It Can Matter More Than IQ, suggests on EQ.
that mere 33% of job success is attained due to IQ and Constant exposure to stress, anxiety, and worry can
technical skills while EQ contributes as high as 66% to a make leaders impulsive, argumentative, arrogant, risk

averse, or avoidant. These and many other related derailers It is a state of active and open attention to the present.
can emotionally hijack leaders, leading to wrong decisions, When one is mindful, one observes thoughts and feelings
strained relationships, and a poor reputation in the from a distance, without judging them. Instead of letting
organization. life pass by, mindfulness helps one live in the moment and
The cause of emotional reactions has neurological be more perceptive to experience. This aids in effective
evidence. The neocortex and cortex are the rational listening, building clarity of thought, effective decision
portions of the human brain, responsible for a higher making, and strengthening relationships.
level of thinking, planning, decision-making, and problem
solving. The limbic portion, the emotional center, is the how to become more emotionally intelligent
storehouse of all the experiences since birth. It allows to Leaders can begin strengthening this partnership by
carry experiences forward to speed reactions to situations. focusing inward and creating a deliberate practice of being
For example, if you have been in an accident, the sound aware of the emotions they are experiencing. For every
of screeching brakes is stored in the limbic portion. When emotion, there is a physiological response. You feel angry
you hear it again, the brain instantly sends out a distress and your heart quickens. Getting familiar with these
signal, leading you to slam on your brakes or tightly grip physiological indicators will help leaders gauge emotions
the steering wheel. This part of the brain is always sending arising in a specific moment. Mindfulness increases
messages throughout the body. It can cause physical awareness of these physiological signals.
reactions such as stomach tightness, neck pain, flushed Research shows that people spend almost 47% of their
skin, sweating, a quivering voice, etc. waking hours thinking about something other than what
Data flows freely between the limbic and neocortex/ they are doing. Often you will notice that the body is in
cortex portions. As the limbic portion works faster than the the present but the mind is not. It is either regretting the
neocortex/cortex, it can take over rational thoughts. While past or getting worried about the ambiguous future. It is
difficult to be aware of the present and tap the resources.
Having recognized its importance, many organizations are
Neocortex and cortex
already investing in training employees on mindfulness.
Limbic brain Chade-Meng Tan has called this ‘high-resolution
perception’. Sharpened attention builds high-resolution
Autonomic brain perception into the cognitive and emotive processes. This
enables better observation of the thought stream and
processing of emotion with clarity, and the ability to do
so objectively from a third-person perspective. Thinking
this helps identify danger and trigger flight in hazardous

People spend almost
situations (to the physical being), it can also trigger similar
47% of their waking
reactions in other discomforting situations further leading
hours thinking about
to emotional hijacking. something other than
Emotional intelligence is a partnership between the what they are doing.
limbic and neocortex/cortex portions of the brain. It Often you will notice that
guides you so that you can fully execute your intentions the body is in the present
rather than have them hijacked. Mindfulness helps in but the mind is not.
strengthening this partnership.

listening in a different way S h a h
that lead to a negative emotional state. Be mindful of

Hot buttons or triggers. Internal chatter, also known as self-talk can
triggers can disturb take you away from the present. Tune into self-talk
the equilibrium of the that turns into either positive or negative voices which
mind and flood the can disturb your mindfulness—listen to the repetitive
brain with emotions patterns that influence your behavior. Adelle Lynn
which can diminish talks about positive and negative voices such as self-
effectiveness. doubt, optimism, perfectionism, panic/drama, revenge,
creativity, pleaser, victim, etc., in her book The EQ
difference.
about the past and future has important uses like learning � create new mental habits
and planning but comes at an emotional cost and can Appoint a self-coach who will provide guidance and
contribute to stress and feelings of being overwhelmed. wisdom, as and when required; constantly monitor
Here are some techniques to transform from ‘mindfull’ your actions, help you stay in the present, and alert
to ‘mindful’: you when the body is in the present but the mind is
not. To shift your attention to the present, focus on the
� attention training sensations on any part of your body. Do so until your
Avoid multitasking. Research has proven that the mind releases the chain of thoughts you are caught in.
human brain does not have the power to do multiple Reflect. Reflect. Reflect. Keep a journal to help
tasks; its capacity is reduced by 37% if a person engages recognize emotions in various situations. As you add
in more than one task at a time. So, when you realize to your journal and reflect on these emotions during
you are multitasking, stop yourself and focus on one meetings or interactions, you can improve your
task at a time. understanding of yourself. �
��enhance self-awareness
Hot buttons or triggers can disturb the equilibrium of
the mind and flood the brain with emotions which can
diminish effectiveness. Be aware of the environment, * https://www.fastcompany.com/3044157/inside-googles-insanely-popular-
personalities, events, words, phrases, or situations emotional-intelligence-course

illustration by nilesh juvalekar

gurumantra
MORGEN WITZEL
IS A MANAGEMENT HISTORIAN, AUTHOR OF 21 BOOKS,
AND A FELLOW OF THE CENTRE FOR LEADERSHIP STUDIES AT
THE UNIVERSITY OF EXETER BUSINESS SCHOOL.
taking the big leap

For most growing companies, there comes a time when they must contemplate
expanding outside their home market. Making the leap into foreign markets is, for most,
extremely challenging—sometimes the hardest thing they have done since the company
was founded. International expansion is a leap into the unknown, and not every
company manages to make the jump. Here are a few of the key problems they face, and
what to do about them.
J
ohn Dunning described two reasons why and labor if it is to continue to maintain its competitive
companies expand overseas. They are, he says, position, and looks at off-shoring.
either seeking new markets, or seeking new Dunning’s point is useful because it is important
resources. Perhaps the domestic market is saturated that the company is clear about its strategic reasons for
and there is little further room for growth, or expansion. During the 1990s, I watched many Western
competitive conditions are growing tougher and the companies expand into China, simply because it was there.
company decides to seek greener pastures elsewhere. Seduced by the myth of a billion new potential customers,
Alternatively, the company needs to find cheap resources companies went to China with no clear plan and no real

understanding of the barriers they faced. The same is true leadership team. That means those senior leaders must
of Western companies moving into India, and I am seeing have the requisite knowledge of the international business
much the same with Indian and Chinese companies trying environment.
to establish themselves in the West.
barriers to international expansion
key questions Even if all these questions have been asked and answered,
Before expansion, the board and senior leadership team formidable obstacles remain. It is easy to sit around a
need to sit down and ask themselves the following key boardroom table or on a strategy away-day and talk about
questions. expanding into international markets. It is much harder to
Why are we doing this? What is pushing the company do it.
towards international expansion? What is the imperative? Is The first and most obvious barriers are legal and
it market seeking, resource seeking, or some combination regulatory. What is the legal framework of the country in
of both? Is that imperative in line with the company’s own, which you will be operating? How strong is the rule of
already existing strategy? As above, expansion has to be law—does it exist at all? What are the prevailing attitudes to
for some strategic purpose, not just as the CEO’s vanity legal regulation, contracts, and the likes?
project. A common mistake is for companies to assume that the
What form will the expansion take? The answer same legal frameworks will exist wherever they travel to
depends in part on whether the company is resource do business. This is simply not the case. Different attitudes
seeking or market seeking, but there are some general to law and its purpose prevail across different geographies.
principles that are valid in either case. The company India, for example, is highly legalistic; it can take months to
has to consider whether it wants to partner with other sort out and negotiate the necessary contracts and licenses
organizations, or do it alone. It also has to consider scale; to do business. In China the same can be true; but if you
what proportion of resources will be committed to the have a well-connected local business partner to intercede
new venture, and whether this is commensurate with the for you, the path suddenly becomes smooth. This is
company’s own appetite for risk. not because of bribery or corruption, but rather because
Where will the company expand to? This is a Chinese business depends upon connections.
particularly vital decision. The company must expand China has a strong legal framework and good
to locations where market conditions are right and clear enforcement, but the Chinese attitude to contract law
opportunities exist. Unfortunately, getting accurate is significantly different from that of, say, the USA. In
information about these locations is not always easy. America, contracts are an essential part of business, and are
When will the expansion take place? There is a inviolate. In China, the contract is very much subordinate
tendency to rush into expansion, in the belief that to personal relationships. How strongly Chinese companies
opportunities may not come again. Sometimes that is
true, sometimes not. My experience of watching other
companies undertake international expansion suggests that
playing the long game is usually best. Sound planning and
A common mistake is
adequate preparation are necessary.
for companies to assume
Who will lead the expansion process? Sometimes, if the
that the same legal
company is merely undertaking a toe-in-the-water exercise, frameworks will exist
the expansion program can be delegated to relatively junior wherever they travel to
managers. Any large-scale expansion, however, must do business.
have the full commitment and participation of the senior

taking the big leap Wi t z e l
is for your firm if you lack knowledge of the destination

There are many country?
advantages to Coordinating and managing an organization across
learning the local national boundaries presents its own challenge. It can be
language... for one very difficult for headquarters in Chennai or London to
thing, information manage a subsidiary in Chongqing or Abu Dhabi. How
search becomes much autonomy should the local subsidiary be given?
much easier. Should it be free to adopt its own strategies, its own
marketing campaigns, its own labor policies? Or should it
conform to the rest of the company?
The biggest barrier of all, of course, is culture. The
keep to their contracts depends in large part on the strength most obvious manifestation of the cultural barrier is
of the relationships they have with their partners. language. There is a tendency among Western firms to
Other barriers include infrastructure, or its lack, think that it is not necessary to learn local languages;
and location. Once a country is chosen as a destination English is the lingua franca of the business world, and
for expansion, where then should the company locate? everyone speaks it. That is largely true, especially at senior
Most companies expanding overseas tend to gravitate levels (though it may be changing; I hear persistent rumors
towards cities where other foreign companies are already of Chinese companies insisting that negotiations on their
established: Mumbai, Shanghai, New York, London, home soil be conducted in Mandarin).
etc. But is that always the right decision? There can There are, however, many advantages to learning the
be advantages to going where the competition is not local language where your firm is doing business. For one
present—lower rents, cheaper labor, subsidies from thing, information search becomes much easier. Secondly,
local government, and so on. The barrier here is lack of contract negotiations are easier if you can read the contract
knowledge. How do you find out what the best location without needing to have it translated; many contracts have

gone wrong because of mistakes in translation, leaving the
two parties with quite different ideas of what is expected As human beings, we
of them. And thirdly, it is always useful to know what have many things in
people are saying about you behind your back, not just to common, but culture is
your face. one of the key things
Even when speaking English, the same phrase often that divide us.
means different things in different cultures. For example, if
a British business person says, “We must have lunch”, that
does not mean he or she is inviting you to lunch. The real
translation of this phrase is ‘I do not expect I will ever see
you again’. All cultures have these nuances, and they can
trip up the unwary. armed with a PowerPoint presentation that gave great
I mentioned above the cultural differences regarding detail on how they undertook their investigation and the
contracts. There is a host of others that come into play. steps by which they reached their conclusion. After a
American business people, for example, are often obsessive few minutes, one of the clients interrupted. Perhaps the
about time-keeping. If a conference call is scheduled for consultants could skip over the detail, and just come to
10:00 and you have not joined by 10:02, you are likely to the conclusions; what did they think was the solution to
get an email asking rather sharply where you are. Other the company’s problem. The consultants went into a brief
cultures are more relaxed, and delays of fifteen or twenty huddle, and then solemnly informed the client this was
minutes are seen as normal and acceptable. impossible; they needed to work through every step of the
As human beings, we have many things in common, presentation.
but culture is one of the key things that divide us. The They did not get the contract.
organization theorist Geert Hofstede once defined
culture as the ‘software of the mind’. We all have the same overcoming the barriers
hardware, in the form of our bodies and our brains, but The first and most important requirement for overcoming
how we think is conditioned by our upbringing, education, these barriers is knowledge and experience. If the senior
and peer groups. There are distinct differences between leadership team does not have personal knowledge of
Western and Eastern ways of thinking. One of the most the country or countries where they plan to expand, it is
important is the Western reliance on linear thinking, a cast very important that they recruit people who do before
of mind that goes back to René Descartes and, before him, embarking on the expansion journey. Local knowledge
to Plato. Westerners solve problems one step at a time, is vital.
believing that there is one best way to reach a desired end. The process of expansion itself requires people
In Eastern, Confucian-influenced thinking on the other with knowledge of how to manage issues such as legal
hand, there is a much more holistic attitude that takes all barriers and coordination over long distances and across
factors into account when making a decision, and is much boundaries. These things get easier with time—the first
more comfortable with notions such as paradox. Goal- expansion is usually the hardest. Even then, expansion into
seeking, rather than problem-solving, is the dominant very different cultures still carries potential shocks.
mindset. Both are important, and both have their uses. Also essential is having trustworthy local partners.
What we must always do is recognize the difference. Whether these are formal business partners engaged in
As an illustration of this, I once sat in on a meeting in a joint venture, or locally based advisers, consultants,
China when a team of American consultants were pitching lawyers, advertizing agencies, and so on; they need to be
for business to Chinese company. The consultants came people who can be relied upon to give good, accurate,

taking the big leap Wi t z e l
and timely advice. Finding these partners and developing today Volkswagen is still one of the best-known car brands
relationships with them is absolutely critical to success, in China.
and the company should be prepared to devote time and Expanding internationally is never easy, and there are
money to the process of seeking out partners and building plenty of pitfalls waiting to swallow up the unwary. The
relationships. Whatever the investment required is, it will keys to success are simple; gather requisite knowledge,
be money well spent. build strong relationships with local partners, and play the
There are examples of companies jumping feet long game. If a company can do all three of these things at
first into international expansion and making massive once, its chances of success will vastly improve. �
investments first time out—and everything working well.
There are other examples, many of them, of colossal
failure. Schwinn, the American bicycle maker, went into
an off-shoring project with no previous experience of
international markets, and ended up bankrupt. A better
example to follow is that of Volkswagen, which invested in STATEMENT OF OWNERSHIP FORM IV
[See rule 8]
China soon after economic reforms began and built up its 1 Place of publication: Mumbai
business slowly, developing relationships along the way. It
2 Periodicity of its publication: Bimonthly
took thirteen years for Shanghai Volkswagen to repatriate
3 Printers name: Mukund Beriwala
profits to the parent company. But the reward was a huge Whether citizen of India: Yes
Address: DGP House, 88 C Old Prabhadevi Road, Mumbai 400 025
share of the rapidly growing Chinese car market, and
4 Publishers name: Mukund Beriwala
Whether citizen of India: Yes
Address: DGP House, 88 C Old Prabhadevi Road, Mumbai 400 025
5 Editors name: Mukund Beriwala
Whether citizen of India:Yes
The company should Address: DGP House, 88 C Old Prabhadevi Road, Mumbai 400 025
be prepared to devote 6 Names and addresses of individuals who own the newspaper and partners or shareholders
holding more than one percent of the total capital: The Smart Manager Media Pvt Ltd, DGP House,
time and money to 88 C Old Prabhadevi Road, Mumbai 400 025
I, Mukund Beriwala, hereby declare that the particulars given above are true to the best of my
the process of seeking knowledge and belief.
out local partners and (Sd) Mukund Beriwala
building relationships. Dated March 2017

BOOK EXTRACTS
the mosaic principle: the six dimensions
of a successful life and career
by nick lovegrove
the smart city transformations: the

revolution of the 21st century
by amitabh satyam and igor calzada
are you a tiger, a cat or a dinosaur?

100 questions: how competitiveness
influences your life
by stephane garelli

reading room
the mosaic principle: the six

dimensions of a successful life
and career
by nick lovegrove
he answer is to make change our Inside, the already substantial and
T friend. The answer is to have

broad access to information and
information technology, to have broad-based
beautifully appointed house has been
extended by a huge marquee that
envelops most of the backyard. It’s a
systems of education and healthcare and cold night, but the rented marquee
family supports in every country, and to try seems to come with more than
to shape the global economy. adequate built-in heating. So guests
—President Bill Clinton, 1999 are able to shed their heavy winter
coats and mingle in search of people
Potomac, Maryland—Saturday, they know. This is no trivial task,
December 12, 2015 because at last count the guest list has
The cars begin to arrive in the risen above 750 people.
early evening, lights piercing the mid- And not just any old 750. I
December gloom. A small army of turn to my right and there is John
valets springs into action, shepherding Roberts, chief justice of the Supreme
cars toward their appointed Court—and nearby are a couple of his
destinations in neighboring fields associate justices. Around the corner,
and yards. A couple of police cars I almost bump into Wolf Blitzer,
stand watch at the end of the road, CNN’s redoubtable anchor—then
although it’s unclear whether they various other journalists heave into
are there to provide security, to act as view. In the corner, several members
a deterrent against excess revelry, or of Congress are huddled together,
simply because they are curious to see deep in discussion. Some of them are
what’s going on. Despite everybody’s instantly recognizable, some of them
best efforts, by 7:30 p.m. there is a not. And then clustered in the kitchen
substantial traffic jam along this quiet, is a group of teenagers—children of
Nick Lovegrove prosperous neighborhood street in our hosts and their friends.
the Maryland suburbs of Washington, It is easy to parody this event
Hachette India
2017, R499, 352 pgs, Paperback DC— the more remarkable because it as a scene out of This Town, Mark
is a Saturday evening. Leibovitch’s satirical take on the

insularity and chumminess of companies listed on the New York His campaign proposition had
political Washington—which he calls Stock Exchange before he was forty strong echoes of Mitt Romney’s
“America’s gilded capital.” That is, years old. He has shown a flair for pitch for the presidency, albeit from
until you ask the obvious question, finding underserved segments of the the other side of the political aisle: “I
“How do you know John and financial services market. In 1993, understand how to create jobs and
April?”—referring to our hosts for the he cofounded Health Care Financial the needs of small businesses—and
evening. Then you get a sense of the Partners, to make loans available to small businesses are the job creation
breadth and range of their networks. smaller health-care service providers engine.” And in another echo of the
John Roberts is there because he and ignored by larger banks. Then in presidential campaign that year, his
Delaney met through their respective 2000 he cofounded CapitalSource, a opponent accused him of “loaning
kids’ school; others because they commercial lender aimed at funding money to unscrupulous companies
have worked on nonprofit initiatives small and medium-size enterprises. and gouging businesses with
with April; several because they are In addition to his companies, he exorbitant interest rates.”
business partners and counterparts; founded Blueprint Maryland, a non- In April 2012 Delaney pulled
almost all because they have known profit group that aims to create jobs in off a stunningly large victory in
both of their hosts as friends, the state. the Democratic primary, beating
neighbors, and colleagues for a long Delaney had always been Garagiola by 54 to 29 percent; and
time in a variety of settings. involved in politics—most recently in November he beat ten-term
John and April Delaney are almost as a Democratic fund-raiser and Republican congressional incumbent
embarrassed that their annual holiday supporter. But in 2012, he decided Roscoe Bartlett by 59 to 38 percent.
party has grown to this size. “This just to take a step further and run for When he took the congressional oath
started as a few of our close friends Congress—specifically for the in January 2013, he became the only
fifteen years ago—and now look at Sixth District of Maryland whose former CEO of a publicly traded
it,” says April. “It seems like we add southernmost boundaries almost, company to serve in the 113th
a hundred people to the guest list but not quite, coincide with this US Congress.
every year.” But they acknowledge street in Potomac. Although the Delaney is adamant that he did
that as their professional context has previously Republican district had not assemble his network for political
changed in recent years, the scale and recently been redrawn by the state purposes. “I really never thought
scope of their networks have come in senate to give the Democrats a that I would run for office until
more than handy. And their guests are better chance of winning, the over- 2011. When I made the decision, it
equally happy to be there—and would whelming favorite was incumbent was great to be able to draw upon
be worried if the annual invitation state senator Robert J. Garagiola. such a wide circle of friends—not
failed somehow to arrive. That’s when Delaney drew upon his least because so many of them have
John Delaney trained as a lawyer, by now prodigious network—for experiences and insights upon which
but he has spent most of his career fund-raising, endorsements, and on- I could draw. But in many respects, it
as a businessman, founding two the-ground volunteers. was just a coincidence—these are just
the people I have got- ten to know
during 25 years of living and working
around here.” �
Delaney had always been involved in politics—most
recently as a Democratic fund-raiser and supporter.
But in 2012, he decided to take a step further and Excerpted with permission from The Mosaic
run for Congress. Principle by Nick Lovegrove, published by
Hachette India.

reading room
the smart city transformations:

the revolution of the 21st century
by amitabh satyam and igor calzada
C
anada and Australia are Which ones of these world’s places
frequently rated as the are Smart? Great roads, nice office
best places to live in. buildings, beautiful residences? Do
Similarly, Paris and Hong Kong are these good things add up to Smart?
consistently in the top ten cities No.
ranked by global tourists. So are
Bangkok and Singapore. Beijing has smart is different from great
seen an amazing transformation in The great modern cities of today have
the last two decades and now has a managed the population growth and
cutting-edge and contemporary look. geographic expansion better than the
London has a fantastic local travel not-so-great cities. They have also
infrastructure. maintained the history and traditions,
Mexico City looks amazing but in addition to ensuring adequate access
has a high crime rate in parts. Jakarta’s to food, water, transport and health.
main business district has one of the Like we discussed, Smart is about
best malls in the world but is quite getting more for less, and about
crowded and dirty just a little away. harmonising life, work, culture, and
Mumbai supports the livelihood of 20 nature. Based on these concepts,
million people, but more than half of many of the great cities may actually
them are living in slums. be Smart, however, we need to find
Boasting of historical structures, another scale and another set of
Europe sets several cultural standards metrics to measure Smart. Metrics
for others to follow. But now, many for Smart are different from those
European cities have become crime- measuring great. In addition, tourists’
infested and are unsafe to live. view, city administrators’ view, and
Religious conflicts are also on the the citizens’ views are not likely to
rise. Dubai looks amazing and has be same, as they are all looking for
the world’s best malls, but some different aspects of the city and hence,
say it lacks intellectual capital and a have a different set of parameters to
cultural identity. India is a country of work with.
Amitabh Satyam and Igor Calzada ruins of old structures destroyed by These great cities may be grand,
the invaders, however, the villages historic, clean and awesome. We will
Bloomsbury
2017, R499, 322 pgs, Paperback are nice and green. The USA is nice have to assess them differently for a
everywhere, but crime levels are scary. Smart quotient.

how to create a smart living often trivialise the foundation of the government must pre-empt such a
Smart is a relative term. So, when we Smart concept. decay of the city. We discussed this in
talk about developing a new city that In Chapter 3, we discussed the the earlier chapter.
is Smart, or about adding a Smart drivers of the Smart movement Many countries end up spending
feature, or changing an existing relating to environment and quality a disproportionate amount of money
feature to something smarter, we talk of life. We will talk about basic in transporting and cleaning water.
in terms of a degree. Smart ideas and expectations from a Smart city in About 80 per cent of illnesses in poor
solutions keep evolving and keep the this chapter. countries are caused by poor water
bar moving higher all the time. quality.
Most countries have programmes These are five broad features that all Clean water and clean air are
to transform urban living. India is Smart cities must aspire for. They are: fundamental rights in the Smart world.
developing 100 smart cities. Europe, 01 Enhance and extend life—relates
Japan, and China are at the forefront to the sustainability of life. enhance and extend life—healthcare
of this urban transformation. Some 02 Access to services—conveniences Good health means long and
new cities are being developed with and productivity. comfortable life with no or little
Smart concepts, whereas some existing 03 Affordability—average citizens physical discomfort.
ones are going through many mini- should be able to afford the Smart Health management and delivery
transformations. Transportation, solutions of the Smart city. of health services to citizens operate
schools, government, hospitals, police 04 Availability of Information— on several financial models. In some
and malls—everything under the sun transparency of process, efficiency countries, the government sets up
is under consideration. in decision making. health management centres using
Smart is becoming a movement. 05 Anticipate future—intelligence the money collected from taxes,
Universities have departments and all around to help individuals, and citizens avail these services for
courses. Technology organisations businesses as well as the free or at a nominal cost. If private
have new divisions to focus on community administration companies run the health facilities,
Smart. Governments are setting make quick decisions, either then the government fully or partially
up departments to drive the Smart automatically or with human reimburses the citizens or the health
initiatives. Citizens are demanding intervention. centres. Canada, Sweden and the
Smarter cities. UK are examples of a government-
Smart is also an overused term enhance and extend life driven healthcare system. In another
today—you may have observed air and water model, the government regulates the
practically every new feature in any A Smart city must ensure a breathable healthcare services run by private
device has a Smart prefix. Terms, such and healthy quality of air. Cities companies, as in the USA. Health
as Smart bed, Smart school, Smart TV, that make its citizens sick due to management organisations manage
Smart kitchen, and Smart dumbbells pollution are not Smart—a Smart city the services delivered through the
health centres. India has a dual system
where the government provides full
healthcare, but at the same time,
Smart is becoming a movement. Universities
private healthcare centres flourish as
have departments and courses. Technology
they are considered better. �
organisations have new divisions to focus
on Smart. Excerpted with permission from The Smart City
Transformations, published by Bloomsbury

reading room
are you a tiger, a cat or a

dinosaur? 100 questions: how
competitiveness influences your life
by stephane garelli
here are two ways to manage and Singapore often have a current-
T the competitiveness of an
economy. The first is to be
aggressive in international markets,
account balance of more than 12%
of their GDP and their prosperity is
based on international transactions.
which means either exporting or However, since the 1970s, a
investing abroad. The second implies new approach has emerged—that
being attractive essentially for foreign of attractiveness. An example is
investments. The obvious question: Ireland, which built its economic
Which is the better approach? development on its ability to attract
Historically, national large foreign companies such as
competitiveness has often been Intel, Apple and Hewlett-Packard.
assimilated with an aggressive The policy that was implemented
economic strategy. At the beginning combined both financial and fiscal
of my research in the 1980s, experts incentives (a corporate tax rate of
told me not to over-complicate 12.5%) with access to a young and
the subject because, ultimately, a skilled workforce. China adopted a
competitive nation exported. This similar approach with the creation of
was relatively true. All the great post- “special economic zones” structured
World War II economic successes— to attract foreign investors. One of
Germany, Japan and South Korea— the most famous examples is the
have been based on a capacity to region of Shenzhen near Hong Kong,
export. Today, these countries remain which has become one of the world’s
the world’s largest exporters. main electronics workshops. Dubai
The same can be said for smaller is another more recent example of a
countries. Their objective is to have country with an attractiveness policy.
a current-account balance surplus, The two approaches have different
i.e. a strong contribution of foreign outcomes. Aggressiveness creates
Stephane Garelli revenues to national wealth. This surpluses in trade balances; therefore,
is also a way to compensate for the it positively impacts national
SAGE Response
2017, R425, 232 pgs, Paperback limited size of a domestic market. revenue and generates foreign
For example, Switzerland, Norway currency reserves. On the other

reading room
hand, attractiveness creates jobs and word can only be the invention of such measures on US companies.
promotes the transfer of technology a lawyer... It gets complicated when these
and know-how. To make it simple, companies are international and
Dubai, for example, has extraterritoriality is when a nation have subsidiaries abroad. In law, the
established a policy by which a submits, willingly or not, to another subsidiary of a US company has the
foreign investor will be encouraged to nation’s jurisdiction. This is the nationality of the host country.
create a technical college or a training case for embassies or, historically, After the Soviet Union invasion
institute for its employees and its local foreign concessions in Shanghai in of Afghanistan in 1980, the United
suppliers. the 19th and early 20th centuries. States decreed embargo measures.
Obviously, the best combination In economics, extraterritoriality is I remember the manager of the
is to have both an attractive and increasingly a concern. Powerful French subsidiary of a large US
an aggressive economy. Some nations such as the United States supplier of pipeline components who
countries have succeeded: the US, are regularly tempted to impose was confronted with an impossible
Singapore, Great Britain, France and their economic legislations on other quandary. His US parent company
even Switzerland. Even so, most nations. demanded that he respect the
governments show more interest The US and Great Britain have embargo. The French government,
in attractiveness policies because laws forbidding trade relationships however, insisted that the subsidiary,
they lead to visible job creation. In with certain countries. In addition, legally French, should continue its
contrast, a surplus in the trade balance they also tend to demand that foreign relationship with Russia. Sometimes,
often remains an obscure concept for companies apply these restrictions, a manager must also be a canny
the majority of the people who do not or face retaliation. In the US, the diplomat...
understand how it will improve their “Trading with the Enemy Act” of In order to impose its law, the
lives. This explains why nations will 1917 was often used to this effect United States has a convincing
usually engage in a fierce competition even though, since 2008, it has only argument: access to the US market.
to attract a company that wants affected Cuba and North Korea. Recently a number of French
to invest in another country: Job It also makes it possible to impose banks were fined in the US for
creation and political ambitions are specific embargoes on products helping Cuba, Iran or Sudan bypass
the reasons... (notably arms) or on people (visas, sanctions. The same applies to the
bank transactions, etc.). Until banking industry in general with the
what is the longest word? recently, the US had embargo application of the new FATCA law.
For economic purposes, the answer measures in place against Burma, Ultimately, if foreign banks don’t
must be “extraterritoriality” (in Cuba, Iran, North Korea, Syria, respect the new rules, they risk a hefty
English, it is officially oultramicro- Sudan and Russia. fine or, worse, losing their license in
scopicsilicovolcanokoniosis”—good From a strictly legal point of view, the United States. �
luck ...). Of course, such a long the United States could only impose
Extraterritoriality is when a nation submits, willingly

or not, to another nation’s jurisdiction. This is the case
Excerpted with the permission of SAGE
for embassies or, historically, foreign concessions in Response from Are you a tiger, a cat or a
Shanghai in the 19th and early 20th centuries. dinosaur? Copyright 2017. Stephane Garelli. All
rights reserved.

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Gautam Hari Singhania

India’s ﬁrst world-class management magazine

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