Author Archives: Rajan Parulekar

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About Rajan Parulekar

I write on different topics like management, book reviews, human behaviour etc. The main objective is to provide a different viewpoint on the conventional topics.

New Strategies to Manage the Downturn

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It is said that when the going gets tough the tough get going.  Some of the strategies companies are employing to beat the downturn are:

  1. Find New Niches: Some companies are finding new niches which are more visible, easier to record and have a lower cost of acquisition. Maruti is targeting priests in Tamil Nadu and turmeric growers in Nashik.  Groundnut and cotton growers in Jamnagar due to the bumper harvest are cash-rich and are buying mid range and high-end Maruti cars. The sales team was also able to sell 40 Eeco vans as a cost-effective mode of transport to restaurant and motel owners on the highways of Ahmedabad and Baroda.

The niches can be in rural market too where there is more scope for growth vis-à-vis the urban centres. Mayank Pareek, the CMO of Maruti has identified 300 new niches which account for 10% of company’s growth which include potato growers in West Bengal, blue-pottery makers in Jaipur, timber merchants in Gujarat, granite polishers in Hyderabad, painters in Madhubani in Bihar & Nut-bolt manufacturers in Sonepat.

For the migrant workers in Mumbai using entry-level feature-phones, Vodafone launched an application of booking train tickets on IRCTC , says Vivek Mathur, Chief Commercial Officer, “with an application much cost-effective than a  connection of MBs  of a data plan.”

Godrej was selling Aer, its car freshener as a FMCG product through its traditional trade channels. But the response was not encouraging. The consumer care research team found that the car owners are possessive about their cars and the accessories and may not visit the conventional FMCG outlets to buy a ‘freshener’. Godrej changed the strategy and appointed different distributors mainly from the car accessory market. The sales started picking up.

2. Get out of the Office: Axis Bank is  coming out with similar initiatives which include involving senior citizens to open accounts. The Senior Citizen Privileged Account offers health checks, bill payment, an ID card for medical emergencies and a CD of old movie songs. Manish Lath, head of marketing says, “it is not about acquisition business but more of people relationship.”

3. Listen to the Sellers: Dealers, retailers considered as an extended arm of an organization  are the important touch-points with the customers. Aircel has launched a new reward scheme for the retailers who sell the highest number of mobile connections. The star performer’s wife is eligible for a brand new Hyundai Santro car and the runner-up gets to meet MS Dhoni in person. Chandu Virani,  MD of Balaji wafers has meetings with 800 dealers in group of 40-50. The purpose is not about sales and achieving the numbers but to listen to them and resolve the bottlenecks.

Whatever business you are in;  can you identify the new niches which were hitherto untapped and with whom there is a greater fit between your offerings and the niche’s requirement?

 

Limitations of IIM Teaching Techniques

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In my previous blog, I had described the positive aspects of IIM teaching techniques. This article shall cover the limitations. Eminent trainers including the ones from IIM use terms such as methodology, pedagogy etc. rather than  simple ones  called methods or techniques; otherwise how can you impress your clients?

Some of the positive aspects were: 

a. Minimum use of power point,

b.Deeper questioning and

c. providing new insights which were covered in the previous article.

The areas of improvement are:

  1. Information Overload: On an average, every day the participants had to read 5-6 case studies of around 25-30 pages each. Each case study apart from having a number of people, had voluminous data including tables, charts etc. On the eve of the program commencement,  5 people from our group who were in the age group of 40-50 were absolutely terrified and lost.  They were struggling to read the case studies and  trying to decipher meaning out of them. Being a trainer and a ‘True Indian’ I asked them to play Jugaad:  not to take anything too seriously. I proposed an innovative idea: instead of six people reading all the six case studies and depriving one’s  sleep; each one can read only one and the next day at 7.30 AM can provide the synopsis of HIS case study in ten minutes. All the group members were greatly relieved.
  2. Do People really work Great Under Stress?: Two days later, I asked one of the professors ( in training jargon they are called as ‘resource persons’ ) “ Why are you providing such unnecessary and voluminous information to us?  Do you expect us to read around 150 pages each day?” The professor replied, “ Rajan, we do not expect the participants to read the entire case study. It is humanly impossible. The Harvard methodology says that people perform at their best when they are under pressure. For example if you are lost in a forest; you will be alert all the time.” Everyday I used to run into my colleagues with weary eyes, complaining of having hardly  three hours of sleep. Do you feel the process of learning be effective with sleep – deprived participants?
  3. Adult Learning: To some extent the above logic of learning under stress may be valid for young students who are in their early 20s attending the 2 year PGP program. But is such an approach right for corporate executives who have left the academics almost 2 decades earlier? It is akin to asking a person run a marathon who is used to walking.
  4. Unbalanced Training : According to Honey and Mumford as well as Kolb’s theory there are four learning styles:

–          Activist: who is a game for everything and learns through activities.

–          Reflector: can connect his classroom experiences with real life situations

–          Theorists: looks for a conceptual framework ( e.g. Pareto’s law, Theory of constraints etc.)

–          Pragmatist: One who would like to apply the learning for his real life situation.

There was a VP – Marketing  of a Liquor  company from Punjab who was nominated by the company. The MD of the company had clearly instructed him to get new strategies. He was totally lost in the program. A man of around 60 years he was physically present but rarely participated. Throughout the program none of the professors neither asked him nor any of the participants about their background, the type of industry and how their problems could be solved. So the training approach even though good for theorists and reflectors was inadequate for activists and pragmatists.

But the classical response of the professors was:  “We are not supposed to give answers. You are supposed to find out your answers”. My question to them is you don’t give them answers, but can you at least ask them what are their problems and why have they come to such a premier institute in the first place?

5. Piecemeal Approach: There were six resource persons (some were external, hence the jargon) who covered  the four days of the Sales training Program. Each person came, he discussed the case study and he went. Neither at the beginning nor at the end were all the topics were connected to each other in a holistic manner. It was as if a series of 90 minutes session for PGP students was being conducted.

So even though the professors were knowledgeable and they discussed new trends there is a lot of scope for improvement.

And finally something on a lighter note: when training programs are conducted by ordinary trainers like me ; when  few participants give bad feedback about the program;  the management ( the participant sponsoring authority)  considers the trainer is no good and he is virtually debarred from future assignments.

On the contrary,  what happens at such premier institutes? Even if the program is too theoretical and with information overload, the participant decides to give not so good a feedback then…

The management decides that the participant was INCOMPETENT TO UNDERSTAND THE METHODOLoGY AND PEDAGOGY OF THE RESOURCE PERSONS! And the story goes on!

Teaching Methodology at IIM-A : Positive Aspects

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Enhancing the Sales Force Performance was a  4-day training program at IIM-A. IN my last blog I had written about registration and the pre-training work.

The first day was a case study on Ingersoll Rand. Each group comprising of six participants had to prepare a presentation of not more than six slides. The company a global leader in Compressors had three approaches of reaching the market.

The first was the Direct Sales Force (DSF) where the sales engineers interacted with the OEMs ( Original Equipment Manufacturers ) end users to solicit business. The second channel was the distributors and the last one was the Air centres which were the authorized showrooms of the company. As a policy most of the low-end products were sold through the distributor and the air centre channel. The high-end compressors above 50-HP were sold through the DSF model as it involved a higher amount of technical complexity and client engagement vis-à-vis the smaller compressors. However over the last decade the performance of the DSF team was declining whereas that of the other two channels was on the rise.

The company was to launch centac-200 a 200-HP centrifugal compressor and the management was in dilemma whether to hand over the  product to DSF or otherwise. There were a number of issues like market share,  the competition etc. which were discussed in great detail over a 20-page case-study.

Prof P.K. Sinha asked one out of the six groups to make a presentation who came out with its solution to the problem. Some of the unique  earnings for me were as follows.

Positive aspects of the methodology:

  1. Minimum Use of Power Point: Prof Sinha hardly used any power point slides to make his presentation. On the contrary,  a number of trainers feel that the training effectiveness is directly correlated with the number of power point slides. I have seen trainers using 50+ slides in a ½ -day session. They feel by overloading the students with jargon, the training becomes effective. Students get bored with such information overload. Secondly there are too many transitions, colour combinations, bells & whistles etc. No wonder every year Microsoft comes with new features in Power Point and the hapless or inexperienced trainers get carried away by it.
  2. Deeper Questioning: Termed as Socratic Method of Q & A Prof. Sinha made the  participants think from the various dimensions which could not have been anticipated. For example he asked what advantage does the market mover or the innovator has? Most of the students responded in positive saying  that company who launches the product becomes the market leader and that the market mover captures the market. The logic which looked obvious; he had  a counterpoint. He said that group of Tatas has always decided to be a market follower and still capture the market share ( except steel)
  3. Providing New Insights: Like the above example, he also said that even today there is so much hype about innovation ( which has become a buzz word) most of the innovations have been made by small companies and the big companies having seen the learning curve were able to reap the harvest by either modifying the product or with brute marketing power were able to capture the market.

–          In case of Compressors he compared three products A, B & C whose prices  were  $ 60K, $50K & $40K respectively. Participants opted for the C being  cost –effective. However he showed the difference between Price and the cost of ownership ( over  a period of 10 years) where the most expensive product had the least cost of ownership.

–          The cost of ownership for the three productsA,B & C  turned out be :

$ 920K, 1080K & 1120K.  Now the interesting part Cost of the product A was hardly around 7% ( 60/920) whereas the energy cost was almost 80%.

–          Considering the above he showed even giving a product free is a viable proposition. But then Salespersons need to have a much deeper understanding of the customer’s business;  his energy bills and how he can become a part of the customer’s growth process. This requires a much better approach than selling a mere compressor by discussing the features and its superiority over competitor.

–          He said it is now wonder that ABB , Siemens and Schneider Electric ( and even IBM) are harping more on energy, making a better planet rather than just foucssing on product selling.

In short,  the training methodology was highly interactive with minimum power point and a deeper and precise questioning which made the participants look at the situation from a much different perspective  hitherto not thought of.

It was also complemented by providing the new trends ( which sometimes are counterintuitive, remember CK Prahlad- Fortune at the Bottom of Pyramid ) like a new  paradigm of selling, requirement of new skills sets etc.

Due to the self-imposed restriction the limitation of the above shall be discussed in the next blog.

 

My experiences At IIM-A

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I had enrolled for a MDP on Enhancing Sales Force Performance program at IIM-A. The four-day program was to commence on Monday 18th February.

I reached the campus at 8.00 PM the previous day. After entering the campus I was given the course material in a bag with the room keys. The participant list of 35 executives  included Sr. managers, CEOs from India and also  3 from Sri Lanka, one from Singapore and Bahrain each.

After checking into the well-furnished room,  I freshened up, headed straight towards canteen which was to close at 9 PM.

When I returned to my room I said to myself, “ anyway the program is next day and after a hectic travel I deserve a good night’s sleep to do justice for the program.” But then curiosity caught over and I thought of glancing through the course contents.

A binder consisting about 12 case studies and other reading material  totaling  about 400 pages was dumped on each participant. My heart sank into my boots. “Anyway 400 pages, I can start it tomorrow. ” I said to myself.  My attention was drawn to a small booklet which read Instructions for Participants and that  I was a part of group 2 consisting of 6 participants  who have to read 3 case studies amounting to 80 pages and prepare presentation of not more than 6 slides. And this has to be prepared on Sunday night. That means I have no pleasure of enjoying the sleep.

I went to room no 132. The  other guys were sitting there most of them in their early 40s utterly lost in what they were reading.  After exchanging pleasantries I asked  Sudhakar,  a manager from an event management company. He said, “ look at this case study on Ingersoll Rand. I cannot make out what a compressor is,  the different types of products, around 7 tables with huge voluminous data and a case study 20 pages long. And if this is not enough there are no questions at the end of the case. “

Abraham Mathew, a Sr. manager from Kanan Devan tea said, “ we need to read at least till 4 AM to complete the assignment.”

Confusion and boredom loomed large over all the group members’ faces. I said, “  Friends, take it easy. You do  not have to be so nervous. Guidelines for handling a case study are”:

  1. What is the major issue?
  2. What are the minor issues?
  3. What decision needs to be taken?

Try to separate the wheat from the chaff. You do not have to take all the data seriously. Take a distant outlook to get a broad perspective. And above all take it easy. This is not the only case you need to attempt. There are two more to be solved.”

Secondly do not waste your precious energy in reading all the case studies individually. What you can do is each of you read only ONE CASE today which I feel you can complete by 12 midnight. Come here at 7 PM and each member  briefs the group within 5-10 minutes the synopsis” . Next You can make a ppt within 10 minutes.without any frils.”

Everyone heaved a sigh of relaief. That is a jugaad which we Indians are god at!

Suddenly the tension prevailing in the room subsided and everyone started looking at the problem with a cool mind. Now why do IIM professors subject the participants with such a huge workload?

We shall see in my next blog…

Is Goal Setting useful All the Time?

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Who has  not heard of Goal Setting particularly the SMART ( Specific, Measurable, Attainable , Realistic and Time Bound) Many of us might have attended training programs on Goal setting , but then in spite of all the hype and the hoopla why does it become a such a stressor?  In spite of all the SMART goals,  why do 95% people give up on the new year resolutions? I have even heard some executives saying that the only resolution they make is not to have a resolution.

The positive side of goal setting is it gives you a sense of direction. But what is the flip side? The Yale study of Goals is cited by Brian Tracey and also renowned magazines like Psychological Foundations of success. The 1953 batch of graduates were asked about their goals for the future. Only 3% of the graduates had a clear set of well-written goals.It was like getting a specific salary, a designation, a big villa etc. 

It seems 10 years down the line the researchers observed that 3% who had a clear focus had  amassed more wealth than the 97% who had no clear goals. This study was often cited by management gurus like Brian Tracey, Zig Ziglar, Tony Robbins on which they make millions of dollars with their motivational seminars. The self-help industry has been thriving on Goal Setting for so many years.

A journalist from Fast Company, a technology magazine tried to trace the origins of the Yale Study of Goals and he realized no academic journal was ever cited for the Yale Study. When the motivational gurus were approached,  Brian Tracey pointed out fingers to Zig Ziglar who in turn pointed to Tony Robbins who again referred to Brian Tracey. ( ref: If Your Goal Is a success Don’t Consult These Gurus: fast Company 18 December 2007)

Oliver Burkeman in his book The Antidote – happiness for People who Don’t Stand Positive Thinking called on Beverley Waters the archivist at the Yale school who said that such study was never carried out.

Goal Setting as a concept was introduced by Gary Latham & Edwin A Locke who between them have written 20 books on the motivational aspects of life.

One of side-effects of Goal setting, particularly in corporate settings is managers tend to lie about their achievements. I remember while working for my previous company, my Divisional Manager whose initials were PR said during the annual Sales Conference: In the next five years we are going to be a Rs 100 core company. We had barely touched Rs 2 crores in 1987 then. Within 6 months PR had put in his papers and moved to greener pastures.

Two years later another Sr.Manager called NV made inflated invoicing  where the goods were shipped from the Mysore factory but were never despatched to the dealers. But the order booking was shown so as to meet the targets. He barely escaped getting sacked. ( Company A).

Another person, a Sr. manager  AGI used to narrate how on 31st March vendors used to supply empty boxes ( in place of Complete instruments) to the customers carry out the invoicing then recall the boxes for repairs and then supply the products. ( Company B)

Both the companies have closed down their operations by 1995. Most of them attended seminars on Goal Setting particularly the SMART ones.

Is All Business necessarily a Good Business?

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‘Customer is the king’  goes the adage. During recessionary times sales managers  would like to close as many orders from all and sundry. But is that so? Would you  believe that IT majors  are letting go of the clients who do not contribute  more than a few hundred thousand dollars per annum are getting the axe?  Called as Tail Accounts, such clients neither add to margins nor are a strategic fit to the vendor’s business.

“We are knocking off many of our tail accounts which do not bring a value proposition” Says T.K. Kurien CEO of Wipro. Last year Wipro has dumped 40 clients who were providing   revenue of $ 8 Million ( Rs 45 crores) iGate is also not renewing contracts with 70 clients fitting the above category. The company in turn has reduced the number of active clients from 344 to 293.

The strategy behind such a move is to free up the limited Sales Force bandwidth to focus on winning large clients. Sometimes less can be more!

Do you have such customers who keep you busy, show a marginal revenue on your top line but do not add to your margins? Think it over.

(with inputs from Big IT Pulls the Plug on Small Fish – Companies Cut out tail accounts to focus on key customers.- Economic Times: 26/11/12 p1)

(Refer my article:  All Business is not Good Business : Contextual Selling p241,  visit http://www.paradigm-info.com for book details)

Why Trust is Required in Selling?

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We were organizing a program on 30th & 31st  October in Mumbai and we received nominations from a HR manager from Bangalore for the same.  As both the customer and the vendor were from Bangalore, we asked the HR manager to send the payment directly to the Bangalore office before the commencement of the program in Mumbai. However, the manager refused to send the payment. Instead a cheque payable at Bangalore was handed over by the participants at the venue in Mumbai. The reason: the client must have thought it is better to send the payment with the participants and play safe rather than sending to the vendor directly. In case the program gets cancelled, it is easier for the company executives to carry back the cheque rather than try to retrieve the same from the vendor. This illustrates an implied lack of trust.

When you are making a cold call, particularly to a new prospect, you must have observed that the prospect is quite hesitant to grant you an appointment. Only after repeated calls, you may get an appointment and that too for about 5-10 minutes only. Why are customers reluctant to entertain unknown salespersons?

Some of the reasons from the customer’s perspective are:

a) He is a stranger. I do not know him.

b) He just wants to sell me something, which I do not need.

c) Why should I trust him to what he says?

d) Does he have credibility?

e) I have other priorities & my time may get unnecessarily wasted.