Shankar Meembat

Entrepreneur and Business Leader

What’s a plan worth ?

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“A plan is only worth the paper it is written on” – that is a phrase I came across in an internal newsletter from our unit head. So not worth much, you would think.

If you are like me, an action person who just wants to get things done, that statement would be very welcome. Now, I had a reason to really not spend time on planning.

But it was the words that followed that I then took heart to and thirteen years since I first saw that note, something I still remember. And those words were (not an exact quote) – “but the process of planning is worth its weight in gold”.

And that rings true. How many times have we asked our team for a plan and been satisfied as long as something was presented ? Any new venture does not get a backing without a well laid out plan. But, this piece of advice that I had a long time back has shaped the way I approach any plans that I review.

As I wrote in a blog post a while back, in business it is all about being approximately right. Given the uncertainty of the parameters on which decisions are to made, one can be assured that the assumptions will change as soon as execution gets under way.

So, what I look for in a plan that comes across my desk is really for the rigor in which it has been drawn up. The alternatives that have been considered, the sensitivities against the assumptions.

And that clearly sets apart a good plan from the bad.

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Can you buy Tiny Media

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Tiny media, as Seth Godin talks about in his blog post,  refers to the bloggers and tweeters out there.

The value of this media is undeniable. There are multiple reasons. Most of them tied to the basic notion of human trust. Bloggers and tweeters are seen as peers to anyone looking for information. And hence get a similar level of confidence as you one would from one’s own friends.

The disucssion about spending money to scale this media did strike a chord with me. To be honest, I have seriously considered doing that myself.

While I agree with Seth’s overall premise that this is a media that cannot be bought, neither does it mean that you do not need to spend money on this. Especially when you  are starting off new and do not have a set of followers, there is a need to spend money in not too dissimilar a manner as the other horsemen of media.

For the fourth media to promote you, you first need to be noticed. And that would need one to hire media. And that needs to be targeted in much the same way as any other media buy. Objectives need to be set, monitored and optimised.

Once some bloggers and tweeters have noticed and mentioned you, media buys can also help get that across to a larger audience, amplifying the impact.

So, while the fourth media cannot be bought, spending definitely can help.

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Learning from Monopoly

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The simple game of Monopoly (game by Electronic Arts) that I have on my Nokia N8 gives some good lessons in Strategy.

Yes, it is a game of chance since the outcomes depends on the roll of the dice. But isn’t business the same too – it is a roll of different situations – macroeconomic, competition, suppliers, etc. Most of these are unpredictable.

So, does that mean being successful in business is all luck.

Absolutely not. As in the game of Monopoly, it is a matter of choices. As the dice rolls, you have choices to make – which ones to buy, which ones to pass on. Once you have acquired properties, you need to make another set of choices – build all uniformly or focus on one. And so on.

Sounds familiar ? It is the basic decision that needs to be made in any business – focus or diversify. And it is not an easy choice. Diversification means greater chances of lower income. Slow and steady to build up your assets. Build up on only one property and the returns on investment rise exponentially with each house you build. But the chances of getting that income is lower.

Play this for a few times and the maxim of returns vs. risks comes true. Between the two choices, the focus strategy has the clear edge. Put most of your investments into a single property tends to lead to success more often. But it is risky, when you lose, you lose big.

And one other thing. Playing against the computer a few times gives you a very good idea of the opponent’s techniques. Makes it much easier to win. Two lessons – effort spent in studying the competitors will pay off. But more importantly, you need to keep constantly disrupting – otherwise, you will be studied …

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Product Portfolio strategy

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Recently I had the pleasure of talking to a number of start-up CEOs. I was trying to understand what they were doing and why they seemed to have a very diverse set of offerings in their portfolio.

You can imagine the common rationale that came through. Quite high on the list was that there was a variety in demand, hence a need for variety in supply. Right. More logical was the reasoning that they were unsure what would be successful – i.e. hedging their bets, exploring options, etc.

Later, I was having  a discussion amongst friends who were working for larger MNCs. When the topic on Product portfolio came around, it was interesting. The logic on product decisions did not seem very different from those of the start ups. Maybe not all that suprsing – a business is a business after all.

This brought an interesting thought – if everyone is doing portfolio planning pretty much the same way, there should be an opportunity for a company to be successful by not doing a portfolio strategy at all. That could be a crucial differentiator.

That was an exciting thought. Ah, I thought, maybe I could find a career with a consultancy practice around this :-)

Unfortunately, then came the wake up – isn’t that what Steve jobs is doing (and successfully, I may add). No product portfolio. Each product designed not to fit a category or a segment. Rather, Apple creates the segment.

Yes, it is still portfolio management, but you are not managing the products, rather you are managing your customer segments.

And that is what portfolio management truly should be about – not about creating the right products, not about selecting the right projects, but each pall about creating a new market.

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Managing growth

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Nokia CEO, Stephen Elop’s burning platform memo and Cisco CEO John Chamber’s internal memo highlight examples where companies have fallen victim to their own success. 

Every business wants to grow year on year. Is there a saturation in growth, though ? Is saturation the easily explainable reason for these challenges ?

While one might be tempted to attribute stagnation to the finite market size growth, I believe we need to look elsewhere for answers.

Put very simply, the competences, the structure, the approach needed for success varies as the business size changes. So, it is not surprising that companies stumble when they grow beyond a certain size. A small company thrives on risk takers (downsides are lower), needs multitude of ideas and has growth prospects for everyone. And when the company grows large – what happens ? Risks need to be more calculated as downsides are higher, overheads increase bringing inefficiencies and corporate ladder structures are established.

Nothing short of a substantial changeover, natural or forced, will put the company back on growth. And not without a painful slowdown in between.

Nokia has a new CEO now, is it Cisco’s turn next ?

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Leading by Example on social

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Given that my job requires my team to be responsible for interacting with a community (developers) that is social savvy, I have been wondering the implications of the same on my personal participation in social media.

The recent 1000 heads article (Leading by example) provided some serious food for thought.

Clearly, we  ”listen” to the social media. As a company, we do respond too. So, then it is about personal involvement.

The article discusses the pros and cons pretty well. Personally, I think the final decsion is going to be based on whether I add value to the conversation. Not all topics that I am interested in following are necessarily my area of expertise. So I would not join in based on my “role”, but much rather on whether my expertise is in line with the topic.

While it is not possible to totally disregard the company/role dimension, joining in only in specific areas of expertise makes it more personal than corporate.

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Being approximately right

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Decision making in business is 80% gut and 20% fact. Facts and data are important. Business plans, forecasts, ROIs, etc. are all critical parts of decision making. But, breakthroughs, by definition, cannot happen based on facts. If the future is predictable and can be modelled, then we can’t have breakthroughs.

In our pursuit of these factual information, often to present to the management or other decision makers, we tend to miss this simple fact – the output is dependent on the input. Or simply put – Garbage in, Garbage out.

We all know how underestimated the market potential of computers or mobile phones were. I worked for a company in Singapore that was bidding for a mobile licence. We had a great foreign partner, the leading mobile operator then. After going through all the numbers and the business case, our partner decided that the company would not be viable. Today, we have three mobile operators in Singapore and doing reasonably well, thank you.

While heading a product program a few years back, I needed to include a business modeling tool in my sales pack. I looked amongst other units in the company and found that we had an expert in this field. In fact, he had been working on a business modelling tool for a while. I found he had a wonderful excel tool with over 10 sheets, 100s of input parameters and complex calculations. He had used the model in a number of cases and was proud of the level of accuracy in the predicted outputs.

I picked it up and played around with it for a while. And decided to apply it to my own needs. That is when I found that the majority of inputs needed to be estimated. What would be the take up of the service ? How long will consumers use the service, etc. I could make a guess based on other reference services, but it would remain exactly that – a guess !!

So, I had this wonderful tool that churned out some great outputs based on rather shady inputs. Essentially, I was getting accurately wrong outputs. And for my customers to make their decision, these outputs contributed only to the 20% part of the decision making. What they needed were sensitivities – the effect of changes in input assumptions, not necessarily the exact single point solution.

In short, they needed information that was approximately right rather than accurately wrong !

And this might be useful to remember when in an heated conversation with spouse. You don’t want to lose an argument by being accurately wrong :-)

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Management Tips & Tricks

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Why tricks ?

Well, because I believe many of these thoughts are going to elicit the reaction – “that is no brainer”. Precisely the kind of reaction one would have when a magician’s methods are revealed.

But honestly, I am facing writer’s block. The thoughts are swirling in my head and I can form the sentences in my mind, but when I start typing, they seem to disappear into thin air. I am trusting that if I keep up these introductory posts, the rest of it will follow :-)

Here are some thoughts I hope to build on in the coming days, weeks, months :

- Being approximately right is much better than being accurately wrong

- Matter can neither be created nor destroyed. This is applicable to far more areas than physics. It applies to your business too in terms of sales, profits, customers, etc.

- A corollary to the above is that business is a zero+ sum game. There is the + in all business, but that does not come easy.

Well, that is a start … And something to continue building on

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