The Egg Theory

Compared to the bachelor days, my experimentation in the kitchen has gone down significantly. After a long time I cooked a breakfast for myself today. Being lazy I decided to make some ready to mix Upma (for those who don't know what Upma is just Google it ). But when I put the pan on the stove, I felt like adding a dash of my creativity to the 3 simple step process ( boil water, add the upma mix and simmer on medium heat for 3-4 minutes) mentioned on the pack. I thought to myself I deserve better than this for a Sunday morning breakfast, something more lavish and elaborate. Well....I opened up the fridge and grabbed almost everything that came in my sight - capsicum, cauliflower, carrot, beans, green chilies, frozen pea, cashew nuts and few more I don't remember. Stir fried them for good ten minutes and then followed the 3 simple steps :) All in all a three minute job took me almost thirty minutes..but at the end of it I was very happy and looked at it with a lot of pride and admiration. I relished every bite of it, not that it was tasting very different from the simple mix. The mix has dried vegetables in it already. But the sheer fact that I invested so much of time in preparing it had somewhere made me fall in love with it already. This is a classic case of creator's bias. Creators always tend to overvalue their work and greater labor in creation tends to higher degree of over valuation. This is an interesting insight for any marketer, especially if you are in the business of selling product or creativity. Let me explain you the classic "egg theory" on this.

The culture of pre-mixes was introduced in the late 1940s in America.Various forms of baking mixes for making biscuits, piecrusts and cakes were launched in the market. But the cake mix which required simply adding water and baking it was not adopted with as much of enthusiasm by consumers as others. For a while the companies thought it was an issue with the formula and tried changing ingredients and flavors, but all in vain. But later some psychologists found out that it was not the product but the process that was the culprit. The cake mix simplified the process to such an extent that people din't feel that the cake they made was actually theirs. Then Pillsbury came up with a mix where they left out the dried eggs and required the creator to add fresh eggs with milk and oil. The sales immediately took off. This idea then became popular as the "egg theory". You can find many such examples in the Indian context. Think of Maggi. In early 90s their positioning was completely on the convenience, it just takes 2 mins to make the Maggi. While this was a great proposition for the market then which lacked ready to cook products, it got them positioned in the snacks category. Soon they realized India is not a snacking country and if they have to achieve volume growth they have to be a replacement for a main meal. That's when they completely changed their communication towards health, taste and experimentation in making Maggi recipes by adding vegetables and other ingredients. The moms in India unless and until spend 10-15 mins cooking something for their child, think they are not doing justice to their motherhood. It's again the creator's bias, of course every mom wants to provide the best food to their child. And when they cook something they attach a lot of value to that food, even if it doesn't add any marginal utility. 

While as a marketer this can be a killer insight, as a people manager or a leader this can be a killer of your credibility and acceptance within and outside your team. We all as managers at times get very possessive about our own ideas and projects. While there may be a strong logical reason behind why we think so, we can't escape the creator bias as human beings. Whether we accept it or not, the fact of the matter is we always over value our own ideas. An extreme case of it can be when you become an elective listener (way past being a selective listener) and process the information which only corroborates or confirms to your ideas. You develop a form of cognitive blind spot which is not due to lack of resources or information, but because your creator bias is so over shadowing that it doesn't leave any room for them. Be watchful of this especially if you are in an authoritative position, because the flow and intensity of right information is even more constricted because of your power distance. Then it's not the "egg theory" but the "chicken and egg theory" :) You think your idea is the best because no one else has refuted it or has come up with a better idea, where as you have closed all the doors of your mind to give way to other sources of ideas.

Ok. Now I have talked so much about cakes, maggi, egg,chicken I am hungry now. Time for lunching :)

Thanks for reading through. If you think I am writing bullshit in my blogs and still going on writing thinking it's awesome, then please help me come out of my creator bias. Drop in a line in the comments section.

The Power of Expectations

" Life is largely a matter of expectation " - Horace

We all, especially the Gen Y Indians, would definitely relate to this, may be with varied levels of intensity. For most part of our lives, we either have been fulfilling the expectation of others or have been expecting for something. We all love to expect and when expectation is either disappointed or gratified we want to be expecting again. These expectations, either from others or our own, shapes us as individuals. However it is interesting to observe that individual expectations, though may seem to be a very personal phenomenon, is strongly derived  from two factors - time (the generation you belong to) and macro economic conditions.

We primarily have three generations active in the workforce  : GenX - born between 1965-80, GenY - Likes of me (born between 1980-1995) , GenZ - The new generation (1995 onwards). Now if we look at the the Indian economy post independence, it can be divided into two distinct era; pre-liberalization period  (1947-1991) and post-liberalization period ( 1991 onwards). Our parents, the babyboomers or the early Gen X,  belonged to the pre-liberalization era where the economy was inward looking leading to scarcity of jobs and limited opportunities. So when they were growing up all they expected for is financial security, may be job for lifetime that pays them just enough to meet all their family and social commitments. Most of them never had the luxury of some disposable income which they could spend on  things like an unplanned dinner in a good restaurant  or a vacation at a nice destination. So they started expecting that at least their kids should break out of these financial constraints and the only way they saw to achieve this was to push their kids (that's us) to excel at studies and end up in a good job. They did everything in their capacity to provide us good education sacrificing many of their needs. But with that also came the burden of expectation on us. We were conditioned to think that excelling at studies is our only way to a better future. We were expected to get good grades, find a seat in a good technical college, get a high paying job and be financially secure. Our parents at times tried to instill insecurities in us to drive us towards that goal.Their expectation or their ways were not totally wrong as that was the reality in early 90's. However in 1991 India adopted a free-market principle and liberalized it's economy to international trade. While we were in schools, Indian economy was going through a massive transformation paving the way for many new avenues. But it was too early for us and our parents to understand those signs; all our formative years we were busy fulfilling the expectations of an old world which was to change completely. When we, the GenY, entered into our professional career in early 2000, opportunities were plenty. We started expecting from ourselves what our parents had expected from us, may be a bit more... High salaries, nice cars, a dream house, vacations in exotic destinations, fine dining, big savings..The more we achieved the more we started expecting because we were always expected to achieve more. And as the law of nature goes, all expectations do not get fulfilled. The more we started expecting, the more windows we opened for us to be disappointed. You may think here I am hinting towards being less ambitious. But don't confuse ambition with expectation. Ambition is a positive term, it gives you the drive to move ahead where as expectation drags you down. GenY is this confused lot now trying to find a balance between ambition, expectation, achievement, gratification and disappointment, at times undermining their achievement/gratification, at times unnecessarily magnifying their expectation/disappointment. But when I look at the late GenY/Gen Z it's a different story all together. They are much more independent, open to experimentation and have stronger preferences in terms of their career choices, . As they have been brought up in the  post-liberalization economy, they have not been exposed to an environment of scarce opportunities or struggle for fulfilling basic financial needs. So they are confident, have better sense of purpose and are much more at ease with themselves. They are not dragged down by expectations as much as the older Gen Y is.

Now let's see what's the implication of this in a corporate set up. What managers believe or expect of themselves greatly influences what they expect  from their subordinates or superiors and how they view the incentives. If you belong to Gen Y higher probability is that your superior is from Gen X and your subordinates are from late Gen Y/Gen Z. To ensure performance, you need to understand and manage the expectation of everyone including yours. As Gen Y you have worked really hard through the last decade and probably have moved beyond the worries of basic financial security. Drawing a comparison to Maslow's need hierarchy theory, in the corporate need pyramid you have moved beyond the 3 basic needs - physiological needs (decent working facility, defined work responsibilities), Safety needs (job security, salary, bonus), Social needs (team acceptance, collective decision making). The biggest motivator for you now is fulfillment of your esteem needs i.e. recognition, admiration, awards, increased responsibilities, respect etc. However your superior being from Gen X still could be valuing tangible rewards like salary hike, bonus or dinner in an expensive restaurant as big motivators, because for him the financial objectives were of greater importance while he was at your level during the early liberalization era. Instead of expecting your superior to understand your new found need and getting disappointed every day, it's better to have a candid conversation and align expectations. Similar is the case when you are dealing with your subordinates from late GenY/Gen Z. Just because you have gone through a phase of struggle  and have worked for long hours to meet your own expectations of financial or job security, it is not right to expect the same from them. They probably have moved one level up in the corporate need hierarchy to self-actualization needs where they are looking for greater autonomy, meaning in their actions. They probably are not in a hurry to reach a destination and believe that the journey - in whatever form it comes - can be more rewarding than the final destination. As a manager it's very critical for you to have an appreciation for this and value every individual for what he is. If somebody is not willing to put long hours at work, that doesn't mean that he is less committed or less effective. Instead of starting to expect less from that person, you should create high performance expectation from him, as more often than not, people appear to do what they believe they are expected to do.

Are You The David or The Goliath

I was watching an interesting TED talk by Malcolm Gladwell today. His interpretation of the classic underdog tale: David, a young Israeli shepherd armed only with a sling, beats Goliath, the mighty Philistine warrior. The story has transcended its biblical origins to become a common shorthand for unlikely victory.

I really loved his ending. He says " Giants are not as strong and  powerful as they seem and sometimes the shepherd boy has a sling in his pocket". When we are growing up the corporate ladder sometimes we behave like the giant Goliath, mighty and powerful bulldozing our way through the organization and sometimes we are this David, timid and powerless in appearance but with an ace up the sleeve to get the win. But unfortunately winning in the corporate world is not that straight forward always. You can neither be like Goliath or David; nor can you afford  to be not like both of them. Let me explain what I am trying to say.

There was a forty day deadlock in the war between Israelis and Philistines in the Valley of Ellah as none of the army would descend down the valley in the fear of getting exposed to the other side first. But twice a day Goliath, the giant Philistine warrior, would come out between the lines in his armor and challenge the Israelis to send out someone to fight him to decide the outcome in single combat. The Israelis were intimidated by Goliath and never braved to fight him. Many a times in real life situations in corporate world you are the Goliath imposing your power, asserting your position to get your way. But at the same time you must be aware that there could be many shepherd boys who possibly can hit you at your weakest spot with the hidden sling shot. One of the explanations given by Malcolm Gladwell for Goliath's defeat was his myopia. Goliath couldn't notice David until he was close enough, otherwise he would have definitely figured out that the shepherd boy without any armor and weapon is not going to fight him hand in hand. In medical terms his myopia could have been a side effect of a syndrome called "Acromegaly" which was also the cause of his gigantism. In acromegaly, a tumor in the pituitary gland results in over production of growth hormones leading to gigantism. When the excess hormones expand they compress the surrounding brain tissues primarily affecting the optic nerves. So clearly Goliath's greatest strength was also the cause of his greatest weakness. I am not saying that you shouldn't be the Goliath at all, sometimes it's necessary to ensure that you are not being taken for granted. But before you chose to do that be cognizant of your weaknesses too and learn to use humility as your defense.

Now let's look at the David side of the story. It was definitely very bold and courageous of him to volunteer for fighting Goliath. But it was not just a leap of faith for him, he had evaluated the situation carefully and devised a plan to fight Goliath using his strength, something he had been doing for years. When he was offered the armor by the king, he clearly denied as he had a complete clarity on how he wanted to fight his battle. Sometimes when faced with challenges in the corporate world you have to be the David, taking the risk to shoulder the delivery of a seemingly impossible task. These are the opportunities that propels you up the corporate ladder, but before you grab them be sure to have a game plan that is based on your strengths. Failure in this case means a suicidal career move and you can't take chances to learn and experiment here. However unlike David you may like to put the armor, at least a light one, to make everyone believe that you are well prepared to take on the audacious task. People are not aware of your strength as much you are, they will have their doubts. But at this point you rather focus on delivery than wasting your energy in handling the skepticism around. So put on the armor, make people believe that you are playing the game the way they know, keep the interference minimum.
                                   P ( Performance) = P ( Potential) -I (Interference)
                 You deliver to your potential if you manage to keep the interference minimum.

Long story cut short, in a corporate set up you are the David and you are the Goliath. Again as an ex-consultant I have the obligation to synthesize and present you the "so what" in three bullet points :)

Here it goes....

1. When you are the Goliath, be humble and watchful, as you definitely would be hit by someone with a hidden slingshot.

2. While being David, stick to your strengths no matter what the world thinks and put that armor, even if unnecessary, to make the world think that you are the one.

3. Learn to manage David and Goliath, as you need both of them for success.

Paradox of Middle Management : The Balcony or The Dance

Too many meetings, too many parallel work streams, too much of information, unable to focus on few priorities, not having enough family time.. As much you would like to believe that you are special, but here it would be a relief to know that you are one of  the many who are going through the same phase.Welcome to the world of middle management.

We, as managers, have always been conditioned to think that our job is to solve problems. Think of all the assignments we did in the b-school, all the midnight oil we burnt with our case prep groups solving cases of all kinds. We were always evaluated on how we structured the problem by breaking it down to smaller pieces and how we derived the solution through issue trees,  hypothesis, fish-bone analysis etc. This made all of us believe that every situation we face is a problem and  can be solved through a logical approach. But what we were never told was there are things which can not be solved, because they are fundamentally not problems. They are paradoxes. One of the biggest paradoxes we face at middle management level is whether to be in the balcony (strategic thinking) or in the dance ( operational work).  We can never solve this, all we can do is to learn to juggle between the two. The sooner we get better at this, the quicker becomes the leap to the upper management. We all know it. But how do we practice it.

Jotting down few things  below that may save you a bit of time from the dance and get you on the balcony for a while. But getting up on the balcony takes a lot of discipline, operational pressures will always tend to pull you back to the dance. You need to be in a constant evaluative mode of yourself and most important of all - Learn to say NO.

1. Let Go 
Not everything is important. There are things that can be delegated. You may argue that when you delegate something, the delivery is not up to the standard and you again have to spend a lot of time in rework. So it's efficient to do it yourself and get it right in the first go. I have two answers to this.One, you get it right in the first go not because it is right, but because you think it is right. Respect and trust the capability of others. Second, even if the output was not up to mark, how the does that matter. It was anyway not important to start with. So why don't you just let it go ?

2. Press the pause button
I am sure you go through a lot of chaos everyday at work and sometimes wish you could just have some time with yourself. Well then why not press the pause button. Block an half an hour slot on your calendar, move away from your laptop to a meeting room or cafe with a pen and notepad, put your phones on silent mode and stop the data sync, grab a cup of coffee and try to not think about work.  That's when you would realize it's so difficult not to think about something when you actually are thinking to not to think about it :) First few minutes your mind will be running all over, but if you keep trying in 5-10 minutes you will feel your mind is getting de-cluttered. That's when open up your notepad and try jotting down your big ideas.

2. Keep your eyes and ears open
With the work load you may not find a lot of time to network or have a chat with people beyond your immediate work group. People are source of information. The more people you know, the better equipped you are with information and the better clarity you have on the big picture. Make it a habit to have lunch with other work groups at least once a week.  You may not be able to contribute a lot to their discussions to start with, but you are anyway there to listen to them. So don't put undue pressure on yourself to be the centerpiece of the conversation on the table.

Enough of preachy stuff. Just want to leave you with one thought. Problems are to be solved, but paradoxes are to be managed. And as managers we should be more worried about the managing part than solving  :)

Confessions of a part time entrepreneur

"Bhubaneswar is gradually becoming cosmopolitan with emergence of many corporate houses like infosys, Tata, Mahindra Satyam, Reliance. The pre-historic temple city is now an eclectic mix of old and modern buildings. The growing number of vehicles on road and busy lifestyles of people are testimony of the economic evolution the city is experiencing"

We had this very nice story and positive trend lines to back up our idea of starting a home food delivery chain ,which me and my friend conceived one evening while searching all over the place for a simple and healthy dinner. We thought to ourselves that despite being locals, if it's such a painful process to find a decent place to have dinner, imagine how much of a suffering the migrant workforce ( primarily in the IT sector) must be going through every day.  We both were thoroughly convinced that there is a strong business opportunity and plunged into starting our venture, a home food delivery chain that takes care of your everyday dinner needs. 

My friend quit a better paying job in Bangalore and took up a job with one of the few IT companies that are there in Bhubaneswar. Then the hunt started....a house for rent where the owner would allow us to run a business, kitchen equipment from different sources, a cook, delivery boys, bikes, delivery boxes, website developer, creative designer.....the list goes on. We wanted to be as scrappy as possible to keep the investment and operation cost low as were getting into a highly price sensitive segment with very thin margin. So cost efficiency was one of the key driving factors of all our decisions. However, we never wanted be another "dabbawala" or tiffin service. It was very clear that quality of food and presentation ( compact branded disposable trays) is something we would never compromise.

After a toil of three months we were ready with the basic infrastructure, four employees, website, etc.It was a hell of an experience for us as the support system and the level of professionalism you get in a small town is by no means geared towards making an entrepreneur's life easy. First day of our operation, we got three orders and trust me it felt like writing IIT entrance exam all over again. Ensuring the right quality, packaging, on time delivery was no easy feat on the first day. We learnt, expanded the team, hired one manager, grew to delivering 70-80 meals a night within 6-7 months. We needed more delivery boys than we thought because with unplanned layouts of Bhubaneswar, deliveries took lot longer than we had expected. We had to hire more people to build back up as every week couple of delivery boys would leave us and for what.. They all wanted go back to their villages and have an easy life getting Rs1/kg rice government provides. None of them qualified to be BPL   (Below Poverty Line), but they had somehow managed to get their names on the list. Thanks to the corruption and free-food-for-all programs of the government, no one wants to earn their bread now. We had to hire a manager from a local MBA college to ensure efficient operations and better customer service. All this made our salary cost touch the roof and the books would look deep red at the end of the month. We increased the price of the meal by merely 5 rupees. We thought it's just 5 rupees, our customers would be okay. But we were wrong. The orders dropped by 30%. We had to do something different to turn around the business, the only feasible option we could think of that time was to enter into corporate catering. Again on papers the proposition looked great, single point delivery that saves our logistics cost, guaranteed orders that protects us against the demand variability. We started and within couple of months we were delivering in top 2 IT companies of Bhubaneswar and few more small sized businesses. But again handling relationship with admins of the companies was a nightmare. They would think as if they have done a big favor to us providing the business and would expect something in return. If you don't succumb to that then their demands keep increasing..demands like -  you need to send two more people to clean up the tables and used plates, you need to add another item as there are complaints from employees about the quality of your food etc etc..We held our head high and kept fulfilling their demands rather than doing any back door deal. But all this comes with a cost.. The profitability from corporate operations took a hit. Despite all odds we managed to build a business, which at least employed 20 people and was able to meet it's operational expenditure from the revenue generated. 

Then over the course of next few months we realized, to maintain the efficiency of operations and quality of delivery, one has to be dedicated full time. No matter how many managers we hired, how much we trained them, the level of professionalism and delivery was far from our expectation. We couldn't attract good talent because we were no big brand. We weren't willing to pay unreasonable salary for the average skill sets of the people who wanted to work with us. Also to be frank our profit margins din't provide us the luxury to afford fat pay cheques and as the saying goes "you get monkeys for peanuts". Getting the right resource and making them stick took almost half of our time and we could never bail ourselves out of that spiral.

My friend for few months couldn't devote as much time with his increased professional and personal responsibilities. We had to trust people to run the daily operations only to realize later that the word has lost it's meaning in today's world.We again tightened our grip on the operation . Within few weeks things were back to normal. But we started asking ourselves the question - " what is normal and if this is normal what's the new normal". Will we ever be able to reach the new normal being part-time entrepreneurs. Also in a business where service is the core is it the right thing to manage it part time and expect it to become a multi-million dollar business. If we do it full time, will we be able to scale it beyond Bhubaneswar? Will we ever become a brand where people are willing to pay a premium for for our food like they pay 250 bucks for a pizza? Will we ever be able to change price sensitivity and mind set of people in a small town? I am not exaggerating this, but we were shocked to see  employees of respectable IT companies walk down a mile to have their lunch in a nearby filthy unhygienic "dhaba" ( small roadside restaurants) for 30 rupees to avoid paying 50 rupees for the lunch at their cafeteria. If such high salaried people don't have a concept of hygiene and quality, why anyone ever would pay a premium for our food in this market? There were many such questions like this popped up and we could never find an answer to them. Then after a lot of deliberation, we decided to sell it off . A two and half year journey of two part time entrepreneurs came to an end. We never reached our destination, but we thoroughly enjoyed every moment of the journey. 

Now that I have walked that path, guess it makes me little wiser to leave few advice for the future entrepreneurs. And because I was a consultant I have to synthesize and give you the three things you should never forget ( for consultants everything has to culminate to 3 or 5 bullet points,No offence my consultant friends :) 

1. Part time entrepreneurship is good to test a concept, but never enough to build a business. So if you are convinced with your idea and passionate enough then take the plunge. 

2. Never start your business in a tier-2/3 city. There is no ecosystem for beginners and you will be the last person any one would chose to invest.

3. If you are getting into a service business, your biggest capital investment should be your human resource ( Most of us commit the mistake of counting people expenses as opex) Don't get into the mindset of hiring better resource once the money flows in, the money will flow in only when you have best of the resource. 

Signing off
A part time entrepreneur 

Distribution in the internet age

While browsing today I stumbled upon the sevenymm.com website. I remember signing up for their service in Mumbai the very moment I bought my first LCD TV and home theater system back in 2008. They provided a very efficient service for DVD rentals and had an offering of wide range of Hindi / English movies. My weekday after office hours were pretty much  occupied watching rented movie DVDs from them in an effort to maximize my return for the monthly membership fee ( 20 movies a month for 300 rupees wasn't a bad deal at all ). To my surprise seventymm.com  has turned itself to an e-commerce site now. One more e-commerce website as if we din't have enough.. I din't even feel like figuring out what they are offering, closed the tab within seconds.

But then it got me thinking why such a seemingly promising business, which was then one of the largest invested start-up ventures in India with a capital investment of  INR 90Crs  from the likes of Matrix Partner and NEA-Indo US Ventures, died within few years. Why none of these VCs could foresee the future of content digitization and distribution through internet. India is at least 5-7 years behind in adoption of internet and access infrastructure. It should have been easy to predict the future then by just seeing trends in developed countries. By 2008/09 I think even Netflix had a bigger streaming business than the DVD rentals.

The crux of the story is if you are in a business of any good or services, then you should completely re-think your distribution strategy as some point of time the internet will redefine the whole value chain. Today in India, internet is primarily used for communication, information or entertainment. But may be in another 3-4 years it will become the primary medium of transaction. When I say primary medium of transaction, it doesn't necessarily mean purchases or payments on web. A transaction is a final business deal or a closed negotiation for buying/selling goods and services. The how and where of the transaction will always involve interactions beyond the web. Internet is definitely reducing the need of a middle man by bridging the information gap between  the buyer and seller  but it will never eliminate a middle man completely. In a country like India where we spend 13-14% of our GDP in logistics because of infrastructural issues ( which is not going to go off for next 3 decades at least) cracking a cost efficient direct to consumer delivery model would need a genius like Professor Charles Eppes (a fictional character of popular series "Numbers"). Unless that happens e-commerce players will continue to be under tremendous pressure for profitability and success for them will be a matter of being able to get more VC money to blow. So instead of fretting too much over "e-commerce" what companies should focus on is building a robust "e-distribution" model. Instead of reinventing the whole distribution chain why not tap into the distribution chain which is already there and probably carries lot more credibility and connect with the local community. What bigbazaar is trying to do is actually incredible. They will convert the existing kirana shops to their franchisee and manage a global portal for ordering while ensuring the delivery and cash collection through the local kirana shop. Some point of time they could think of creating a local procurement hub for big franchisee clusters and reduce the cost of logistics of sending goods from a centralized warehouse. This way they will minimize both their inbound and outbound logistics cost hence increasing their profit margin.

Internet is already big in India with 150M users and will mostly double by 2015.Mobile internet usage is growing like wild fire with the increasing smartphone penetration and reducing data cost. Given these trends internet will be the largest medium of reach to Indian consumers  ( Currently the TV viewer universe in India is estimated to be ~230M ) and will diminish the value added by many intermediaries . So if you are a business of  intermediary or distribute through intermediaries, it's high time to re-think and re-design your business model.