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.

Structuring work intelligently

If I were to list the top three teachable skills that are most important in the Indian workplace, being able to structure work intelligently would figure on that list.

What do I mean by structuring work? I mean being able to break down a job intelligently into its sub-tasks, so that when you think you are done, you are really done! And you have done well!

Let me give an example. Let us say my boss asked me to find a good location for a new office that is being planned. I could take up this job in several ways.

THE BAD WAYS

1. The "Stunned-into-silence" way: I go away and am not heard from again, almost. Each time the boss asks me the status, I make some noises to the effect that I am working on it. I want to finish it all before I show her anything but I don't really know what to do! Then as more time passes, I start to feel I'll have to show her even more stuff. Now I get terribly uncomfortable. Finally when she pings me yet again, I make some more noises and show her some tidbits of work. She gets fed up, understands that the job is too much for me, and gives it to someone else.

2. The "Please-wipe-my-nose-for-me" way: I come back two days later and ask my boss, "Should I look up some real estate brokers?" When she says yes because she is busy and can't pay full attention to my question, I go away, only to come back a few days later. "Ma'am, I have got the phone numbers of three real estate brokers. Should I try to get some more?" "Yes!" she exclaims, deep in some work. Then I come back again a few days later and say, "Ma'am, I now have the contacts of six brokers. What should I do next?" And so on. It takes ten times as long as it needed to and the boss starts to feel that she might have just as well done it all herself. Also because she is answering many stupid one-off questions when she's not paying full attention, the process is bad and the task gets done badly.

3. The "First-idea-that-comes-to-mind" way: I come back in an hour and say, "Ma'am, there is an office available at xyz address, should we book it? The color of the walls is very good!"

Do these examples look too bad to be true? We see such examples every single week!


THE GOOD WAY

Some thinking and planning goes a long way. Think of it as a project.

What are the criteria for a good decision, i.e. what are we trying to achieve? These could be hard constraints - e.g. the office must be at least 10,000 square feet - or these could be objectives - e.g. distance from public transport. Write the criteria down! When you think you are done, brainstorm for some more ideas. One could also assign weightages for these criteria such as critical, important, good to have, etc. Weightages can of course alse be numerical.

Next, what are the alternatives? I can divide the town into various zones and look at the alternatives at that level. And I can later list all the alternatives under each zone.

As I proceed, I need to make sure I am tapping all the sources of information. This is not just information regarding the alternatives (e.g. real estate brokers, etc.) but also regarding the criteria (e.g. HR can tell me how many people live in each zone, etc.) If I forget to tap a source of information, the lapse will probably come back to bite me.

Only when I have set this entire framework in place should I proceed to evaluate each of my alternatives against my criteria. I'd ideally do it in a spreadsheet.

The evaluation will lead me to the decision, or at least take me close enough. Once the choices have been narrowed down, the final decision is often a little subjective and the boss might want to make it.*

Anyway, if I structure my thinking and my work in this way, my boss will probably be quite impressed with my thoroughness and abilities. I'll go far in the company.

It's easy, right? Yes! But you'll be surprised how few people actually act this way.

So watch out for the "Stunned-into-silence", "Please-wipe-my-nose-for-me" and "First-idea-that-comes-to-mind" modes of project failure. Practise structuring your work intelligently, so that when the time comes and you are given the responsibility of a big project, you'll do a good job.


* I once blogged about the CASED method for making a decision (here is the post and here is another with an example). C for Criteria. A for Alternatives. S is for Sources of Information. E is for Evaluation. D is for Decision and perhaps Documentation. This above example is basically in line with that approach.

Improving the air quality in our cities

Government expands easily, and seldom contracts. Rules and regulations proliferate and are not reviewed often enough to see if they still conform to the dictates of common sense.

I was reminded of this by a large advertisement in leading newspapers by the Pollution Under Control (PUC) drive, Government of Delhi. It reminded the city's vehicle owners that failure to produce a valid PUC certificate on demand would lead to a Rs. 1000 fine for the first offence, and a Rs. 2000 fine for every subsequent offence. The Delhi government is understandably eager to reduce air pollution ahead of the Commonwealth Games.

But does enforcing this rule really help? Let's analyze and see.

A PUC certificate is valid for three months and costs Rs. 45. Therefore the government is effectively taxing each car owner Rs. 180 each year (and spending most of that money on the test) and perhaps 2-4 hours of his or her time. The time does not seem like a lot - but if you add up all the running around an Indian needs to do for his or her driving licence, ration card, passport, electricity bill, etc., the result is a very large number. The bureaucracy crushes our productivity.



My Civic is now more than 2 years old and has covered 25,000 km approximately. It's emissions numbers look like this:


The measured CO level is just TWO PERCENT of the limit. Similarly, the level of hydrocarbons is LESS THAN TWO PERCENT of the limit.

It is not just the Civic that gives these incredible numbers. My 15 year old Suzuki Esteem still gives very good numbers. In fact, most modern petrol cars will be well below the limits for the first few years or first 100,000 km of their lives. Given that there are at least ten or twenty lakh cars in Delhi that meet these criteria, we have perhaps Rs. 20 to Rs. 40 crores and millions of hours of productive time being wasted each year in enforcing the PUC certification for these vehicles.

And what of the cars that are at the edge of the emissions limits or over them - the cars that are diesel run, old, or used for commercial purposes? They often get PUC certificates too, by temporarily adjusting the engine, by bribing the vendor, and so on. I am not saying that the PUC certificates are useless, but this system has many holes.

Perhaps there should be random checking and the fines should be changed thus: Each time you are caught with emissions above the limits and no certificate, you pay a Rs. 2000 fine while if you are caught with emissions above the limits but with a valid certificate you pay Rs. 1000 (and the vendor who gave you the certificate is put on a watchlist). Wouldn't that ensure better compliance and lesser wastage of resources?

I can bet the Delhi air would be a LOT cleaner before the Commonwealth Games if this was the approach taken. Plus we would save a lot of time and money.

The current PUC system - computerized and with a webcam - was a great advance but it is time that we improve it still further.

I feel better today

After months of struggling with the inadequate English skills and critical thinking abilities taught by our Indian schools, I feel much better after listening to this Verizon customer service audio clip from the US.

They have their own problems!