Jugaad: Innovation

Just finished reading a book called: "Jugaad Innovation: Think Frugal, be flexible, generate breakthrough growth" by Navi Radjou, Jaideep Prabhu and Simone Ahuja. I picked the book just after reading the word Jugaad, as it holds special meaning for me having grown up in Mumbai. The following are notes I took from the book. All ideas and thoughts are purely owned by the authors. As always, my notes are for me to read again and I recommend reading the book rather than thinking of my notes as a replacement to this good read.

From the foreword:

"My Mantras unfold like this: be purpose inspired; change comes from the edge; devote yourself to world-changing ideas; emotions lead to action; creativity overcomes scarcity; in tough times, you need to win ugly." - Kevin Roberts

"Having crazies with purpose on your side is great;having unguided crazies is not" - Kevin Roberts

Notes:

The book lays out the following principles for cost effective innovation practices -

1) Seek opportunity in adversity

2) Do more with less

3) Think and act flexibly

4) Keep it simple

5) Include the margin 

6) Follow your heart

Some quotes from the book:

• "It has done me good to be somewhat parched by the heat and drenched by rain of life" - Henry Wadsworth Longfellow
• "If I had one dollar to spend, I would invest in solving the biggest problem today - the economics of scarcity." - Jeffrey Immelt
• "One cannot alter a condition with the same mindset that created it in the first place" - Albert Einstien
• "I would not give a fig for the simplicity on this side of complexity, but i would give my life for the simplicity on the other side of complexity" - Oliver Wendell Holmes
• "We need a system of inclusive capitalism that would have a twin mission: making produts and also improving lives for those who don't fully benefit from market forces" - Bill Gates
• "Your time is limited, so don't waste it living someone else's life. Have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary" - Steve Jobs

Now, some of the noteworthy thoughtful sentences from the book:

• Jugaad: is quite simply, a unique way of thinking and acting in response to challenges; it is the gutsy art of spotting opportunities in the most adverse circumstances and resourcefully improvising solutions using simple means.
• The structured approach for innovation is too expensive and resource consuming
• Structured approach for innovation lacks flexibility. Factory processes are like a straitjacket: once you get in, you are stuck, and when things start to change, you can't move. Positively deviant behavior and ideas are what actually drive game-changing innovation.
• Structured approach for innovation is elitist and insular. Innovation is not invention, its the conversion of new idea into consumer delight and ultimately, into revenues and profits. If an idea or technology cannot be successfully commercialized, its not an innovation. In an interconnected world powered by social media, the intellectual property that one can buy isn't the only source of new ideas. Finding, sharing, and integrating globally dispersed knowledge among all levels of employees is just as important.

Principle One: Seek opportunity in adversity

• Instead of giving to the problem, jugaad innovators focus on finding a solution to it.
• These are some ways Jugaad innovators seek opportunity in adversity
• A hard environment nurtures resilience: When confronted with adversity, they don't retrench but embrace the difficulties and learn from the experience. Armed with resilience, perseverance, and a willingness to learn, jugaad innovators strive to respond to the harsh world they face and find opportunities for growth and expansion in it. In doing so, they are able to create a better world, not just for themselves but also for their communities.
• Reframing the half empty glass as half full: Jugaad innovators find opportunity in adversity in three ways: reframing challenges as opportunities for growth, making constraints work for them, and constantly adapting to a changing environment by improvising solutions to challenges they face along the way. Jugaad innovators don't find opportunity in spite of adversity; for them, adversity often is the opportunity. They perceive constraints not as a debilitating deterrent but as a creative stimulus. Indeed, their creative juices begin to flow when they are confronted with a seemingly insurmountable challenge. The second way jugaad innovators find opportunity in adversity is by making constraints work for them rather than against them. Third way the jugaad innovators seek opportunity in adversity is by being quick to act in response to the opportunities they see.

Why Structured Innovation processes fail to seek opportunity in adversity?

• The processes fail to notice or ignore adversity until its too late.
• They try to tackle adversity head-on, rather than seeking to leverage it.
• They address new problems with old frames of reference.
• They think small (six sigma) when facing big challenges.

How can structured processes be changed to capitalize on adversity and use jugaad innovation as complimentary tool to the existing processes?

• Recognize that glass if always half-full: The key to doing so is being able to reframe challenges as opportunities and use constraints as a spur to innovate
• Realize extreme conditions are fertile soil for extreme innovation.
• Build psychological capital to boost confident resilience: The true value of a company is no longer its tangible assets or even its technological processes: it lies in its human capital and underlying psychological capital - neither of which is open to imitation. Anyone can buy technology or obtain money from financial markets but we cannot buy motivation, engagement, confidence, resiliency, hope, optimism.
• Approach big challenges with a growth mindset: This is critical because when leader face adversity with a fixed mindset, their minds are clouded by fear or pride, they tend to innovate incrementally, and their efforts yield limited results. A growth mindset instead helps leader approach even big challenges with optimism and curiosity - enabling them to generate breakthrough innovation that delivers more sustainable results in the long term. Specifically, those with a growth mindset are willing to let go of old business models and embrace new ones to maintain long-term success.
• Tap the power of networks to tackle big market threats: Rather than deal with adversity by relying exclusively on internal resources, corporate leaders can benefit from working with customers, parters, and even competitors to cocreate innovative solutions.

When you listen to customers, you merely engage with customers, you merely react to needs; when you empathize with customers, you anticipate their needs; but when you truly love your customers, you surprise them by introducing them to products they couldn't even fathom.

Principle Two: Do More with Less

• Scarcity is the mother of invention: To even a casual observer, the most string thing about jugaad innovators in emerging markets is their frugal mindset. These entrepreneurs and managers - whether they come from Argentina, Brazil, China, India, Kenya, Mexico, or the Philippines - are constantly looking for new ways to do more with less and deliver greater value to customers at a lower cost. What makes this mindset so fundamental to jugaad innovators, and why are they so good at getting "more for less"? Such a mindset is a rational response to pervasive scarcity in their environment. For jugaad innovators being frugal is not a luxury - its the key to survival.

Being resourceful in a resource scarce environment:

• Jugaad innovators are able to get more from less by applying frugality to every activity they perform at every step along the value chain. They are frugal in how they design products, how they build them, how they deliver them, and how they perform after-sales maintenance. Their frugality shows up not only in their parsimonious use of capital and natural resources but also in how they maximize their limited time and energy: rather that doing everything themselves, they rely extensively on partners to perform various operations, thus saving time and energy. The following approaches employed by jugaad innovators to gain more from less:
• They reuse and recombine: Rather than creating something entirely new, from scratch, jugaad innovators are more likely to reuse or seek new combinations of existing technologies or resources both to come up with new solutions and to commercialize them in markets.
• They remain asset light: A second strategy that jugaad innovators use to get more from less is to leverage the capital assets of others to scale up their business model. Thus, instead of owning of owning physical assets, they rent or share them. This approach not only makes their cost structures lean but also allows them to quickly scale operations up or down to meet shifts in demand without investing in additional sales.
• They leverage existing networks for distribution: A third "more with less" strategy that jugaad innovators use is focused on solving the "last mile" problem - that is, the difficulty of reaching far-flung customers in an economical way. Rather than investing in expensive logistics networks, jugaad entrepreneurs leverage existing networks to cost effectively deliver their products and services to people in hard to reach markets. In particular, they reply on grassroots partners in local communities to reach more customers and personalize their offerings for them. These grassroots distribution partners are often micro-entreprenueurs themselves. By building on already developed and trusted social networks in emerging markets, jugaad innovators can compensate for the poor state of the physical infrastructure there. More important, by enrolling grassroots entrepreneurs as their channel partners, jugaad innovators drive their own financial sustainability while also creating new economic opportunities in local communities.

Helping customers get more value: Unlike their counterparts in the west, they do not typically focus on wowing customers with products that have cool features or the latest technologies. Instead, they pursue functionally minimalist solutions that offer superior value to customers - often transforming their lives in the process. Simply put, they help their customers get more value for less cost by offering them quality products and services at highly affordable prices. Also, rather than considering these questions in the abstract in R&D lab, jugaad innovators spend time in the field, observing and interacting with potential customers to identify their latent needs and requirements. Only then do they zero in on the essential features of a solution that most relevant to their unique customers.

How western companies can find abundance in scarcity:

• Tie senior management's compensation to frugal performance: One way to do that is by linking senior executives compensation to performance metrics aimed at driving frugality for betterment of people, planet and profit.
• Senior management must challenge R&D to do more with less: This will happen only when engineers and scientists are offered challenging projects that give the incentive to do more with less. The guidelines should be of more with less for creating modern, reliable and affordable products and services.
• Marketing executives should create separate brands for their affordable offerings.
• Create incentive systems for salespeople to sell affordable products: companies can address this issue by reorganizing their sales forcer along brand lines, with different salespeople responsible for low-end and high-end segments.
• Design affordable solutions from ground up.
• Engage eco-aware consumers in the sustainability dialogue: Frequently, participants in the user communities are young frugal, and environmentally conscious. They aren't just looking for a deal; they're searching and willing to champion products that fit into personal value system. These consumer communities can help build brands they favor, or cause the demise of brands they disapprove of.
• Partner Extensively: Partnering with key external players offers a powerful way for companies to get more out of their limited R&D dollars. Partners can cost-effectively bring companies better ideas than they already have, help companies develop existing ideas more efficiently, or enable them to commercialize these ideas more extensively and at lower cost.

Principle Three: Think and Act Flexibly

• Jugaad innovators adapt to survive: The sheer diversity, volatility, and unpredictability of comic life in emerging markets demands flexibility on the part of jugaad innovators. It demands that they think outside of the box, experiment and improvise: they must either adapt or die. In many ways, this diversity, volatility, and unpredictability also enables flexible thinking and action on the part of jugaad innovators.

Some of the ways jugaad innovators act flexibly are:

• Jugaad innovators think the unthinkable: There is mind boggling diversity in emerging economies. The heterogeneity of populations in these markets demands unconventional, non linear thinking. Jugaad innovators therefore dare to challenge many ingrained beliefs and turn conventional wisdom on its head.
• Jugaad innovators don't plan - they improvise: Emerging markets are characterized by high volatility. Eominic circumstances are constantly changing. Growth rates are often in double digits, and the competitive landscape is often shifting. New laws and regulations are constantly being put into place, and policy is constantly evolving. So jugaad innovators need to experiment as they go along and be willing to try multiple options, rather than adopting one approach at the start and sticking to it thereafter. Jugaad innovators do not attempt to work everything out in advance or rely on a business plan to determine the mid-to long term roadmap for their new ventures. Instead, they improvise their next course of action as circumstances change, and they do so from within a framework of deep knowledge and passion. Given their propensity for improvisation, jugaad innovators don't reply on forecasting tools like scenario planning, as many western companies do, to assess future risks. They believe in Murphy's law - anything that can go wrong will go wrong - so whats the point of anticipating every single obstacle that might appear down the road?
• Jugaad innovators experiment with multiple ways to reach a goal: Jugaad innovators may have a single minded vision of where they want to get to, but they must be willing to try different paths to get there. Specifically, they must be willing to keep experimenting in order to attain their goals - and they must be flexible enough to quickly switch from one path to another along the way.
• Jugaad innovators act with speed and agility: By demonstrating agility, jugaad innovators can deal with unanticipated challenges faster and seize unexpected opportunities - such as changing customer needs - more swiftly than their competitors.

Learn to improvise:

• Break rules and shift values when necessary: Even conventional beliefs and values have a shelf life: there is nothing eternally wise about them. Breakthrough innovation occurs when commonly held beliefs and values are challenged, not reinforced.
• Don't let inflexible investors and customers dictate your innovation agenda: Because external stakeholders often tend to be conservative or lack the perspective to appreciate vision of foresight, it is probably best not to seek their validation for bold new products and services.
• Create time and space for employees to improvise and experiment: Companies can hardly expect employees to thin flexibly while they maintain their regular routine and operate in their usual work environment. To be able to think and act flexibly employees need dedicated time and an inspiring sale to experiment new ideas.
• Get outside your comfort zone to gain new perspective: To truly think flexibly, managers need to be taken out of their comfort zones and exposed to new situations that challenge them differently.
• Partner with flexible thinkers: Sometimes the best way to develop a new mindset is to seek inspiration from outside your company. Thus one way to nurture flexibility is to partner with other companies that are already flexible and agile.
• Experiment with multiple business models:  Often companies become to attached to a successful business model and find it nearly impossible to let go of it, let alone to explore alternative options. But competition can spring from unexpected corners and disrupt your business model overnight. Flexible thinkers keep all options open and experiment with multiple business models simultaneously.
• Fail cheap, fail fast, fail often:  A corollary of the willingness of jugaad innovators to continually experiment is their willingness to fail cheap, fail fast, fail often.

Principle Four: Keep it Simple

Practical benefits of simplicity: Simple products offer three advantages to jugaad innovators

• They are cheaper to make and therefore more affordable
• They are easier to install and maintain
• They can satisfy wider audience

Jugaad innovators follow Albert Einstien's exhortation to "make everything as simple as possible, but not simpler" In other words, jugaad innovators don't necessarily try to simplify the nature of the problem the customer is facing. Doing so runs the risk of producing simplistic solutions, ones that may appear simple in the short term but prove ineffective in the long run. 

How to simplify you products and your organization

• Redesign entire organization around simplicity:  A customer may love the ease of use of a firms products but hate the convoluted sales process she has to go through to but the product. Companies must therefore simplify every interaction with their customers throughout the product lifecycle - from the initial purchase to the actual use and even to the products disposal by streamlining not only their R&D and manufacturing but also their sales and customer service processes.
• Distill customer needs to their bare essence and design simple products around them:  Simplicity advocates insist that "user centric design" boosts the ease of use of products and services.
• Design simple offerings from the ground up:  Rather than stripping down existing high end products that is, defeaturing them - companies need to design and build products from the ground up so they trull embody the spirit of simplicity.
• Embrace the universal design philosophy to boost the usability of offerings:  Universal design is a philosophy that celebrates humanity's diversity and exhorts companies to design products that are usable by as many people as possible.
• Get engineers and industrial designers to work together:  Companies must recognize that incorporating simplicity upfront during the product conceptualization phase is several times most cost fictive than doing it as an afterthought in later stages of development process.
• Simplify product architectures and reuse platforms across products:  R&D engineers are like craftsmen: they often like to create their own technologies or components from scratch, even if comparable technologies or components are readily available in the market. But this "reinvent the wheel" approach often leads to long product development cycles and results in expensive, overengineerd products.
• Make it simple, not simplistic:  Simplicity if often the most powerful antidote to complexity. But simple does not necessarily mean simplistic - realistically, complexity can be neither ignore nor avoided. Rather, innovators must embrace the complexity of a problem and then find a simple way through or around it.

Principle Five: Include the margin

• Inclusion: A moral imperative that makes business sense: There is an upside, however, to this widespread scarcity: millions of excluded citizens equals millions of potential customers. For entrepreneurs willing to rise to the challenge, the choice to include the margin promises many potentially lucrative opportunities to build entirely new businesses. Exclusion cannot be addressed with one-size-fits-all approach - wherein, for example, a single product or service serves the majority of the population - an approach that is often favored by large corporations. Instead, inclusivity requires an approach to innovation that is sensitive to individual differences and local circumstances. The intellectual and creative challenge of serving the diverse needs of a large number of people in an economical way is a great spur to jugaad innovators. Deepening interconnectivity in emerging markets both amplifies the sense of exclusion and offers interesting ways to reduce it. This ability to see what the world has to offer drives them to aspire for better and more things.
• Co-Creating Value with the Margin:  Jugaad innovators know how to employ for-profit business models to bring about social change. Jugaad innovators work with these traits to successfully reach the excluded in the following ways:
• Approaching marginal groups as whole new markets:  Jugaad innovators don't merely treat marginal groups as one more segment on which to dump their existing products. Instead, they approach marginal groups as whole new markets that need to be server with entirely new business models.
• Helping everyone climb up Maslow's hierarchy of needs:  Jugaad entrepreneurs recognize that even low-income consumers have high aspirations and are eager to climb up Maslow's hierarchy of needs. Jugaad innovators do not, therefore, short-change low-income consumers on quality: they know that although these consumers are lowe earners, they are high yearners. As such, jugaad innovators strive to offer marginal segments products of value that are nonetheless affordable.
• Cicreating value with customers and partners throughout the value chain:  Jugaad innovators don't view customers as merely passive users of their products and services. Recognizing the diversity of customer needs, they invent new solutions from the ground up by working closely with marginal groups to identify their unique needs. They then engage local communicates and partners to set up a grassroots value chain to locally build, deliver and support their solutions - making these solutions in turn affordable, accessible, and sustainable.
• Scaling up personalized solutions with technology:  Jugaad innovators cleverly employ technology - especially mobile computing - to reduce the cost of delivering services to marginal segments.

• How to make big margins by including the margin:
• Carry out social inclusion with a business mindset:  Non profit CSR programs that serve marginal groups are redundant if your company is also string to meet the needs of the same groups using a for-profit business model - just as jugaad innovators in emerging markets are doing. To avoid such corporate cultural schizophrenia, Western corporate leaders need to pull the plug on their CSR efforts and get serious about social inclusion by making it a strategic business imperative for all their departments and senior managers.
• Cater to the expanding low income western consumer base: The economic downturn is set to keep the financial squeeze on middle-class Americans and Europeans for some years to come. This hollowing-out of the middle class means that western companies that traditionally served this mainstream market will need to radically shift their innovation strategies - or lose out to low-cost rivals. Rather than spending R&D on premium products with high end features, these companies will need to create value for money products that are accessible to the growing low income consumer base in the US and Europe.
• Create an inclusive work culture: Companies must strive to foster and open and inclusive culture anchored by a participative management style. This helps to foster a creative and motivated workforce, on that can tap into different domains of expertise in devising new products and services and that feels empowered and encouraged to do so.
• Recognize that marginal segments are not marginal minds: By labeling marginal customers and employees "too poor" or "too old", companies lose an opportunity to tap into the rich knowledge and wisdom these marginal groups might contribute to the organization.
• Use technology to lower the cost of inclusion:  Just like jugaad innovators in emerging markets do, rather than invest in expensive brick and mortar delivery infrastructure, western companies need to harness the power of social media, cloud computing, and mobile telephony to cost-effectively deliver their products and services to marginal consumers.
• Partner with non-profit organizations:  A new generation of non-profit ventures is willing to work with businesses to cocreate for profit business models that improve the lives of marginal citizens while also generating a profit.
• Secure C-level buy-in to drive systemic business model changes:  Given that inclusivity requires fundamental and systemic changes in how companies operate, top managements commitment is vital to enabling and sustaining such business model transformation within companies.
• Adopt and adapt proven best practices from emerging markets: As we described earlier in this chapter, emerging markets - because of scarcity, diversity and interconnectivity - are increasingly a breeding ground for solutions that include the margin.
• Embrace inclusive design principles:  It is easier to factor in inclusivity up front, during the design phase of innovation, rather than to try and retrofit or reengineer existing products and services to appeal to marginalized segments of the market after the fact.

Principle Six: Follow your heart

Jugaad innovators in emerging markets rely more on their intuition than on analysis to successfully navigate and highly complex, uncertain, and unpredictable environment. They use their gut intelligence and innate empathy for customer needs to innovate breakthroughs that defy conventional wisdom. Their undying passion acts as the fuel that sustains their efforts to make a difference in the lives of communities they serve.

• Your heart knows what your mind doesn't:  The heart is the seat of passion, intuition and empathy. Jugaad innovators in emerging markets possess these qualities in abundance. The challenge is twofold: how to develop these qualities in the first place and then how to nurture them. We have found that several key aspects of the complex environment in which jugaad innovators operate make them particularly passionate, intuitive and empathetic. Whatever they may be, these extreme conditions arouse the empathy of jugaad entrepreneurs, who feel they must do something to improve the often harsh conditions around them. Thus jugaad innovators don't just sit around after witnessing others pain; rather, they convert their compassion into passion by seeking solution to alleviate the pain. Another reason why jugaad innovators follow their hearts - more than their brains - is that they are forced to think on their feet all the time. Its hard - even counterproductive - to logically analyze a highly complex situation and make rational decisions when things are changing constantly. Emerging markets are fast paced and volatile. Confronted daily with do-or-die situations, jugaad innovators have learned to make decisions on the fly, using their well honed intuition rather than relying solely on analysis and logic. The harsh conditions in emerging markets kindle jugaad innovators creative empathy and passion, and the unpredictability of the local environments forces them to make rapid fire decisions based on intuition than rational analysis.
• Why do industrial era business practices keep hearts locked out:
• R&D: Isolated and disconnected from real world customers:  R&D engineers who operate in isolated labs do not spend time immersed in the world of customers and thus cannot empathize with them.
• Firms often seek refuge in numbers and shun innovation:  The business world abhors surprises and craves predictability: forecasts, plans, and budgets are all meant to "control" the future and confer a sense of stability - leaving no room for intuitive improvisation.
• Marketing executives don't emotionally connect with customers:  Age of now it is all about the mastery of emotional communications; not manipulation, but of having relationships. In the age of now its all about the single question consumers ave of you: 'How will you improve my life?' Answering this is to deliver priceless value.
• Outdated human resource management doesn't engage next generation employees:  Companies continue to rely primarily on financial incentives to motivate their employees rather than giving them the space and time to pursue their passion in a constructive manner.

• How western firms can follow their hearts?
• Send senior management to "empathy development boot camps":  Empathy is like a muscle; it can be developed in senior executives by exposing them to diverse perspectives.
• Ignore market researchers and investors to innovate radically:  C-Level executives need moral courage to follow their hearts and this often entails ignoring market researchers and investors when it comes to disruptive innovation. Specifically, to avoid getting caught in an inflexible web of structure and demands for data, senior executives shouldn't rely solely on the approval from external stakeholders when launching truly disruptive products and services.
• Embrace customer centric design principles:  R&D engineers and scientists need to get out of their labs and immerse themselves in the environment that surrounds their customers, to truly understand their needs: this is the basis of customer-centric design.
• Engage your customers in a heart to heart conversation:  Researchers in fields from nueroscience to psychology, behavioral economics to marketing, all agree that emotions are as powerful a driver of consumer behavior as rationality and calculations. In many cases emotions may even be the only driver of consumer behavior. In others, they may be more dominant. In still others, the emotions may play a complementary and reinforcing role to that of reason. All this has profound implications for CMOs and marketers more generally. In a world where brands have achieved parity on features, price, distribution and even design, engaging customers' emotions becomes a crucial way for marketers to differentiate their offerings from those of others.
• Create "Center of passion" across your organization:  Firms must empower employees to publicly share and discuss ideas they are passionate about - however controversial and disruptive these ideas may be. And to bring those ideas to life, they must help build communities of customers and partners around them.

All of the above are good principles and the authors did not suggest that companies should completely shift to jugaad innovation but compliment the innovation process with Jugaad thought process. Places where jugaad will work for sure are:

• Markets with rapid changes
• Markets with resource scarcity
• Markets with frugal and diverse customers
• Markets with industry immaturity
• Markets with exploding interconnectivity

Analysis nugget: SEO/SEM Conversion Optimization

Create a process for maximizing search campaign conversion and traffic. Focus on specific target sites and keyword campaigns. Analysts can easily chose a single domain and set of keywords and generate reports on demand to assess the impact of bidding strategies before rolling out the strategy to other web properties.

Identify top-ranking SEO keywords that also have high corresponding SEM ad spend and watch onscreen in real time the impact of modifying bids to lower levels. With continuous monitoring and analysis the analysts can confirm the impact on total conversion and revenue resulting from changing SEM bid rules and repeat the process for all integrated keyword portfolios, across sites and domains. Once keyword campaigns are optimized, marketers can watch for emerging website traffic trends, increases in conversions, and conduct customer pathway analysis to further refine campaigns to be more relevant and drive higher conversion.

Addition: In response to the comment. My post wasnt suggesting that SEM is not required. This was just one of the many ways of performing analysis and improving conversion.

Commander's Intent

Why is Commander's Intent So Hard to Implement in Business?

This is a snippet that I am plagiarizing from the book: Repeatablility.
How can it be that hard to align the front line around the core ideas of the business? the same as the management team? Here are some key obstacles that seem to get in the way of shortening the effective distance between management and the front line that is serving the customer:

• "The customer is a number, not a person." Insulated by phone menu options and distant call centers, senior management can easily spend less and less time interacting with customers, and especially ultimate end users.
• "The thin blue line of customer care." When customer care and after-service is viewed as an expense to be managed down you have a problem.
• "Sales are the other guys." Some businesses have cultures that devaluate the sales and service roles, as opposed to exalting it as the eyes and ears on the ground, as the intelligence function about customer needs and competitive offerings.
• "Tyranny of fuctions." In some companies, internal functions become service centers for other internal customers, creating an entire internal ecosystem with a life of its own independent of the customer and the value that these functions actually create that the customer would pay for. If you are having too many internal meetings, and if this accounts for more than 10 percent of your time, then you might have this problem
• "Myth of stakeholder priorities." When customers become one of a long list of stakeholders in the queue of competing company priorities, customers can become undervalued, and the gap between senior management's mentality and the market reality at the front line increases.
• "Layered organizational complexity." Organizations add complexity when they grow, especially in absence of repeatable formula. Addressing complexity with complexity has effect over time of disconnecting top management from the front line and turning major decisions into a fuzz ball of committees where no one really knows who decides. This is how complexity kills speed, responsiveness and ultimately growth.

Repeatability

I have always been a great proponent of repeatable processes. In my previous jobs have worked at companies which have well thought out processes and no so well though out processes. I always thought that having clearly defined and documented processes are always important and that takes care of repeatability. I just finished reading a book called Repeatability written by Chris Zook and James Allen and turns out that repeatablity is something that needs to be in the DNA of the organization as opposed to just blindly documenting day to day activities in the business. Also, repeatability is about having an organization on the front line which knows how to clone the management thinking and map that to their individual tasks.

Some of the notes I took from the book are documented here. The book does a really good job at establishing the thought process and thus my notes cannot possibly help in replacing the reading.

Core principles of repeatability

1. Principle 1: A strong, well differentiated core
2. Principle 2: Clear non-negotiable
3. Principle 3: System for close loop learning

As I said in the preamble of this blog entry, its easy to misconstrue what repeatability:

• It is not the performance of a repetitive task like a robot. We are talking about the essence of a business requiring constant judgment, but needing some consistency in order to drive learning[Repeat things]
• It is not mechanical replication everywhere of a business concept[Repeat things globally across geographies]
• It is not an endless to-do list handed down to every frontline employee. This form of repeatability suppresses feedback and is demotivating and soulless.[dumb workforce]
• It is not the repeatability of nonstrategic functions. Every company has critical functions in finance, tax, real estate - essential enablers.

The reason any business looks for great repeatable models is to deliver enduring advantage, some of the high level principles to deliver sustainable advantage are:

• By compressing the distance between management and the front line
• By deciding better and faster
• By mastering the art of continuous improvement

Strong differentiated core

Three components of a well differentiated core:

1. The source of differentiation and the activity system that supports it
2. A well-defined method to repeat success in new situations
3. A set of target markets and segments in which to reapply your model

Some questions that senior executives can ask themselves about the business:

• What are your primary sources of differentiation?
• Are the differentiators gaining in strength or waning in strength?
• How do you know about the performance of differentiators?
• Does the full management team agree on the differentiators? Would frontline employees have the same list? If not why?
• What is the success rate from extending your repeatable model to new markets and situations? What explains the success and failures?
• What will be the key differentiators of the future? Are you building world-class capabilities in areas where you perceive gaps?
• How do all the relevant differentiations reinforce one another?
• How do they work together to define a business model that can be replicated?
• What are the assets and capabilities at the heart of this differentiation?
• What is the full potential of the differentiation and the repeatable model that expoits it? Where can it be best extended? How do you decide?

The non-negotiatbles

Good principles to find non-negotiatbles in the core:

• Connect to frontline actions
• Affect trade-offs with real economic consequences
• Reinforce the strongest competitive advantage
• Can be reapplied in new markets
• Link to rewards and deeper sources of motivation
• Are mutually reinforcing
• Liberate positive energy

Some questions that senior executives can ask themselves about the business:

• Can the strategy be stated in a small number of principles?
• Does the senior team agree with them? Are they shared broadly?
• Are they translated into operating nonnegotiables and routines that drive frontline execution and aid in making difficult decisions?
• What is the distance from the management team to the front line?
• Are you happy with the speed and consistency of the organization?
• What are three most important non-financial measures of the health of your business model? Do you all agree?

Its evident that it its not just important to outline the non-negotiables but also to convey them to the frontline workforce as this enables creative thinking and boundaries that guide the creative thinking. Good read explaining why this isnt anything new would be reading the commander's intent excerpt in the book. Commanders Intent

Closed Loop Learning

Repeatability also demands constantly learning from the best performing differentiators and adapting according to the changing environment.
Sources for learning

• Learning from core customer
• Learning from key operations
• Learning from frontline employees

Some questions that senior executives can ask themselves about the business:

• Does this change strengthen and reinforce our core model?
• What is our future differentiation and how does each opportunity add?
• Can this create a repeatable model for roll-out across the world?
• Does each opportunity add to critical capabilities for the future?
• Do we have the capacity to implement and will it distract from our core business?
• How do the opportunities and threats relate to each other? How do we rank them?
• Is speed of reaction a competitive advantage for you? How do you know?
• How are you set up to react to major threats to part of your business model?
• Are you investing enough in the next-generation business model, in testing and experimenting in search of it?
• Do you track over time the rate of productivity improvement in the core processes across the company? Should you?
• What are your most important types of decisions regarding change and adaptation? Is the process informed, clear and simple? what are inhibitors?

14 lessons from Benjamin Franklin

I usually take notes, but this blog entry was so good that I couldnt help but plagiarize. Thank you! Thea Easterby!!
Original article: Business Insider Article
Benjamin Franklin was clearly a man who knew how to get things done.

Here are 14 action-inducing lessons from him:

1. Less Talk, More Action

   “Well done is better than well said.” Talk is cheap. Talking about a project won't get it completed. We all know people who constantly talk about the things they are going to do but rarely ever take that first step. Eventually people begin to question their credibility. Taking action and seeing the task through to completion is the only way to get the job done.

2. Don’t Procrastinate

   “Never leave that till tomorrow which you can do today.” This is probably one of the first quotes I remember hearing as a teenager. With an impressive list of achievements to his credit, Benjamin Franklin was not a man hung up on procrastination. He was a man with clear measurable goals who worked hard to turn his vision into reality. What are you putting off till tomorrow that could make a difference in your life today?

3. Be Prepared

   “By failing to prepare, you are preparing to fail.” You need a plan to accomplish your goals. Charging in without giving any thought to the end result and how to achieve it, is a sure way to fall flat on your face. Think like a boy scout. Have a realistic plan of attack and a systematic approach for getting where you need to be.

4. Don’t Fight Change

   “When you're finished changing, you're finished.” Whilst many of us don’t like change, others thrive on it. Either way change is inevitable. The stronger we fight against it, the more time and energy it consumes. Give up the fight. Focus on proactively making positive changes, instead of having change merely thrust upon you. Wherever possible, try to view change as a positive instead of a negative.

5. Get Moving

   “All mankind is divided into three classes: those that are immovable, those that are movable, and those that move.” There’s a reason we use the expression, movers and shakers. Movers are the ones who take action, the people who get things done, while the immovable are sitting around scratching their heads wondering how others could possibly be so successful. Which group do you want to belong to?

6. Avoid Busywork

   “Never confuse motion with action.” We are always running around doing things. We rush from one meeting or event to the next, sometimes without achieving a great deal. At the end of the day, how much of our busywork are we proud of? How much of that running around improves anyone’s life (including ours) for the better? Make your motion mean something.

7. Give Yourself Permission to Make Mistakes

   “Do not fear mistakes. You will know failure. Continue to reach out.” If we fear making mistakes, we become scared to try new things. Fear leaves us nestled in our comfort zone. Staying in your comfort zone rarely leads to greatness. Taking risks and giving yourself permission to make mistakes, will ultimately lead you to whatever your version of success may be.

8. Act Quickly on Opportunities

   “To succeed, jump as quickly at opportunities as you do at conclusions.” Opportunities are everywhere. The trick is being quick enough and smart enough to seize them when they arise. Instead of jumping to the conclusion that something won’t work or can’t be done, allow yourself the freedom to ask what if?

9. Continue to Grow

   “Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.” We all have vices of some description. The key is to keep them under control or preferably eradicate them entirely. Be kind to those around you, whether they are neighbors, family, co-workers or friends. Never accept that you have finished growing as a person.

10. Keep Going

    “Diligence is the mother of good luck.” Have you ever looked at a successful entrepreneur or business person and thought how lucky they are? Most of the time, luck has nothing to do with it. Hard work and sacrifice on the other hand have everything to do with it. Successful people deal with failure. They tackle their demons head on. They pick themselves up and keep going.

11. Know Yourself

    “There are three things extremely hard: steel, a diamond, and to know one's self.” Understanding ourselves is not easy. Sometimes we just don’t want to see ourselves for who we really are. It’s much easier to hold onto a romanticized version of ourselves or to simply view ourselves through other people’s eyes. Start by being brutally honest with yourself. Follow through with understanding, compassion and acceptance.

12. Don’t Self-Sabotage

    “Who had deceived thee so often as thyself?” We spend so much time worrying about other people hurting us, yet fail to comprehend the damage we inflict on ourselves. If you are using negative self-talk, lying to yourself or indulging in addictive behavior you are self-sabotaging. Life can dish up enough challenges without us adding to the mix. Be kind to yourself. Treat yourself like you would a best friend.

13. Don’t Give Up

    “Energy and persistence conquer all things.” Achieving our goals can be downright exhausting. There will be days when you want to give up. There will be times when your energy levels flatline and you wonder why you bother getting out of bed. Yet you push forward, day after day because you believe in yourself and you have the determination and strength to back up that belief.

14. Wise Up

    “Life's tragedy is that we get old too soon and wise too late.” Benjamin was definitely onto something with this one. Who hasn’t had the thought - I wish I could know then, what I know now? Unfortunately there is no time machine; there is no going back. The key is to wise up as early as you can to start forging a life of purpose, achievement and happiness.

The Challenge Sales Model: Taking Control of the Sale

Challengers create momentum. Their deals don't get stuck nearly as often in "no-decision land" the way typical core reps deals tend to. This is because a Challenger will push things along, always thinking ahead to the next step.

Three misconceptions about taking control

1. Taking control is synonymous with negotiation

   Challengers take control across the entirety of the sales process, not just at the end. In fact, one of the prime opportunities for taking control is actually right at the beginning of the sale.

   If the contact hems and haws or gives an unclear answer, the rep pushes and explains that if they can't guarantee time with those key leaders, they'll be unable to check that everybody is aligned on the value of the solution, and therefore it doesn't make sense to continue engaging in further discussions.

   Customer invites a sales person to come in, analyze a problem, and generate creative solutions. Many sales organizations will spend well into the six figures to pursue a complex opportunity. All too often, though, the customer engages this free consulting work until the best solution becomes clear, at which point they go shopping for cheapest supplier.

   Complexity in buying process has less to do with bureaucratic hurdles suppliers put in the way of customers - though that surely is an issue in many companies - but with the fact that customers often don't know how to buy. Of course, customers don't lack the basic know-how of buying a complex solution from a supplier, but standard purchasing processes and protocols break down when every solution is unique, touching different parts of the organization. Challengers rather than assuming that customer knows how to execute the purchase of a complex solution - which can be a faulty assumption when it comes to solution selling - they teach the customers how to buy the solution.

   All of this is telling us that Challengers dont wait for price negotiation they take control of the sales process right from the beginning.

2. Reps take control regarding only matters of money:

   Challengers push the customer in terms of how they think about their world and their challenges - as well as the solution to those challenges.

   Commercial Teaching puts the Challenger in a position to take control by bringing new ideas to the table - ideas the customer hadn't thought of before. But customers are savvy and conventional wisdom didn't get to be conventional by being east to topple. There will be pushback, even if the Challenger is armed with compelling insights and supporting data. The Challenger's response when confronted with this pushback, however, is to take control of the debate.

   But taking control of the debate around ideas is critical not just because it shows that the sales rep isn't going to be a pushover, but also because those ideas the Challenger brings to the table are directly connected to the solutions that the supplier can offer to the customer. If the rep isn't willing to convince the customer that the problem is urgent, then he won't be able to convince the customer it's worth solving.

3. Reps who take control are aggressiveL

   People also confuse taking control - that is, the Challenger's tendency to be assertive during the sale - with aggressiveness. But these are actually two very different things. This is the last, but arguably most critical, misconception to address.

   If we think about sales rep behavior along a spectrum, we can array it with "passive" behavior on one end and "aggressive" behavior on the other.

   • Passive:
     • Subverts goals to the needs of others
     • Allows personal boundaries to be breached
     • Use indirect, accommodating language
   • Assertive
     • Direct pursues goals in constructive way
     • Defends own personal boundaries
     • Uses direct language
   • Aggressive
     • Pursues goals at the expense of professionalism
     • Attacks others personal boundaries
     • Uses antagonistic language

   There is a fine line between being assertive and aggressive/arrogant. A challenger rep will always be able to defend their position in assertive fashion.

4. Challenges thrive in ambiguity. They know how to navigate it and understand how it can be leveraged to their advantage. They display a remarkable level of comfort with silence during the customer conversation, as well as with keeping negotiation points and customer objections open and on the table longer than one normally would. It might be a bit of an overstatement to say they "like" tension, but probably isn't that far from the truth.

Challenger Sales Model: Tailoring For Resonance

• What Decision Makers Really Want?

  Split out decision makers from influencers and end users in order to understand what makes these two different types of stakeholders loyal to a certain supplier. Sales experience for decision makers are nearly twice as important as individual influencers. Decision makers think of themselves as buying from organizations, not from individuals.

  The decision maker's sales experience can be greatly influenced by working on the following factors:

  1. Widespread support for the supplier across the prospect's organization: Senior decision makers simply aren't willing to go out on a limb for a supplier on a big purchase - at least not on their own.
  2. Does the vendor's organization provide easy accessibility to their resources?
  3. Is the vendor organization easy to buy from?
  4. How flexible is the vendor in collaborating with other vendors?
  5. Does the vendor provide best value for the best price?
  6. Is the vendor flexible in adjusting to unique product needs?
• Sales rep need to take path to earn decision maker's support one that lays the groundwork with the customer's team - identifying, nurturing, and encouraging key customer stakeholders across the organization.
• Senior execs place higher value on sales representatives knowledge, and procurement places greater value on reps not overstating the value of their product, but that's about it.
• Key to generate "Widespread Support": Influencing those individuals who play a key role in a purchase but don't ultimately sign the check. These influences don't think of themselves as buying from organizations; they buy from people. The key questions these people evaluate sales rep on are:
  1. Do the sales rep demonstrate high level of professionalism?
  2. Are the sales rep able to offer unique, valuable perspective?
  3. Does the sales rep overstate value or understate difficulties of the purchase?
  4. Does the sales rep have knowledge of my business and do they help me avoid landmines?
  5. Does the sales rep frequently educates me on issues and outcomes?
  6. Does the sales rep advocates for me within the supplier organizations?
  7. Does the sales rep improve my professional standing?
  8. Does the sales rep provide credible and compelling data?
  9. Is the rep readily accessible?
  10. Does the rep have understanding of my business? - Helps in shortening the buying cycle.
  11. Does the rep excel in diagnosing my specific needs?
  12. Does the sales rep provide clear guidance on how to evaluate my alternatives?
  13. Does the sales rep exerts pressure to productively accelerate decision making?
• A sales rep should layer the tailored solution in order to make sure that the message is consistent but the solution is tailored. The hierarchy is: Individual -> Role -> Company -> Industry.
• When speaking with various players in a prospects organization sales reps should be able to identify 4 key areas for the person with whom they are talking:
  1. Decision Criteria
  2. Focus
  3. Concerns
  4. Potential Values