Saturday, 1 April 2017

What made you Successful, will make you Fail

I came across an article which runs like this:
Many businesspeople aspire to be as rational, data-driven and deliberate as possible in every action. Nonetheless, everyone has habits, biases, behaviors and thought patterns that have become second nature. These instincts are, of course, grounded in experience. If something has worked for you in the past, you are likely to keep doing it.”
Is it something new? I will say No. We see it happening around daily but most of the times we can’t do much. Reason – ABILENE PARADOX.
So, I feel it is not the Team which can make a Leader fail but his own habits, biases, behaviors and thought patterns.
Perhaps, ‘Thoughtfulness’ is the only medicine to this disease. Business People who once get success following a path need to look for a different path to remain successful. Biases - the most common shackles need to be broken- not easy, but must to take care of organization’s health & life.
Proven now, experience does not provide any guarantee for success. It is losing its sheen, reason -  every business is moving away from routine, repeat activities. Even in repeat activities, one has to be creative and undefined to create Value.


Thursday, 30 March 2017

Buying Behavior based Segmentation and Pricing

Segmentation has been an integral part of modern day management. Every company does some study to segment its customers. It is being used first to know and then satisfy needs of various sets of customers. Under segmentation, demographic differentiation, psychographic differentiation and behavioral differentiation are the focus of product developments and offerings to customers.
Many marketing and business experts perhaps have used this methodology to segment and satisfy needs, but I see a change happening in this field.
Look at the entire lengthy, time-consuming & continuous process of segmentation, so as to know demographic, psychographic and behavioral dimensions of customers. Whereas the entire underlying reason is to meet the need so as to earn more money from customers. Today, customers’ needs, wants and demands are getting blurred. Reason, customers themselves are not clear what they really need. Old theories describe needs as means to live. But today meaning of Living per se has changed. What some see as needs may be a demands for others.
I conclusively see merit in organization moving away from old way of segmentation based on attributes.
Value Proposition - a concise statement of customers benefits, truly reflects not only the value of a product but what value it adds to each customer based on cost, servicing worthiness and price value.
Customers reasonably can be categorized based on their price sensitiveness, cost of serving them and more apparently how poorly they being served by competitors. Therefore, Marketing and thereon Pricing has to be based on Buying Behavior of Customers and not attributes of product/customer.
More often when I look at one-product companies, I see huge challenge in their segmenting product and then finding reasons to charge premium. Commoditization is not the outcome of only easy entry or more & more competition in a segment but perhaps inability of producers to move from attribute based segmentation to value/Buying Behavior based segmentation.
Lastly, Buying Behavior based segmentation will provide much needed distinct grouping of customers for a single product and satisfying customers’ needs more appropriately. This will help further achieving much required – Company Branding and Effective Pricing, leading to sustainable Life to a company and making more & more money. The ultimate aim of a business, perhaps for most?

Saturday, 4 March 2017

Pricing- a victim of IT Revolution

Businesses have undergone tremendous change due to information revolution. Pricing, which was in the hands of producers has shifted into the hands of customers. Today, marking up profit by simply jacking up prices is no longer possible. Transparency, customer awareness and easy modes to compare have changed the whole mechanism of pricing. In older days, margins were decided whimsically by different decision makers leading to various pricing techniques.

I feel that pricing techniques were all depended upon who were deciding them. Cost-Plus Pricing was a long-time favorite to Finance Managers. Likewise, Customer – Driven technique was a favorite of Sales Professionals and Market-Share Pricing Technique was liked by Marketing Managers.

Let’s look at, Cost Plus Pricing Technique. It was decided keeping in view primarily Unit Cost. The notion was that if ‘fixed’ cost is allocated to each unit and a margin is added to it that will give a price for a product; without realizing the fact fixed cost allocations depend on volume and volume changes with the change in price, thereby making it apparent that unit cost is a moving target. It means prices were decided as if they won’t affect volume and vice versa. Here, is the catch - any price increase to cover-up fixed costs can reduce sales and can raise average unit costs further, leading to further price escalation, resulting into a spiral effect of increase in price, decrease in volume; eventually lowering profitability.  Inherently, it was a faulty presumption based pricing methodology adopted my finance managers wherein overpricing was done in weak markets and under-pricing in strong markets. The premise that sales volume can be determined well in advance and thereupon unit costs and profits. It has been well accepted thumb rule that if the change in revenue minus the change in variable costs is positive, company will earn more revenue to cover it fixed costs.

Sales Mangers on the other hand preferred Customer Driven Pricing Technique. Prices were determined to achieve short term sales objectives. It was more like sell the product at whatever price to close the deal without giving importance to the fact, the organisation is into a business to make profit and that too more & more, as some CEOs says. If we reflect back here, sales people job is to raise customers’ willingness-to-pay according to the true value of the product and not otherwise. As rightly being said “low pricing is never a substitute for an adequate marketing & sales effort”.

Coming to the third one, the Market-Share pricing technique as preferred by the Marketing Managers who always prefer to increase market share without realizing the fact market share may not make a company profitable. Constructively, prices have no linkage to market share but to value as being offered to customers who can willingly pay right price for a product.

It means a different Pricing Technique need to be developed wherein all stakeholders are involved in evolving a Strategic Pricing Technique that help in achieving profitability. I say that a CEO should be instrumental in bringing in a conceptual backing to pricing in a company.



Friday, 9 December 2016

Thursday, 24 November 2016

Humility will decide your next Increment


My views as captured in the attached article published in the Times of India editions 23-Nov-2016

Wednesday, 17 August 2016

Is diversity the only Destination?


My response as part of a case study as published in the Human Capital, July-2016 issue

Saturday, 18 June 2016

Realisation: The art of knowing Self

Nature and nurture influence human beings. I heard this first time in my school when my teacher asked me to speak on it in a debate. I did not understand about these two words at all at that point in time, but could speak well whatever was told me. Got public applause, too. Destiny was not leaving me behind not to understand it. In my Genetics class in college later, I was theoretically and practically taught the importance of - nature and nurture. As said, incidents repeat themselves in one’s life, when same was asked by my professor of Psychology in one of the classes. The incident ran for me for more than 3 hours wherein I was supposed to tell me “Who am I”. I said and said and said repeatedly without know about what all realisation is, unconvincingly but un-tirelessly, who I was. Finally, I could not succeed in convincing my professor. I failed. Failed miserably.

But the lesson that was taught  to me directly by my professor and what I learnt indirectly  left me perplexedand  knowing that I don't know who am I? Incident left a mark on my mind. So,  whenever I got chance to know about 'myself',  I tried hard.  But I learnt eventually,  deftly who this myself in me is. 

Thoughts once in your mind, never leaves you. And, incidents repeat themselves as said above.

Recently, I was giving a lecture on Relationship to a heterogeneous group of professionals from a very large organisation.  Interestingly, while speaking on the subject, I found people in the room were least interested to know about the subject but became more interested to know about REALISATION, as I was referring to it time & again.

I later thought to share my views to my readers & followers through this blog.

Let’s look around, people at different stage of life are busy with one or other profession to earn their livelihood to survive, without having realisation about themselves. They however, interestingly use the words: I-ME-MINE-MYSELF repeatedly without dropping the hat. To me, they do not understand the real meaning of these words and therefore are aloof to realisation.

I could see there is a relationship between I-ME-MINE, but myself is quite different than these three words. It is the epitome of the I-ME-MINE.

‘I’ that is 'Emotional - self',  denotes the state of mind. It therefore makes one drive to look for ways and means to survive. The nature has supported it and therefore has built the ‘Old Brain’ first which is full of emotions. Fear- the basic emotion is the emotion which makes one survive. It primarily entails physical self in the mind . What a person believes about self.

‘Me’ that is 'Biological - self',  on the other had conveys about self-belief of one’s existence. All biological systems and activities inside a human body, makes one think of ‘thyself’ every other moment. Hunger, thirst and pain are prominent in making it happen. You remove these three from human body, ‘me’ will be lost, as these provide support to ‘physical self’.

‘Mine’ that is 'Relationship - self',  the last in three, exhibits worldly possession of existence.  May be relationship also comes under this category. It is most easy to understand. It tells more and more about relationship with living and non-living things.

Then comes ‘MYSELF’. Undoubtedly, the most difficult of to understand, but most commonly misused while narrating about oneself. And, this is the seat of REALISATION. 

Myself, does not display any relationship with I-ME-MINE. It is the source of these three which primarily depict existence. Nature and nurture come hear handy to know thyself- discreetly one-by-one. Nature has given you various emotions and the thinking brain. Emotions as read by thinking brain help in making one, MYSELF. Reading emotions although depends on new brain, the new brain gets its energy from old brain through five senses. How one treats all these senses to trigger emotions either naturally by being in a certain environment, makes his/her –MYSELF.

Yes, certain techniques and heuristic comprehension can make one know about his/her ‘Myself’.

 


Realisation is external depiction of ‘Myself’.

In organisations, people come for I-ME-MINE and this throws up challenges of dis-engagement or partial engagement. Organisations do try various ways and means to increase engagement by they end up increasing their I-ME-MINE. This worsens the situation further.

The need of the day is to make people realise about themselves, in other words to make them know about their individual ‘Myself’ which is very distinct to I-ME-Mine and needs very different interventions.

Leaders need to bring in unique and unheard interventions to make it happen.  These interventions could be blend of GENETICO-PSYCHO-ENVIRONMENTAL in nature.

Lets come together to make REALISATION a reality.