Management

8 rules to win in China

| Aditya Sehgal

IMG_2628

After spending 7+ years in China, here are 8 learnings that can help you succeed :

1. In China, everything is possible, but nothing is easy

2. People want to help you in China – if someone says no, its only because you asked the wrong question. Change the question.

3. People don’t want to disappoint you in China – so they may say yes when they mean no. Change the question.

4. The way to get rich in China is first to help someone else to get rich, and then to tie your success to theirs.

5. The way to get very rich is to find many people to apply rule 4 to.

6. After the contract is signed – thats where the real negotiation starts. It never finishes.

7. Contracts are toilet paper. Relationships are key.

8. 8 is a lucky number in China. Never have more than 7 priorities (or rules)

Lessons in leadership

| Aditya Sehgal

10 rules final

One of the most effective leaders I know packaged a lifetime of outperformance in a 5 minute speech.
This post shares the essence of his leadership philosophy.

Lesson No 10 : You suck

Rule 10 - you suck
Constructively challenge your team – they can do better

Less No 9 : Bullshit

Rule 9 - bullshit
Authentic feedback and coaching. Honest. Direct. In your face.

Lesson No 8 : Mickey Mouse

Rule 7 - Mickey Mouse
The idea or proposal is too small. Encourage your team to think big

Lesson No 7 : Play hard and work hard

Rule 6 - work play hard
Every idiot can work hard, so play hard is much more important.
Play hard is important for two reasons. One is to have fun with your team, to inspire your team. Second is to live a balanced lifestyle to avoid insanity. Its important for your team to be effective, and its important for yourself to be effective, so play hard.

Lesson No 6 : Go back

Rule 8 - go back
Your team has not done its homework, the numbers are wrong, there is not enough attention to detail. Attention to detail is very important, especially in emerging markets.

Lesson No 5 : Be the lone nut

Rule 5 - the lone nut
Creating the right culture is your No 1 job. Do not fear to be the ‘lone nut’. Others will follow you.

Lesson No 4 : Strategy + People + Execution

Rule 4 - PEG
This is a very useful framework. Remember to spend 90% of your time on People, culture and execution and 10% on strategy. There are a lot of smart people who can figure out the strategy – you can always pay them.

Lesson No 3 : I trust you

Rule 3 - i trust U
Hire and surround yourself with the best people. Then show them your love. You leave them alone after the meeting to do a great job. Don’t pester them, annoy them, confuse them or reduce their motivation. If you trust them you will give them freedom. If you don’t trust them, ask them to move on. There are only two options.

Lesson No 2 : The fish stinks from the head

Rule 2 - fish head
Drive organisational change starting at the top of the organisation. If you have a problem with a company, or a function or a region, you don’t start with the little people – always start with the leadership of that unit and then make organisational changes top down.

Lesson No 1 : Bottom feeder

Rule 1 - bottom feeder
Have a clear performance rank and competition in place. The bottom 20% on a repeated basis will leave the organisation or retire. There is a very strong correlation between performance and growth in organisations and you must reward performance.
If you are yourself the bottom feeder for too long, think about whether you are holding the organisation back.

Alibaba and the Chinese dream

| Aditya Sehgal

2014-09-10 at 22.49.15

With the Alibaba IPO, there has been an explosion of interest in the company.

Speculation has reached fever pitch in the media – ‘There will be a battle of dominance between Amazon and Alibaba for the global e-commerce market’; ‘With $160 Bn in valuation at IPO, Alibaba may, at some point, challenge Apple as the most valuable company in the world’; ‘Alibaba is just another Chinese copycat – when it meets ‘real’ competition as it expands globally, it will fail’.

There is a desire to understand more about Alibaba and its business model.

Is it really bigger than Amazon and eBay put together on GMV (Gross merchandise value) ?
How is it so profitable when Amazon makes so little money ?
How did Taobao become the second largest ‘retailer’ in the world so quickly, just in China ?
When will Taobao overtake Walmart globally on GMV ?
Is Taobao like eBay or Amazon, is Alipay anything like Paypal, What is Taobao and Tmall ?
Is Alibaba a China focused operation, or does it have its sights wider ?
Why is Alibaba making investments/ acquisitions/partnerships in the video space (Youku/Tudou) and in social (Sina Weibo) ?
Whats behind the spate of global acquisitions ?
Why has Jack Ma stepped down as CEO ?
Why is he investing in logistics chains and brick and mortar businesses in China ?

In this post, I am not going to address any of these questions. Enough has been written about these issues and I attach some links at the bottom of this post for those who are interested to read more.

I will focus instead on the core philosophy behind Alibaba and what has most fascinated me about Alibaba – its power and mission to harness the Chinese dream, and thereby change the world.

One of my core learnings in 6+years working in China is that, if you want to have sustainable success, it is critical to build true partnerships and structure your business for success. This means that you create a way for your partners to make money, but you tie in a mechanism so that as they make money, you make money as well. Once you have done this, to scale your business, all you need to do is find more partners, and focus all your efforts into helping them make money, secure in the knowledge that you end up driving your own business as well !

This is the core of Alibaba’s philosophy and the key driver of its success.
jackma_alibaba_xinhua
Jack Ma built “a company that can serve millions of small businesses”. Alibaba’s mission is “to make it easy to do business anywhere“. Jack Ma says “At Alibaba, we fight for the little guy – our role is simple – through our ecosystem we help merchants and businesses find each other to conduct business – on their terms. We help merchants to grow, create jobs and open new markets in ways that were never before possible“.

Alibaba/Taobao has lived this philosophy for 15 years. To illustrate how successful they have been, consider that there are now more stores on Taobao (6 Million) than in the real world in all China (4 Million)!!

When comparing Alibaba with Amazon or any other western commerce business the core difference is the philosophy.
Alibaba ‘serves’ ‘small businesses and entrepreneurs’, it does not ‘sell to consumers’.
Alibaba ‘provides an ecosystem’, it does not see itself as a retailer.
Alibaba ‘fights for the little guy’, it is not a mechanism for big companies to sell to small consumers.

Alibaba is not about the short term. Jack Ma said “We want to be a company that last 102 years. We have 87 years to go“. With this scale of vision and the mindset to emancipate millions, Alibaba has the potential to change the world, not just more than any retailer, but perhaps more than any other company.

This difference in philosophy explains why Alibaba’s revenue model is so unique and why their business model is more virtuous. It explains their focus on enabling payment solutions and faster logistics. At heart Alibaba is a company that serves and hence, their focus is on things that can improve their service KPIs.

It explains why they have every chance of becoming the dominant retail platform in the world of tomorrow – their competitors can compete with other companies, but how can anyone compete with the focused, harnessed, entrepreneurial drive of an entire nation of 1.3 billion people ?

While Amazon and other companies have now got a significant proportion of their business going through a ‘marketplace’, unlike Alibaba, their aim is to benefit the end consumer through lower prices, and if their suppliers get squeezed, so be it.

For those who doubt Alibaba’s ability to win outside China, they should consider that Alibaba is likely to apply the same enabling philosophy wherever they go. Jack Ma says “We have become a household name in China and soon we will be ready for the world to know us.”

In India – a country with 4 Million retailers, Alibaba’s system be an inclusive way to connect them to the global marketplace, without the loss of jobs that organised retail could create.

Alibaba has the potential to create an Indian dream, an African dream, A European dream – where ordinary people could be given a platform to become entrepreneurs, and drag Alibaba along with them on the road to riches. The desire to be rich and successful is universal, and Alibaba’s philosophy can find traction everywhere.

In 1992, Deng Xiaoping encapsulated the Chinese dream when he said “to be rich is glorious“. The Chinese are a people with tremendous work ethic and a huge entrepreneurial drive. China, since it started opening up in 1979, created an environment which allowed this ‘Chinese dream’ to take root. While the 1900’s were driven by the American dream, there is every likelihood that the 2000’s will be driven by the power of the Chinese dream.

Alibaba is at the fulcrum of the Chinese dream. What’s more, Alibaba could be poised to ignite the Indian dream, the ASEAN dream and the African dream as well. In so doing, Alibaba could become a force for good – for positive change and the economic democratisation of the world order.

Jack Ma said “today is difficult, tomorrow is even more difficult, but the day after tomorrow is beautiful“. His dream for the day after tomorrow could just end up changing the world as we know it.

Jack Ma explains his philosophy in this video which was uploaded to youku.com

For more on Alibaba, click the links below :
https://www.linkedin.com/pulse/article/20140908065624-13518874-who-s-on-warpath-to-overtake-apple-as-the-world-s-most-valuable-company?trk=prof-post
https://www.linkedin.com/pulse/article/20140610130310-8549453-alibaba-rise-crocodile-in-the-yangtze?trkInfo=VSRPsearchId%3A91382241410365998607%2CVSRPtargetId%3A5882109807384629248%2CVSRPcmpt%3Aprimary&trk=vsrp_influencer_content_res_name
https://www.linkedin.com/pulse/article/20140509180346-8183750-alibaba-a-fruity-perspective?trkInfo=VSRPsearchId%3A91382241410365955747%2CVSRPtargetId%3A5870593710290399232%2CVSRPcmpt%3Aprimary&trk=vsrp_influencer_content_res_name
https://www.linkedin.com/pulse/article/20140909000839-115522836-the-alluring-tale-of-alibaba?trkInfo=VSRPsearchId%3A91382241410365955747%2CVSRPtargetId%3A5914880539386458112%2CVSRPcmpt%3Aprimary&trk=vsrp_influencer_content_res_name
https://www.linkedin.com/pulse/article/20140808235938-174887856-alibaba-is-here-to-change-logistics?trkInfo=VSRPsearchId%3A91382241410365998607%2CVSRPtargetId%3A5903660507373518848%2CVSRPcmpt%3Aprimary&trk=vsrp_influencer_content_res_name
https://www.linkedin.com/pulse/article/20140611105836-107304053-lessons-learnt-from-alibaba-and-jack-ma?trkInfo=VSRPsearchId%3A91382241410366018255%2CVSRPtargetId%3A5882438004588429312%2CVSRPcmpt%3Aprimary&trk=vsrp_influencer_content_res_name

Mastering time

| Aditya Sehgal

Time is a unique resource. Everyone has the same 86,400 seconds a day – whether powerful or weak, rich or poor, senior or junior.
Over a lifetime, time does differentiate – longevity correlates to health, genes and circumstance.

In the same 31.536 million seconds a year, how do some people get more done ?

Think of a person walking in a straight line vs. a person turning at random every so often.
After a while, the person walking in a straight line may have walked less, but will be further away from the start point than the confused rambler.


In time, the gap widens, and the rambler wonders – how did the other guy get so far ahead ?

We can not ‘manage’ time, we can only manage ourselves.
By managing our priorities we manage our utilisation of time.

To have a productive, happy life – maximise purposeful movement towards a goal. Minimise aimless rambling.
At the same time, have fun and enjoy the scenery and companionship along the way.
When done well, these principles gives the illusion of ‘mastering time’.

First, set ONE core goal in a year. (if one not possible, set max 3 goals)
If you start today, decide what you will achieve before Dec 31 2014.

It is super critical to select a goal which will make you super successful, if achieved.
Its OK if the goal is audacious or difficult, but it MUST have a material impact.

If the goal is professional, you may want to start by asking your boss a simple question
‘What is the one thing you want me to deliver before Dec 31 which will make you super-successful this year ?’
This is a great test for your boss. If s/he is unable to answer this question, consider your options for moving on and finding a new boss.

Next, identify your time wasters.
Anything that doesn’t take you towards your goal is a ‘time waster’.
In a work context, these come in 2 buckets :
1. Habitual behaviours – things that you have ‘conditioned’ yourself to do – e.g.. read email, check social media etc.
2. Meetings – these may be ‘important’ but may not take you towards your goal.

Every evening, plan your next day using your calendar. Make sure a specific task related to your big goal is top of the list.

Set an out of office reply. Suggested text : ‘I am busy in meetings and will look at email only after 5 PM on XYZ date (next day). In case its a matter of life and death, reach me via text message/wechat/whatsapp’

Execute the following daily plan :

1. For the first 2 hours (most productive period) work exclusively on the big goal.

Refuse all meetings. Do not open email or log onto the internet. If you are in a cubicle wear  headphones or book a meeting room and use it in private.
Even if you have no tasks for the big goal, work on it anyway – think about it, improve your plan, find a better way to get there.

In the last 15 minutes, log on to the internet and scan any developments or trends related to your long term goal. It helps to set up a standard Google search, or use a service like Pocket, Zite or Pulse to aggregate news in your area of focus.

Once a week scan LinkedIn for people who have skills relating to your goal.

At the end of the 2 hours, your ‘real work’ for the day is done.

You can then spend the rest of your time doing whatever you want or ‘need to’.
While it seems counterintuitive that you can ‘finish your work’ in 2 hours a day, remember that in 300 working days, you can spend 600 hours focused on your goal. There are very few projects or priorities that can not be cracked in 600 hours of single minded focus.

2. Take 30 minutes to batch process and clear your emails. 

Force yourself to scan and deal with all pending email in 30 minutes.

It will be difficult at first but will become easy with practise.
Group emails by subject and look at the last email in the chain first. Look at the others only if needed.
Force yourself to either respond with a maximum 1 line answer or delete the email. In general don’t answer more than 10% of your email.
Remember – the less email you send out, the less you receive.

In case the email is very important, and you can’t answer in a few words, put in in a ‘pending’ folder. Have the discipline to not put more than 1-2 emails in this folder at this time.

3. Reward yourself for 30 minutes

Check your social media, do some of the things you like to do.

4. You are now open for meetings

Remember 3 rules for meetings :

a) Take 5 minutes before the meeting to write down your desired outcome at the end.
b) Limit each meeting to max 1hour, ideally 30 minutes. Where possible ask for a pre read and agenda. Start each meeting with the question ‘what so we need to achieve in the next 30 min’.
c) Have a conversation rather than a presentation. Steer the conversation towards your desired outcomes. Once achieved, leave.

5. Use lunch to have a ‘conversation’

Use lunch to have conversations which can help further your goal. This will infect other people with passion for your goal and will get you more support and ideas.

6. Do a daily walk around the office at least once

Chat with your colleagues. Often these interactions spur new ideas and help you develop an early waning system for issues.

7. At the end of the day, batch process email once again.

Clear your email including anything you put into ‘pending’ using the same rules as the morning.
Once your mailbox is empty, leave.
If you are unable to manage your mailbox to zero in the week, take a couple of hours extra on Friday or Saturday to manage the weeks accumulation to zero. Start each week with 0 emails in the inbox.

8. Every 2 weeks, meet someone new/external over coffee

LinkedIn is great to meet new people who have skills which can help with your big goal. You will be surprised how much new perspective and help you get.

9. Create a system to manage repetitive jobs 

If your job is repetitive, you have a great opportunity – expend one time effort to create a system to automate the work. Free up 80% of your time to follow your goal.

With practise and determination, you will be able to stick to this schedule for 70%-80% of working days – Expect days where you compromise for travel, meetings, reviews with the boss, offsite meetings etc. When back to normal, get back to the system – make it a habit and don’t slip.

When done well, in my experience, this system :
1. Gets you promoted because you deliver the big stuff and make a real difference.
2. Allows you to have fun at work. You spend a lot of time in conversations – which helps you build relationship and belonging.
3. Forces you look outwards – so you grow and develop. You find new and unexpectedly creative ways to reach your goal. You become a thought leader in the organisation.
4. Gives you job satisfaction – imagine completing your work in the first 2 hours of the day and being ‘free’ thereafter !

By managing your priorities, you project the illusion of managing time.
So next time, don’t say you don’t have time – say its not a priority.

To read some of my older posts, please click the links below

Accelerate or die

Turbocharge your impact with 16 apps 

Business and bacteria – how things grow

Failing to succeed

Colliding trends create mountains of opportunity

Chinese trains and Indian cars

ACCELERATE OR DIE

| Aditya Sehgal

In a previous post, I had shown that business (and bacteria) grow in a S-shaped curve
https://adityasehgal.com/2014/07/13/business-and-bacteria-how-things-grow/
https://www.linkedin.com/today/post/article/20140713150608-9138224-business-and-bacteria-how-things-grow?trk=mp-reader-card

Both, old businesses, (eg. the PC business) and new business (eg. Apple) follow the same shape of the curve. In the chart below, the cumulative penetration of Apple devices, (driven by the iPhone) has almost caught up to cumulative Windows devices by 2013. Both grew on the S-curve. Clearly, the iPhone has done very well since launch !

Now, in the next chart comparing the iPhone vs Android and you can see that Android significantly outpaced the iPhone, while also growing on a S-curve. Why does the iPhone look so slow here ? Android is growing on a quarterly pace on the S curve, while Apple was growing on an annual pace. Clearly, Android did even better than the iPhone !

We all know the Android charge that unseated Apple’s dominance of smartphones was led by Samsung – but Samsung did not post the most stellar results recently (http://www.cnet.com/news/samsung-warns-2h14-will-be-tough-as-it-reports-weak-q2-results/).

They referenced new competition – from Chinese players like Xiaomi.

The next chart shows the user growth of the Xiaomi mobile OS (MIUI) – It is also exploding along a S-Curve, but this time the acceleration is driven monthly.

In a few short years we have gone from a market growing along the S-curve in decades (PCs) to annually (iPhone) to quarterly (Samsung/Android) to monthly (Xiaomi).

While the smartphone example is drastic, I believe the same trend is also impacting other industries.

In competitive markets, the rate of change itself may be growing along a S-curve.

The small piranha is now eating the shark which is in turn eating the whale. As the piranha grows it becomes the shark and the shark becomes the whale.

The predators are growing into their prey – companies that are growing fast today lose their way tomorrow and are eaten by smaller, nimbler competitors.
This is the essence of the Innovators Dilemma as laid out by HBS professor Clayton M Christensen.

But, why does this happen ? Surely large companies can see the small predator coming ? Surely they have more resources ? More people who are more experienced ? Wal-Mart saw Amazon coming from the day Amazon launched. Post office employees were probably using e-mail at home as soon as it was available – why then is the dominant e-mail provider not a national post office ? and why is the No 1 e-retailer in the world today not Wal-Mart ?

One answer is that businesses work at an internal speed, a cadence which is built up by systems and processes which grow as structures, from past success.
Speed of growth along the S curve is driven by accessibility of product/service (driving availability) and virality of message (driving awareness). The internet and other disruptive technology accelerates both awareness and availability.

In the smartphone example the faster fish (monthly acceleration/cadence) are eating the fast fish (quarterly cadence) which in turn are chewing up the slow fish (annual cadence) and these in turn have already gobbled up the slowest fish (feature phones which moved at a glacial cadence in relative terms).

Large businesses work at annual speed with a 12 monthly cyclical cadence.

In large businesses, there are many managers. Managers like to react in ‘planning cycles’. There are as many opinions as there are managers, and all these opinions are validated with data.
It takes time to generate & analyse data – and even more time to decide what to do, between the many stakeholders.
There are systems to improve ‘chances of success’ through research and following manuals. Most large organisations have BBF programs (bigger, better, fewer). Anything that doesn’t follow the process or is not approved by ‘the system’ is sent back. Without the right data, senior management is ‘unable to reliably decide’ whether the initiative is good or not. Gut feel is not good enough. After all – it is not validated !
Everything important is approved by an ‘Executive committee’ which meets at best monthly and has an agenda backlog of 3 months.
Employees with entrepreneurial instincts are crushed under the weight of management and process. Many vote with their feet – to go and create the new companies that attack and eat up their former employers.

Managers have an inflated view of their invulnerability and the superiority of their ‘team’ and ‘process’.
While the competitor is small, and is refining their product and service, there is contempt for the newcomer. There are a million good reasons why they will fail. Managers are smug in their superiority.

Often, the small player has a slightly different product/service. They establish a small new consumer preferred niche/segment that they are able to grow at turbo speed by making inroads into the dominant market segment.

The large company realises too late that they need to compete in the new segment of the market. There is still supreme confidence that their brand will become market leader in the new segment as soon as it is introduced – after all, don’t they have the brand with the best equity ? Unfortunately, by the time they get their act together they are the underdog in the segment – their ‘process’ slows them down further and they are always reacting to a fast improving competitor. They can’t understand how the competition is moving so fast.

On top, their new service is now competing with their old service and cannibalising it – often they make less money on the new service at the start so their financials are under pressure. The vast majority of employees are still in the ‘old’ part of the business – there is tremendous internal resistance to putting so much resource into the new business and ‘starving’ the old business. A fog of indecision and despair descends. At this point the entrepreneurial members of the team get sick of pushing water uphill and leave. The bureaucrats thrive.

The gap with the competitor widens. Management now starts missing targets and there is growing internal pressure. Eventually the company loses market leadership. It is now the beaten leader and a drastic turnaround plan is instituted to cut costs, reduce layers and make it competitive again. Many employees lose their jobs and a once-proud business stands humbled. Shareholders punish the company’s leadership.

The victor in the struggle keeps growing till the point where it too falls victim to a smaller, nimbler, less bureaucratic competitor, operating at a faster cadence.

How can the large fish avoid being nibbled away alive by the smaller fish ? There are many books on the subject and a comprehensive answer is way beyond the scope of this post. Some points to consider, however, are :

1. Understand that different things in the company should work to different cadences. Run processes in parallel rather than sequentially and focus resource on cutting cycle times of long lead time items. Ask the team for ‘impossible’ deadlines. Even where long term R&D/regulatory barriers cause unavoidable long lead times, initiatives can be started in parallel and phased to mature quickly one after the other. An example of this is how China has built its railways and cities – to the outside world it looks like a new city or high speed line appears every 6 months, but internally this is the result of many years of large, long lead time projects running in parallel, maturing quickly – one after the other. In summary – put lots of projects into the innovation funnel so you can have lots of speed later. The opposite of BBF.

2. When competing with a small fish (but one which has sharp teeth), drive the response at a completely different cadence – make sure the team understands that the ‘regular process’, ‘validation’ can be junked. Lead the response top down – with the project driven as the single focus of a senior director. Ensure the whole organisation understands the urgency of the problem. Expect – not twice the regular speed, but 10 times the regular speed and tell the team they can break any rule if they get the speed. Find entrepreneurs to lead the team, and then make sure you clear the decks and don’t slow them down. Change the metrics to daily, weekly, monthly from quarter, annual, 3 yearly. Incentivise as aggressively as you expect results.

3. At the first sign of success, pour in disproportionate resource to scale up. Plan to drive the new business to be the dominant proportion of the business even faster than the competitor. Don’t be afraid to cannibalise yourself with a slightly inferior product or financials – your competitor will cannibalise you if you don’t cannibalise yourself. As the business grows, aggressively cannibalise the ‘old world’ part of the organisation for talent and retrain them on the job as the business grows.

4. Don’t wait for perfection – Launch if you are 80% of perfect (except where human lives/health are at stake). Improve as you go. Roll out frequent, incremental product improvements every few days/weeks. every few months (or longer depending on the product life cycle and cycle time to gain critical mass in awareness/availability) consider launching variants or improvements of the product.

Don’t fall into the trap of thinking that the business is invulnerable – that the chances of success of a disruptive new player are small. Don’t think – ‘It wont happen to me’.

Remember the lesson of the sperm – the chances of a sperm fertilising an egg is about 600 Mn to 1.

But thats not the important point.

The world has about 7 Bn people today – clearly, 1 sperm has made it past odds of 1:600 Mn at least 7 Bn times !

Even with very low odds, given enough time, and enough tries – someone will disrupt your business – when that happens, you must accelerate or die.

For a very interesting opinion on the chances of you existing, go to :http://members.shaw.ca/tfrisen/chances_of_you_existing.htm

References :
http://technode.com/2014/06/20/xiaomi-software-integrated-whole-lot-third-party-services-users-engaged-ecosystem/
http://tabtimes.com/feature/ittech-os-ipad-ios/2014/01/15/why-apple-ios-device-sales-are-set-catch-windows-2014
http://www.nateriggs.com/smartphone-adoption-iphone-android-app/
http://www.asymco.com/category/industry/
http://books.google.com.hk/books/about/The_Innovator_s_Dilemma.html?id=SIexi_qgq2gC

My seven lenses for solving problems

| Aditya Sehgal

Six years ago, as a newcomer to China, I struggled to understand the culture. Very often, I needed to find non obvious solutions to non obvious problems.

Over time, I was fortunate to work with many Chinese friends and colleagues who widened my perspective. They taught me there are many hidden helpers to help solve my problems. This led me to develop one of my problem solving systems – my seven lenses for solving problems.

Put simply, the lenses are a bit like Edward De Bono’s thinking hats.

When I have a difficult problem to solve, before applying the lenses the first step is to understand what the problem really is. Almost every time, this simple step results in changing the problem definition – solving a very different problem than what I started with.

Once I have identified what is the ‘non obvious problem’, its time to find the ‘non obvious solution’.

I close my eyes, and with my minds eye, I apply all seven lenses, first one by one, and then in combinations to the problem till I find possible solutions to further explore and polish.

My most productive Lenses are :

1. The Partnership Lens

Is there a partner who can help ? Whose interests can be served by solving this problem ? How can I partner with them and create a win-win situation.

2. The Technology Lens

Can I apply technology to solve this problem ? Can it be automated ? Can it be turned into a ‘machine solution’ by being outsourced to someone who can solve it better ? Can a computer solve it faster/better/cheaper/easier than I can ? Is there a way to program a solution so it becomes repeatable ?

3. The Mobile/Context Lens

Does the solution lie in context/location ? Is it about where I am or what else I am doing at the moment ? Can my smartphone help me solve it with any of its capabilities ?

4. The Question Lens

Very useful when I am trying to get/negotiate something from someone. If the answer to my question is ‘No’, how can I change my question so that the answer is ‘Yes’ ? Can it be a series of questions which lead to ‘Yes’ answers and eventually to a ‘Yes’ answer to my question ?

5. The Government Lens

How can the government help me ? Is what I am doing aligned with the aims of the country ? Is it furthering Civic interest ? If it is in line with where the Government wants to go, there is usually a massive tailwind. If it is not in line, can I nudge my problem so my solution coincides with a Government focus ?

6. The Future Lens

What will be the answer to my question 2 years from now ? 10 years ? 50 years ? 100 years ago ? Do any of these answers inspire me to think how I can a) accelerate a desirable future b) bring back a desirable past ?

7. The Speed Lens

How would the solution look like if I was to do it in half the time ? 10 times faster ? 100 times faster ? How could I do it in 1 second ? What would I add to the solution if I had a year to fix it ? What if I had a century ??

Combination lenses

What if I combined the lenses in various orders ? I could have 21 possible double lens combinations (eg. speed + govt, mobile + partnership), 15 triple lens combinations, 4 quadruple lens combinations, 3 5 lens combinations, 2 6 lens combinations and 1 7 lens combinations. [Though I struggle to conceptualise any more than 3-4 lens combinations at a time]

Of course, there can be many more lenses ! This is not a MECE list (Mutually Exclusive; Collectively Exhaustive). Feel free to add on what works for you.

I suspect that in different countries you may want to add or subtract lenses from your camera. In India, a Jugaad lens works great – ‘What is the Jugaad solution’.

Of course, a lens that often is very valuable is a ‘Google lens’ – sometimes its best to use this even before the other 7 lenses. When you have a problem to solve, just google it to begin – you may be surprised !

I would love to hear about the lenses you would like to add to the toolkit ? Is there a problem solving approach or lens that works well for you ? Please do share in comments below, by communicating with me or by connecting on my Linked in account cn.linkedin.com/pub/aditya-sehgal/3/88/3a8/

Photo credit : Photojojo.com who sell Holga lenses with the multiple lens selector –  for photography, not problem solving !

Business and bacteria – how things grow

| Aditya Sehgal

Things grow in surprisingly similar ways.

The growth of bacteria in a culture, volume expansion of a balloon, weight increase of a child, growth of a tumour, mobile subscriber growth, the number of users of iTunes all follow a similar growth trend – the S curve.

iTunes accounts growth iPhone sales from launch Human growth curveVolume of helim in a balloon

In business, ‘straight line’ growth can be an optical illusion – a small segment of a S-curve, at any stage, looks suspiciously like a straight line !

The S curve describes the growth of brands, products, services, distribution, information flow, word of mouth, propagation of messages through social networks and a host of other things.

An understanding of this curve can help define business strategy and planning.

Businesses often use complex STM (simulated test market) modellers to project how big a new initiative will become over 3-5 years, and how to optimise the product and support plan make it bigger. Most of these methodologies miss the point – the value creation is in the later periods – which are not projected at all !

One way to understand how brands grow is to look at similarities with bacterial growth in a culture. (http://microbeonline.com/typical-growth-curve-of-bacterial-population-in-enclosed-vessel-batch-culture/)

Bacterial growth

There are 4 phases of growth in the S-curve – for both bacteria and business:

1. The lag/incubation phase : Growth begins after a lag. The length of this phase depends  on the conditions, the quality of the bacteria and compatibility with the medium. In business, this is a period of capability building. It depends on the macro environment, strength of the idea and organisation, and compatibility with targeted buyers.

2. The growth/exponential phase : Conditions are optimum and given sufficient food supply (awareness and availability in business), the bacteria (business) will multiply exponentially. This is when penetration explodes. Positive word of mouth and generation of ‘pull’ distribution adds on top of deep penetration in each of the organisation’s sales channels who know ‘how to sell’ an ‘accepted product’.

3. The stationary phase : Exponential growth can not continue indefinitely because essential nutrients in the culture are consumed (In business, penetration, awareness and availability max out). The birth and death of bacterium (new consumers entering vs existing consumers leaving the franchise) in the culture starts balancing out, and at the end of this phase, the bacteria may have filled all space available to it and start running out of food. The organisation gets hit by increasing complexity and bureaucracy, and attached by disruptive new competition who is riding its own growth phase. The business reaches its peak penetration and drops thereafter.

4. The death phase : Dying bacteria outnumber newborn bacteria, and there is an exponential decay – though much slower than the growth phase.

Managing the S-Curve

Understanding the S curve can help us generate explosive growth. To turbocharge growth :

  1. Shorten the ‘lag phase’ : ensure that the idea is strong, resonates with the target buyers and  is supported by a strong organisation. Use STM methodologies to fine-tune the initiative and maximise the chances of success.
  2. Time-shift the growth phase : Time-shift the growth phase : Fast growing businesses grow on the S-curve at a monthly/weekly/daily rate while slow businesses grow on the same curve at an annual rate. Driving increasing monthly CAGRs drives (you guessed it!) annual CAGRs upwards along an S-curve ! Over a 5 year horizon, 1% monthly CAGR leads to 13% annual CAGR, 3% monthly leads to 43% annually , 7% leads to 125%, 30% monthly leads to 2230% annually !
  3. Disrupt your idea yourself to get the business onto another growth phase before it reaches the stationary phase.

After an initiative has entered the growth phase, maximise investment to drive awareness and availability with a sense of urgency. Awareness and availability maximise the size of the initiative. Urgency drives how fast it can get there.

For awareness and availability, a +2 mindset during this phase can help the initiative outperform its potential. A +2 mindset means putting in resources and infrastructure NOW, which you think are needed 2 periods later.

Awareness should be driven both through communication (advertising, PR, search etc.) and through engineering product/content/events to be ‘WOM worthy’. Social networks (online and real-world) can be key at this stage.

Speed and a sense of urgency (expecting a monthly CAGR and investing to drive it) can differentiate between massive modest successes. The key driver of urgency is management expectation – if you do not expect speed, you will not get it.

Lastly, remember that urgency in driving awareness & availability is key to drive the business to the upper part of the growth phase as soon as possible, so it can stay there for the longest period and maximise total value.

Consider data from KPCB on global smartphone growth (which also follows the S-curve)

Smartphone sales

In just one quarter – Q4 ’13, global smartphone sales exceeded sales in six quarters from Q1’09 till Q2’10. The next few succeeding quarters will see exponential growth which is even stronger.

The mid-upper part of the growth stage is where value creation is maximised, and businesses should aim to :

  1. Get there fast
  2. Stay there long

Core behaviours to maximise your S-curve :

  1. Be patient and ‘Nail it’ during the incubation phase – fix the business model
  2. Show urgency and ‘Scale it’ during the growth phase – invest for success
  3. Be paranoid and disrupt yourself before you reach the stationary phase

Where does your business sit on the S curve ?

Do you have the patience to incubate your business ? Do you display enough urgency in driving awareness and availability while your business is growing ? Or are you at the point where you should disrupt yourself before someone else disrupts you ?

References :

http://en.wikipedia.org/wiki/Gompertz_curve, http://en.wikipedia.org/wiki/Growth_curve, http://www.encyclopedia.com/topic/S-shaped_growth_curve.aspx, http://mysite.science.uottawa.ca/iabde083/ch01.pdf, http://www.encyclopedia.com/doc/1O8-densitydependence.html, http://en.wikipedia.org/wiki/Bacterial_growth, http://www.csklsc.edu.hk/biology/Interactive_MC/english/18Growth/1.htm, http://www.wikinvest.com/concept/IPhone, http://www.nailthenscale.com,

photo credit : http://oneinabillionblog.files.wordpress.com/2013/05/

Failing to succeed

| Aditya Sehgal

Behind every success is failure.

If the success is big, expect to find either a big failure behind it, or multiple small failures.

Progress comes from overcoming inertia. Inertia and habits drive people to do things the same way over and over.
Not trying new things in good times leads to short term avoidance of failure, but leads to catastrophic long term failure.

When times are bad people are at their most creative and inventive. The natural response to pain is to act to remove it. Tough times force people to re-evaluate their habits and look for better ways to solve their problems. These solutions become new habits which drive future success till they become obsolete in turn.

If failure is big, it could result in significant value destruction for an organisation.
On the other hand, if an organisation is not failing enough, it is not learning enough and is ripe for being disrupted.

How then, can an organisation address this paradox between failure and success ?

The trick is to build a culture of ‘failing small, often’ to reduce the chances of ‘failing big’.

The impact of reacting to multiple ‘small failures’ on an organisational scale can drive the organisation in serendipitous directions and enable success that may not have been ‘planned for’.

This ‘fail small, fail often’ culture need to be driven top down and designed into an organisation’s DNA.

5 areas to think about to drive this cultural shift :

1. Change from a directive organisation towards a directional organisation

Decide the company purpose, goals and accepted behaviours high up in the organisation and push decision rights down.

If the organisation’s goals and philosophies are clearly expressed, every employee can judge whether their decisions will take the company where it wants to go, in the right way. This enables them to make small decisions. This culture, when spread across an organisation, can result in an adaptive organisation and faster decision making. Many small risks are taken and many small learnings can be shared or scaled up. In the opposite model where decision rights are concentrated, the risks get aggregated at each level and by the time a decision is taken the cost of failure becomes higher.

2. Cut the bureaucracy 

There are no alignment meetings with just 1 person in a role. With 5 people there are 20 points of alignment, with 25 people there are 600. Alignment and meetings increase faster than headcount.
When an organisation becomes large and allocates decision rights to senior levels, few people can say ‘yes’, and many can say ‘no’.
New and disruptive ideas get killed before they a decision making level.
To manage bureaucracy and encourage small experiments, organisations should either cut layers or delegate decision making rights downwards.

3. Encourage small innovation 

Encourage everyone to innovate. Celebrate small success. (http://en.wikipedia.org/wiki/Kaizen)
Focus the team on consumers and on looking outwards to seemingly unrelated areas for new ideas. Cut the tendency to focus on navel gazing and competition watching.

4. Start pretoyping (http://www.pretotyping.org ) 

Pretotyping is a concept developed by Alberto Savoia (http://www.albertosavoia.com) It enables teams to ‘fake it before they make it’. This limits the cost of failure and dramatically increases the number of ‘experiments’ that an organisation can conduct in a given amount of time/money. Organisations can choose to scale up only initiatives that are proven to work. The pretotyping mentality can be applied across the organisation.

5. Design the organisation for collaboration, plan for serendipity.

http://www.thefutureorganization.com/design-collaboration-plan-serendipity/ Engineer ‘informal’ and ‘unrelated’ interaction.

Failure is as big a driver of personal success as business success.

For an interesting perspective on failure as a driver of personal success see Scott Adam’s interview herehttp://online.wsj.com/news/articles/SB10001424052702304626104579121813075903866