"Truth and oil will out"

A few days ago, talking about how people always get what they deserve, my father said, "Truth and oil will out".

The phrase resounded with me. It sounded very poetic and accurate...and faintly familiar though later I could not find it even on Google. I interpreted the oil part of the analogy as "If you crush oilseeds long enough, the oil will drip out and, yes, it IS hard work".

But as I write this, it strikes me that the oil this refers to may be petroleum, since my father is a petroleum geologist. Perhaps this is an oilman's phrase.

Be that as it may, coming back to the underlying theme - truth is very prone to coming out.

So when you are a company, it is sometimes easier to actually change your products or services or operations to conform to a truth that you can live with rather than convince everyone around you about a non-existent truth. In the long run truth will out. (Although it is, unhappily, true that in the long run we are also all dead.)

I have realized over time that established companies can more easily speak the truth, even if they choose not to. It is easier for an established company to say that it doesn't do something well but it will fix that or that a product has defects but, yes, it will fix them. There is always a cushion - of cash, of goodwill, and so on - that an established company has. If there is a failure, it is easier for an established company to say "mea culpa" and make the right noises and get away with it.

It is far more difficult to speak the truth when you are a small company angling for new business, or an aspiring company shooting for the stars. Speaking the truth is mostly about admitting weakness, and any sign of weakness may become a deal-breaker if you are not fully established.

I have lived this dilemma some years ago at our software product company, SupplyChainge. Each time a customer would ask, "Does your software do xyz?" I would honestly answer "No, but it could in 2 weeks!" This was in the US and mostly the customer was unimpressed. Finally, a very senior and experienced sales colleague gave me this tongue-in-cheek advice, "If you are 100% confident that you can have that feature up and running within six months - the very minimum time it will take for the customer to buy your product - then in this software industry at least you are not lying if you say you already have that feature!"

Anecdotally, this tradition dates back at least to Bill Gates and MSDOS. I later learnt through observation that many software product customers *expect* it and if you are being very factual what you say gets discounted anyway.

(In balance, I must also say that I also have some friends who think that all software product salespeople are cheap liars.)

Incidentally, most people with international experience will agree that it is most difficult to admit weakness in US and UK sales situations. In Europe, the Nordics are perhaps more forgiving than, say, Germany, although I am not so sure about this. And Asia is even more forgiving but if and only if you belong to some inner circle.

Some of the things I said today during a sales meeting in Copenhagen would have completely destroyed a typical meeting in the US. It took me several years to realize that disarming honesty doesn't really disarm in typical US sales situations. Gandhiji, with his mixed and changing messages and periods of self-doubt, would have been labeled a crank. Similarly, I could not have said these things had Nagarro not been more or less an established company by now.

Changing contexts, in non-business life too, I find it simpler to tell the truth as much as possible. If the truth cannot be told for any overriding reason (e.g. adhering to the dictum that "satyam bruyaat, priyam bruyaat, maa bruyaat satyam apriyam") it is best to tell a story that is as close to the truth as possible. The great thing about a true story is that it HAPPENED, so every bit of evidence taken in or out of context from what actually happened, every sampling of the multitudinous ripples of effects that the event sent out, will all be completely CONSISTENT. No matter how odd any fact may seem, if the WHOLE truth surrounding the fact is considered its various aspects will be completely consistent, by definition.

I love this simple quality of truth. "Truth and oil will out". I likes.

Defining your region of excellence

A business benefits by positioning itself in an established business category - potential customers can easily understand its offerings and business model. So today if you say you are offer "outsourced IT services with a global delivery model", everyone immediately knows what you do. Similarly, if you say you are trying to start an "online social network", you have conveyed a lot with just those three words.

On the flip side, by being part of a well-established category, your business ends up herded together with all the other players in that category. A balance is perhaps ideal: one must be different but not scarily different.

Yet far too many small businesses are so busy with their day to day operations that they do not figure out how to position themselves uniquely. It would be good for these companies if their management could spend a day or two to come up with the "one-liner" that expresses their positioning with respect to customer needs and shows how they are (or want to be) different from their competition. This is also the concept of a Unique Selling Proposition or USP, which appears to date from the 1940s. Ideally every employee of the company must know this one-liner USP and understand what it means in terms of his or her job.

So how do you go about choosing a USP for your business? Some questions you may ask yourself are:

1. What is the biggest pain point for my customers, and how are we better than my competitors in solving it?
2. When customers compliment us, what are they complimenting us for?
3. When customers complain about the competition (or when I talk down the competition), what are the chief shortcomings aired?
4. What are our best people good at?

... and so on.

Such a methodical approach is also important beyond the one-liner. Remember, the customer prefers to buy not just from any adequate company, but from a company that is the *best* for her. So when selling to a customer, you may have to:

1. Find out who the competition is,
2. Choose that subset region of requirements where you can realistically argue that you are better than all the competition, and then
3. Try to convince the customer that excellence in this region is very important for her.

For example, if you were Nagarro, an India-centric IT services company, you could possibly define your region of strength as the intersection of a) between 500 and 1000 people in size, AND b) working equally for both software product companies as well as leading corporates. In this smaller niche, Nagarro is probably number 1! Suddenly your job as a Nagarro salesperson is easier - you have a good chance with all those customers for whom this might be an important combination of requirements.

At Proton, we set out to create "Positive responsible professionals". We were well aware that our typical student might not be the best at, for example, hardcore analytics. So we decided to create MBAs who, while being acceptable in other areas, were second to none in positive outlook, taking responsibility and professional conduct. In this smaller region of an employer's search space, we believe that the school can be number 1. And we believe that we can convince employers that for many jobs, this is the most important combination of attributes that they require. As employers ourselves, we know we'd give anything for a positive young man or woman who knows how to take responsibility and knows how to get things done.

I typically end up needing two or three requirements to meaningfully bound the region of excellence in which a small company can credibly claim to be the very best (in the Nagarro example, 1. Size, 2. Diversity of client portfolio). Perhaps a larger, better-known company can make do with just one. And beyond three, I think you start to lose the customer's attention. I find all this quite interesting as an exercise in rhetoric.

Finally, not every attempt at differentiation comes from the heart. Some companies are a little cynical in their attempts at differentiation. They may pick points of difference that are obviously quite irrelevant and yet customers may be quite willing to be taken in by them. I have tried hard to understand this phenomenon - my best guess is that the customers are so happy to be "intellectually" engaged in absorbing or evaluating the claims that they forget to consider whether what is claimed should indeed be important to them!

This morning, I was shaving in my bathroom while outlining this blogpost in my mind, when I noticed that the bottle of hair product on my shelf announced in large font, "NO ALCOHOL!" It is probably a perfect example of misleading differentiation. Why should I as a consumer care if the product contains alcohol or not, especially if I am not meant to drink it? But somehow that confident declaration probably makes some consumers say, "These guys are making such a big deal about this alcohol thing - it must be important." And they presumably reach for their wallets.

It is at points like these, in my opinion, that marketing - somewhat inevitably - goes from being a useful concept for creating variety and innovation in the marketplace and crosses over to the Dark Side!

It happens only in India

A Meerut couple eloped and was murdered by the girl's family. The police found the young man's body and arrested the girl's father and brother.

Subsequently, the girl's brother confessed to the murder. The press picked up the juicy story.

But then the 'murdered' young man and woman walked into a police station at Muzaffarnagar!!!

The implications on how the police works are mind-boggling.

The top 18 things that a businessman should know

I'm returning to this blog after a long period of inactivity. Inactivity on the blog, that is - in real life the degree of activity around me has soared like Delhi's blazing heat in this, the hottest early summer in decades.

Manu, Varun and I have been designing the Family-Managed Business program that we are going to launch shortly. We have been thinking that in this program we will focus on a different aspect of family-managed entrepreneurial business each month. Thus the 18 month course will allow us to dive into 18 different things, which should together provide a practical and comprehensive 360 degree view.

To decide what these top 18 things should be, we first drew up independent lists. When I compared my list with Prof. Varun's this morning, I was not surprised to see that there was a 90% overlap. (I haven't compared it with Manu's yet.)

This then is my informal list, in no particular order, focused solely on practical topics for the small-scale or medium-scale business:

Defining your narrower market niche (in which you are THE best)

Developing a vision for your business (this is closely tied to the first point)

Leveraging the power of Internet marketing (using websites, SEO, SEM, social networking, blogs, etc.)

Getting the most from real world marketing (ranging from smarter business communication to cultivating newsmedia for PR)

Conceptualizing, planning and executing initiatives (project management)

Scaling an organization through modularization and processes

Understanding accounting and tax optimization

Understanding people and what they are good at, developing reporting systems

Leveraging business IT

Understanding business law, contracts and litigation

Managing your time and your mind

Understanding quality

Maximizing profit and cash flow, not just sales

Balancing family relations and the business

Professionalizing the family business without affecting the bottomline

Learning the art of selling and negotiation

Managing business risk

Handling the regulatory environment

Most of this I learned by trial and error and had we been taught this through our formal education, we would have done better and gone further.

Anything I left out?

Acceptance vs. Striving

These days I often find myself seeing human issues in the basic framework of acceptance vs. striving - should one accept something external as it is or should one strive aggressively to change it?

I was reminded of this by talking to Hulesh Sahu this week. Hulesh is a student of the Fall 2008 Indore batch. When Hulesh joined PROTON, he was one of the two students I remember who appeared to be most overwhelmed by the business school experience. (The other one quit in the first week.) I remember prodding Hulesh gently in class to say something, anything, to get into the flow of conversation, even as I wasn't sure if I was doing the right thing by singling him out. He was simply unable to participate, tongue-tied in his nervousness. He had grown up in a 500-person village, studied in a Hindi-medium school, and the class appeared to be too much for him.

Today, less than two years later, he is fairly articulate and thinks very smartly on his feet - a good catch for any employer. While a few other much more gifted students may have expended energy in identifying faults in our environment at PROTON, Hulesh embraced the system and worked single-mindedly on improving himself. And, interestingly, this week I was there asking him for advice on how we can improve the system!

The human emotion of calm acceptance of the external environment is precious and frees up a lot of energy. However, if you don't try to improve things around you now, you might have cause for regret later. Hence the dilemma, even for a thinking person.

Traditionally, Indians are a rather accepting people. Many of us live in terrible conditions without a murmur of protest. In fact, the dirt-poor Indian extraordinarily manages to preserve a semblance of elegance and grace. I am reminded of a couple of lines from a poem describing a rickshaw-puller, "To call him stoic would bestow on him too much dignity / And yet there's rhythm in his rise and fall and he knows it".

Perhaps this calm acceptance is because so much of Indian philosophy stresses that you should look within yourself for shortcomings to fix rather than criticize the world around you. India is the birthplace of Gautam Buddh and Vardhman Mahavir and countless other great personages who made this idea the cornerstone of their teachings.

Yet arrayed against this is perhaps the most rousing call to action over inaction - the Bhagvad Gita. "Karmanyevaadhikaar astey / Ma phaleshu kadachan / Ma karm phal hetu bhu / Ma te sangato akarmani !" ("You can control your efforts / But you can't control at all what they result in / So your efforts must not be for the fruit / And yet you should not embrace inaction!") It's the "Ma te sangato akarmani" which distinguishes this from the accepting or passive nature of much of Indian religious and spiritual thought.

Another interesting angle is provided by the Tao Te Ching, the classic Chinese text. One sentence from the English translation is stuck in my mind: "The Master doesn't DO, he IS." The context appears to say - act, but don't be activated by the action, the action should just flow from who you are. To me this appears as the most brilliant synthesis.

Each situation is different. But I think I would like to teach my son Ekagra to be able to look at his own self critically while also being constructively critical of the world around him.