To or Not to On board heir into family business NOW!.

Every family business owners goes through this tough decision. Whether to on board the progeny into the family business or let her pick knuckled hard outside and join later is a tough call.  The decision to bring in the successor is contingent upon factors including education, scale of business, incumbent qualified professionals, maturity of the business, and alignment of dreams and commitment.  Wherever the educational background is directly relevant to the existing business and the heir could comprehend the nuances of the business and contribute on boarding could be useful, more so if the heir is going to manage and direct line roles.  If the educational background is unrelated and the heir can manage staff roles the decision would be contingent on other factors. A ward with prior industry experience, exposed to the intricacies of how business work may perform well even if she has no family business related industry experience. Scale and maturity of the organization play also play a crucial role in the decision to on board. Early stage growth firm may find on boarding a ward beneficial if she can own and independently drive some key initiatives and functions. Having a trusted family member to share the responsibilities and pace up growth can work if the outcome ownership and governance are well defined.  If the family business maturity in terms of process and resources is low, an experienced heir can come handy, while a freshly minted heir may add to inefficiencies if expectations are not matched early during induction and constantly reinforced.   Incumbent professionals in terms of bench strength and commitment also impact whether you could on board your ward and set her to win.

Amongst all the factors impacting the decision to whether to on board or not, two important ones have a huge impact. These are alignment of dreams across generations and commitment of the ward. Wherever the dreams of the heir are well etched out and in tune with the previous generation, the on boarding may yield better results. If the dreams are not completely aligned in the long run, but the immersion may leads to merging of the dreams succession may end fruitful if industry and markets remains attractive and the heir drives more value creating engines. Finally, what matters is the commitment of the ward. Does he join the business out of desire or obligation or opportunism determines the commitment and likely outcome of the directions. When the heir join out of interest and passion to the business, and have goal fueled by many enchanting discussions about family business at family dinner table, on boarding prove to be beneficial. If the progeny joins the family business out of obligation, the low commitment can hurt the family business if they are caught at the cusp of growth or market changes.  Investing in professional managers to run the business can mitigate the potential risk when heirs join due to obligation.  Whenever the heir joins due to opportunism (lack of other alternatives or the family business experience equips him with better capabilities), such an on boarding is due to opportunism. Such an arrangement can work when results are passable and market benevolent. Summing up, whether to on board or not a heir depends upon:

  • Ward wants to join because of desire or obligation or opportunism
  • Ward has related industry prior experience or wants to learn on the job
  • Has Education is related to you business, or unrelated to your business
  • Scale and maturity of the company
  • Emergent Economic and business opportunities
  • Number of qualified professionals
  • Alignment of dreams and actions

Dr TR Madan Mohan

Obtaining leadership commitment

A German manufacturing organization with offices in Pune and Bangalore has unique problem. Their highly talented engineers don’t want to move the management ladder and transition from developers to managers. With limited next line of leadership, and challenges on culture fit of resources from market the company was challenged to scale up quickly.  Management realized the crux of the resistance lied in transforming the technical staff to imbibe and practice a sense of outcomes, urgency and above all review and direct peers and colleagues. The technical staff hated to move out of the comforts of the comradery position which did not require ownership of others. Despite abundant availability of individuals with experience and managerial capabilities the company found its leadership development floundering. The company had tried push of an employee early into a leadership position when he/she was not sure and the haul has been a failure.  It was not the capabilities or the administrative support that mattered, but simply the change commitment of the employee to transform from an individual role to team management role that required planning, directing, reviewing and owning others that determined the success of internal leadership development.  Here we are not talking about the Meyer and Allen models of organizational commitment of the individual and its major components (affective, continuous and normative).   What we are addressing is the emotional commitment an employee invests to implement a new strategy. Passion, excitement, pride and energy are the signs of a committed employee.  To attain this dramatic change of attitude to occur, people must not only accept and agree with the strategy, they must buy into it. Without emotional commitment, even the most brilliant strategies will fail. Growing leaders internally is a process that requires planning, high intensity of follow through, and freedom to emerge from failures What is the best approach to gain acceptance, support and commitment of an associate?.

Based on our experience we propose a six stage model for employee commitment buying process. The process includes: identification, goal enumeration, assessment, alignment, reiteration, and formalization.

First and foremost, one should assess an employee’s interest and passion towards his/her work. As the famous saying states, “Choose a job you love, and you will never have to work a day in your life, but celebrate each moment”. Identify and develop them early: Most successful internal leadership programs quickly identify leadership potentials and others very quickly. Look for obvious signs of quality of work, sense of ownership of team, quality of feedbacks to colleagues, initiative for breaks with team, etc

Once the employee is identified her manager may provide bird eye view of the organization’s goals, and immediate concerns, and different team members strengths that are required to reach the goals. The objective of the session is to enumerate the immediate future, how the individual can contribute to the cause and what would be the impact at organizational, team and individual level.  The employee is involved in ideation of the goal, the impact it would create at different levels and what resources may be required at each level. At this stage, the objective is to create vibrant imagery of possible state and acceptance by recipient similar to “to broaden and build theory” of Fredrickson. Manager’s only focuses on strength, latent potential and how fuel it. Communication is selective, articulation is directed laden with vibrant imagery. Positive emotion and sense of excitation changes the individual’s conscious and unconscious drives for better long-term outcomes.

Next step is role visualization and capability assessment. The manager and the associate dwell deeper into the roles. The manager innocuously steers the discussions towards individual’s assessment  of her strengths, capabilities and gaps. Manager directs the flow based on a certain frame that of allows for self-evaluation without the burden of guilt and incapability. Communications are deliberate, are “frame” based thus allowing ruminations in a collaborative environment.  Evaluations are deliberated towards role rather than a person centric.

Next stage is alignment, wherein the manager discusses how the individual can contribute to the organizational goal and fitment of the job and capabilities.. Manager emphasizes the latent capabilities of the employee, reposes confidence in the ability to catch up and expands the role horizon of the employee. The discussion would be open, and transparent to discuss the role expectations, how the role dimensions would impact the short term and medium term, what may be the training and skills sets and sharing of apprehension and experiences. External validation and internal acceptance by the associate is the main objective of this stage. Manager, in this stage, leads the associate with directions towards organizational, team and individual goals as well as supports him in moving forward to achieve the goals. Manager proposes a deliberate break of days to allow the employee to do introspection, carry out minor changes towards the goals and receive internal and external validation of the transformation.

Manager and the employee meet up to recapture the goals, the activities that may be required at organizational, and team level to drive the performance and the individual contributions. Manager digs deeper into the change attempts made by the associate, and appreciates all achievements, however minor they may be. Manager’s focus would be to emphasize the value the associate can bring to the goals and what would be the changes the role mandates.   He also makes the employee reassess oneself to own possibilities of attaining the desired goals and activities. He repaints employee’s motivation to own and drive the desired goal. Once the associate is convinced, the duo need to revisit the drawing board to evaluate the fitment of schemas, assets, roles and acts. In this stage, manager refines and repaints organizational, team and individual goals and describes the best suitable approach for the individual.

The final stage is commitment formalization stage where, goals at various levels are tied, action plans are discussed and detailed, training and support are documented, platforms for information sharing and support are detailed and review mechanisms are accepted. Formalization stage must ensure while the outcomes are important, the pace and tactics are owned by the associate, there is plenty of room for failures and learn without stigma so that continuity commitment is not affected. Formalization stage must also detail informal self-review mechanisms where the individual can elicit the feedback, discuss and digest and push the agenda of improvement by themselves.

Ashwini K. S

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How companies are adopting Holacracy principles to build effective sales teams

For many companies, sales function is an area where outcome is never closer to expectation. Companies suffer from weak funnels, missed closures, lengthier closure cycles, order losses and attrition.  These are the waste that emanate in sales function. It is well known sales teams that hunt as a pack always produce better results than those that hunt individually. Unfortunately, many sales teams discourage sharing of information about networks & influence of client organizations across team members. Many a times a particular sales resource may be approaching a client organization in a certain suboptimal way without privy to alternate courses. Other colleagues may have prior experience of the account and/or situation to tide over the apprehensions. Bereft of multiple perspectives, the sales cycle would linger, and eventually the sales resource will lose interest on the account and drop it from his hunt. Incomplete sharing of information and inadequate planning for a particular opportunity is another challenge sales team face.  Weak alignment, between inside sales and direct sales teams or KAM teams with others is another area that leads to sales inefficiencies.  Role conflicts and tensions may also arise due to operational and personality issues.  Poor policies on account transfer between direct and inside sales team, weak sales operations, and ineffective review can exacerbate drop rates. A salient issue in solution selling companies is lack of comprehensive involvement, poor alignment and ineffective role management between pre-sale and sale teams across various stages of a customer acquisition. Diffused and selective ownership without a complete coverage of customer experience management leads to lengthy customer requirement cycles, protracted customer sign off process and potential financial loss.

Companies are realizing to counter bounded rationality problems, improve commitment and camaraderie within the sales teams, they need to build coopetition teams.  Teams in a coopetition collaborate to address common challenges, and address gaps and yet can remain competitive in pursuit of the individual goals. In recent years, companies like Ternary software, Zappos, David Allen Co, Precision Nutrition and others have adopted Holacracy (the system of self-governance) as an approach to build self-managing teams. Holacracy is an approach to distribute authority across the organization. In a Holacracy the organization evolves continuously adapting its structure and process through ongoing peer-to-peer governance. Common elements of organizations adopting Holacracy principles are a) constitution that defines the roles and distribution of authority related to tasks or outputs, b) roles and accountabilities, c) collaborative decision-making process enabling change in roles and authority consistent with evolution and d) meeting process that promotes co-creation and collaborative working.

Companies adopting Holacracy principles for sales organization implement following. Firstly, they create a leadership ring to build multiple owners who can eschew same corporate and sales dream and chase the horizon. However, unlike the Holacracy organizations, these rings are limited to the first level of sales, pre-sale and delivery management, the organization below each leader is still hierarchical. The leadership ring collectively evaluates opportunities, discusses approach or various sales motions (national, key accounts, acquisition, strategic account, label wins), creates proposals and pricing models, and comprehensively manages customer interaction.  The group runs as a virtual organization within the company. They validate customer requirements, aligned design and delivery, and eliminate rework. Recognizing the need for flexibility to counter exigencies, leadership ring has weekly rhythm meets to discuss progress and exceptions. Any engagement model deviations, change requests, requirement changes or client leadership exits are discussed openly, opinions are considered and a comprehensive approach is arrived after considering multiple perspectives. One strategy is collectively approved individuals are given complete ownership ad freedom to pursue the actions. To support the changes in the roles and ownership of different teams over the life cycle of a customer engagement, the sales teams build a culture and process where different people wear the leadership hat. In the initial part of customer engagement, sales resources own and direct inform and influencing of customer. However, a pre-sale expert takes over the solution enumeration and client acceptance, after which the sales leader and pricing teams dons the mantle. Finally, the crown comes back to the sales resource to chase the closure. Once the order is picked, the mantle moves to delivery as the prime owner and sales as the secondary owner. Finally, what distinctly distinguishes “Holacracy” team sales reviews, is this is not the typical high octane name calling threat laced ritual. The review system moves away from status and fault finding to status and solution offering. Each review meeting is initiated with a revisit of the purpose and with a focus on actions by individuals and team can impact positive outcome.

Companies adopting Holacracy principles for sales must understand it is a cultural change and requires both management investment and patience.  Sales team members must experience the trust and openness to share everyone view and the collective decision making. Parochial leaders may find the process limiting insular control of team and threatens group politics.  Importantly the ability to steer the focus towards “problem solving” than “one man up”  behaviour is the key to the success of the program.

Vasavi R, Sai Vinoth and Dr TR Madan Mohan

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Congregation Branding: Insights from Indian Mela’s

Congregation branding or mass branding is a unique method to reach a large number of peoples at a very low cost. It is when a large number of people congregate for a short duration, often for religious or faith interest. Events like Kumbh mela, Sabarimala or Pushkaraulu are mega congregations where the millions attend. Kumbh Mela which occurs once in 12 years, witnesses more than 100 million thronging the banks of River Ganges and its tributaries. Similarly, Sabarimala, a hilly place in Pathanamthitta District of Kerala State in India, has about 40 million peoples visiting the shrine annually. On the grandeur scale is the shrine of Tirupathi in Andhra Pradesh, the second richest religious institution in world which attracts at least 60,000 devotees on regular days and 8 -10 times the number on special occasions. Local festivals like Sonepur Mela, Asia’s largest cattle fair, in Bihar or Velankanni in Tamil Nadu attract about 2 million people and these footfalls are for just 3 days.  It is not only religious events that offer a platform for branding, festivals like Kadalekhai Parikshe in Basavanagudi or Fish downing sessions at Goud treatment center for asthma patients at Hyderabad or New Year crowds around Taj Hotel in Mumbai are all perfect platforms for congregation branding.  Holi Milan Samaroh or Baisakhi celebrations are apt for congregation branding to reach out to mass consumers. With India celebrating 120 festivals in a year where more than 100,000 people congregate, congregations offer a unique platform to reach out and engage with customers.

The advantage of congregation branding is it helps brands to reach out to consumer who may reside in media-light or are low TV and print penetration areas.  Congregation branding helps to marry the essence of the event with the brand proposition.  These events are not only attracting FMCG companies, but are finding new takers like agricultural equipment manufacturers and FMCD companies. Congregation branding exposes people to various brands to become potential buyers as well as opinion leaders and brand ambassadors.  Congregation branding drives social approval and recommendations.  It is a low cost approach to reach out to large user base. It offers the opportunity to consumers to touch and feel products. Pepsico uses the congregation for sampling of new innovations (Nimbooz Masala Soda or Butter Masti flavor of Kurkure) and enhance brand visibility.

Congregation branding is a high visibility and high impact strategy.  Companies use five types of branding approaches:  a) Freebies, b) small packs, c) service centered, d) artifact based and e) entertainment led. Freebies, small packs and entertainment led are excellent approaches to expose product consumption experience and win over customers. Service centered and artifacts based are effective approaches for surrogate branding.  Freebie is a common strategy used by FMCG companies. Tata swatch water purifiers installed 300 water purifiers for Kumbh Mela. Similarly, Marico provided Rs 1 Parachute sachet packet. Dabur put up automatic toothpaste dispenser with the tagline “Kya aapne dant snan Kiya? (Did you wash your teeth), with images of Dabur Meshwak and Red prominently displayed on the container. Tata Salt distributed 35 tons of Tata Salt to various akharas. They also gave away disposable plates with “Shubh Bhojan ki Shubh Shuruwat” (auspicious beginning for an auspicious lunch) with Tata Salt prominently embossed on it. Godrej provided hair die salons and Shanthi oil installed free oil massage centers at various akadas (sectors) for product experience. Small packs are fit for occasion and value for money propositions that help brand association and recall. Coke offers 150 ml of cola at Rs 5 and HUL offers Vim bar (washing bar for utensils) for Rs 4. The products are appropriately packed and priced to meet “use and throw” requirements of the rushed Pilgrim.

Companies can also purse surrogate or indirect product branding approaches. For example, a cement company can provide water or sanitation tanks or paper fans for convenience of the attendees.  Companies could pursue surrogate branding in multiple ways.  Surrogate branding could be fashioned around the “event” or something that is of regular use and not necessarily associated with the event. Using service mapping tools such as blue printing companies can gain a complete view of the customer experience cycle. They could identify physical infrastructure, hygiene and health related requirements, crowd control and management system that may be required to provide a safe and complete event experience. Companies could choose to adopt highly repetitive and commonly consumed services or infrequent selective services. Companies can identify service that has higher impact and one that is closer to its product/service.  Aligning branding with the moment of truth is key to effective crowd branding. Eternit Everest cements provided tents and roof shelters to pilgrims and telecom companied offered branded Umbrella’s, and light holdings at night times. Vodafone provided scarfs with their logo on them so that pilgrims can protect themselves in cold nights. A cement manufacturer may offered free rides or free group housing. Such an offering would be group based. A pharmaceutical company can offer free health care center and ambulance services, which are critical and personal in nature. A telecom company can provide a public address system and location based identification for missing persons. Such an offering could be context dependent and critical in nature. Healthcare, travel and personal loss related services offer longevity of WOM, while food and hygiene related may have shorter WOM.  Surakhsha Wrist Band, a water proof band promoted by Nerolac, received high appreciation from families.  Children and elders who received the bands were seen raving about it and flaunting it prominently.

Amulets and Idols are appropriate mediums to reach out to pilgrims and others thronging the meals.  Companies find idols of Lord Ganesh or Lord Hanuman are the most accepted across different pantheons and sects. Their child like innocence and simplicity of faith make them highly amenable to various socio-economic groups.  Amrutanjan, the popular pain balm erected a 16 feet statue of Lord Hanuman made with empty Amrutanjan boxes.  Ranbaxy offered Hanuman chalisa to pilgrims who visited kumbha mela. MNC have also pursued this strategy very aggressively. HUL engaged Sudrashan Patnaik, the noted sand sculptor to create sand art installations of Lord Jagannath on the beach in Puri. HUL Dalda oil was subtly placed on the canvass. While men and women do involve in crowd branding, it is women fold who tend to carry the artifacts back home.  Whether brochure or religious books or other artifacts, care must be ensured in designing it useful and colorful from the other gender perspectives. Marketing professionals must consider the investment, impact and reusability of artifacts before they choose a particular approach.

Entertainment, the wholesome kind is the best way to reach out to the crowd. Once Pilgrims have completed their faith related ablutions and associated rituals, they tend to have some time before their return journey home.  Tholatta, and Throw a ring are what GlaxoSmithKline found useful to draw and engage customer to get in touch with Horlicks. Throw a hoop and gain a sachet is an excellent strategy to gain interest, interactions, sense of achievement and brand association.

Sai Vinoth T R

 

 

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Successor Selection in family business

Family business continuity depends upon clear demarcation of rights, expectations and responsibilities of family members and their extended relations. Succession is a key factor that can lead to odious conflict if the selection is not felt fair by all members. A wrong selection can jeopardize the very sustenance of the business itself.  Successor selection in a single owner business or cousins consortia the criteria remain same.  Successor candidate for a family business must possess:

  • No vacillation of taking charge
  • Alignment with personal dream
  • Strong family (sibling) ties
  • Strong leadership skills,
  • Drive to scale

Not all progeny would be interested in working for family business. Identify who is interested and committed irrespective of gender and on tradition of first born. Incoming family member must be clear in owning the role and responsibility. They must exhibit “strong skin in the game” orientation in all areas including planning, execution, feedback and improvements related to the new role. If there are any signs of ambivalence, then family elders and family board must search somewhere else within the family or alternately bring in professionals to run the business while family oversees the business and family interests.

 

It is important the family business forms a part of personal dream of the successor or at least allows her to anchor to explore personal dreams. If the alignment between personal dream and the family business are weak, the succession may not yield significant results. Higher alignment would ensure the successor brings more passion and commitment to growth and transformation of the family business.

Family business successor must not only be adept at managing business, but must be able preserve and nurture family ties.  Successor should have an ability to delineate family and business rituals, positions and carry family branches and interests in all fairness. In family businesses with well entrenched non-family professionals, the successor must be able to build rapport, influence and advocate required changes to set the business to next level. The successor must be capable of leading other family members on investment. Successors who exhibit a strong player-coach orientation perform better as they can collaborate and lead within and across teams.

Successor in family business must bring strong leadership skills. The successor must be comfortable in exercising leadership alone, review and critique associates wherever necessary. Successor should be able to show tact and respect to family and non-family associates who may be involved in the business, and yet direct them to reach the desired goal.   Successor must exhibit a high dose of candor and sense of urgency, especially for anything related to bad news. Successor must be evaluated for their team building, ability to tap talent and instill a culture of excellence.

Family business succession is not just about leading existing business, but also a stage to move to next level of expansion. The expansion may come from scaling up production or entering new markets or scaling out to build competencies and capabilities to seek out opportunities in other areas and realize the growth potential. Successor in a family business must have the drive to obtain inputs every quarter, validate these inputs and act on them to realize the goal.

While family elders and board may have high access and knowledge of a successor as an individual, whenever contenders exist ask for a business plan from each. The family elders and family board must check whether their approach clearly captures the business and family dynamics, dreams and action agenda.  Once a successor is selected family elders and the board must establish the business parameters, discussed and communicated the same across multiple interest groups to buy the succession plan well in advance. Once a future leader is identified, start mentoring the person through on-the job exposure and empower him to learn and implement changes. If the family prefers to expose the successor to learn the ropes in outside business, create alternate investments that may not blow a big hole in the family books, but de-risks existing business from transition. Succession plan must detail how the first 3 quarter of induction and transition happen. Identify respected non-family mentors who would take the new ward under their umbrage and fill in “implicit knowledge”. Do not burden the successor with constant reminder on results, instead focus on outcomes. Obsession with results can induce an undue pressure on the successor and induce her/him to focus on short term gains. Remember succession is an opportunity to rewire your business. As John F Kennedy rightly said, “The time to repair the roof is when the sun is shining bright”.  Thinking strategically about the selection process enhances the quality of successor and the survival of the family business into next centenary.

Dr TR Madan Mohan

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New defence policy long on getting production in place, short on innovation

Government policies can drive a substantial impact on an industry growth, more so if government happens to the buyer. Defence industry is peculiar because in many countries, government is the major supporter, manufacturer and end user. Mr Manohar Parikkar, Defence Minister on 28th March 2016 announced new defence procurement policy (DPP-2016) at the DEFEXPO happening at Goa. The core of the new policy is to boost home grown defence industry and further Prime Minister’s “Make in India” initiative. The focus of new defence procurement policy is heavily on promoting India designed and made weapon systems (IDDM). The policy has clear directions on the procurement preferences: India designed and manufacture (IDDM) weapon systems would get the highest priority compared to license manufacturing or global import. While the policy has announced local content for qualifications, lets understand what DPP-2016 is attempting to do.

First, it is trying to address the legacy issue the defence industry faces, monopolistic defence public sector units (DPSU). Services (Army, Navy & Air) have long suffered inordinate delays, corruption, and misplaced engineering and R&D focus.  In the last few years, the DPSU have been flushed with so many orders that one of the PSU head jokingly said they could completely lay off their marketing team for next decade.   Defence ministry recognizes the need to bring in dedicated partners to de-risk delays in production of imported systems and subsystems. Under DPP-2016, defence ministry can seek private or DPSU units compete for weapon system design and development. Defence Ministry can select two “development agencies (DA)”, will subsidize 90% of the agencies weapons development cost and assure the DA of major share of the production order.  Pursuing this strategy is not going to create large defence innovation engines, but contractors like Raytheon or Northrop Grumman to ensure production schedules are met.  DA is not a silver bullet to drive innovation or “Startup India” program of Prime Minister, but a well thought out and practical policy to create private facilities.  DA’s may work on technologies, systems and subsystems from abroad, bring in system integration efficiencies. The game plan is to excite local players like Tata, Reliance, Mahindra’s to partner, build large facilities and develop local system integration capabilities. In medium run, this policy may have a spill over effect on Aerospace and Cryogenic Industry’s manufacturing requirement and allied services. The new policy envisages more industry involvement right from feasibility stage for major weapon buys and service requirements. This should eliminate the frictions that arise in design-delivery cycle as requirement gathering, standards and integration are detailed and purposeful.  We will see better design coordination in large complex projects like IFCOS and others. Hopefully, we will not see the lack of ownership and creep in multi-agency defence projects.

DPP-2016 has clearly failed how it would support innovation and MSME development. Traditionally innovation in defence industry has come from multi-party development involving government, large contractors and research institutes. In recent years, several disruptive technology innovations have emerged from rank outsiders as the demarcation between military and civilian applications is eroding.   SME play critical role in not only developing new technology, but also develop subsystem components where OEM support ceases or design appropriate digital replacements for analog components. Antiquated procurement procedures with norms such as minimum number of operative years, or capital adequacy norms and L1 pricing discourage SME’s. Defence programs can only be successful if the defence ministry shift away from tender based to need based procurement wherein the Services (Army, Navy and Air) and DRDO labs can procure novel technologies.  Most MSME operating in the sector are underinvested and need flow of cash to sustain. Defence ministry should consider support to private sector through targeted R&D incentives, access to low cost capital, priority lending and increased slab of CGSTME Scheme.  DPP-2016 is a definitive program to boost home grown defence industry and remains a work-in-programs. Hopefully when it is reviewed after six months the new DPP-2016 will address all concern areas and boost India’s defence industry growth.

Dr TR Madan Mohan is managing partner of Browne & Mohan. He is associated with several MSME defence companies advising them on scaling up, growth and global expansion.

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Priming your Industrial (B2B) sales…..

Industrial or B2B presents unique set of challenges.

Vendors may be selling to an intermediary for example an EPC or a contractor who in turn may be executing the project for an end user. While the intermediary may be more concerned with price, speed and availability, end user may focus on quality and performance. Managing diverse decision criterion requires fine balancing of relationships and strategies.

  1. Getting the product as an industry standard or emerge as a default choice is most important part of marketing. This may require informing and influencing not just the end user, but intermediaries like EPC also. Importantly the design folks within the client organization and outside need to be influenced and won over.
  2. B2B environment is highly competitive, in fact in some segments your former employees may be working for your competition with complete tacit information about sales strategy. Often there would be handful of customers with balance of purchasing power tilted towards them.
  3. B2B markets also highly exposed to commoditization. Pricing pressures could be high. Product cycles may be shortened by innovations and substitutes emerge often to displace the markets.
  4. Replacement market is a major growth opportunity. But the decision-making can be short, and unscientific. Replacements are made are 3rd party advice, availability, and price rather than quality or performance.
  5. White labelling or contract manufacturing is yet another sales growth opportunity that brings its own challenges of cannibalization of focus.
  6. B2B sale requires sales process to be customized to the procurement process. Unlike B2C business cold calls by themselves will not get business. According to a Forbes article, more than 50% of B2B sales resources consistently miss their targets. Many orders fail to materialize as the arc of meeting; educating, influencing and closing the order have been missed.

 

How can one ensure their B2B sale is firing? Right structural alignment, adherence to process to capture the activity at each sales stage, and appropriate incentive systems help a company realize right sales outcomes is what I actually needed to make B2B sales happen.

Get the right rhythm of activities between arc of initial meeting, mapping of key decision makers, product education and influence, defining right commercial terms and closure. End users need to have a solid reason to place an order, may need to follow up documentation and hierarchy before the decision is made.  Customer segmentation, need analysis, profitability and associated risks must be weighed much before you respond to an RFP.  If the end user happens to be government or large organization additional challenges of bank guarantees, penalties and receivables must be evaluated in detail.

With increased adoption of mobility and availability IT tools, companies can use appropriate structural arrangements to minimize the cost of sales and yet improve reach and conversion. Sales structures must include not just direct sales teams, but inside, partner and product teams that complement the direct sales. Create a dynamic sales organization that not only covers the markets, but builds partners and ambassadors for it. A dynamic sales organization must include:

  • Inside sales – Identify people, Google search, secondary data
  • Sales Executive – Feet on street, Coverage, Meet people, Verifying data and collect Information
  • Branch Manager – Administrative Cover, Link with Technical and Project people, Pre-order and post-order point of contact
  • Product Manager – Technical specialist, Influence Design/ Technical team, Identify the cost saving technical options, Match/ Improve technical
  • Regional Manager – Business Leader for the region, Price and Margin manager
  • General Manager – P&L leader, management representative, maximum interest with company and across company, Revenue Leader

With new technologies B2B companies must realize sales resources are not the only one to open door and neither opportunities nor marketing is the exclusive promoter. With many B2B buyers self-educating using tools like social media, vendors need to effectively empower and promote product and application engineering teams to network and influence the ecosystem, right from design companies, EPC contractors, Standard setting bodies and user community. Role of product management that helps in inform and educate, influence the design and procurement teams by its expertise and bring alignment between requirement and solution is often under invested. Product managers are key to requirement gathering but also define the specs of an RFP.  Promote product management –client and design interactions at all levels.

Invest in sales operations. Sales operation has different meaning for every company. In some, sales operation does number collation and crunches data. In some they are responsible for system, programs and process. In some they are responsible for pricing and participate in large complex deals. Fundamentally, the role of sales operations is to capture the data related to sales activities, and help sales team to make decisions based on data rather than subjective assessment. Sales operations more than just being a data sink, helps integration benefits to the organization by linking various activities.

Make available non-sales oriented platforms and information content to inform, educate and advocacy of their expertise and products.  More educational content from a B2B vendor helps in build trust and respect for its expertise. Share original content on social media platforms and optimize for search. Companies that go beyond their product range and address the complete industry are seen as leaders and more such content augments the credibility of the company’s brand.

A major change B2B vendors need to make to their sales strategy is to consciously move away from the decades old sales playbooks they treat as mantras. B2B vendors who just moved their sales process to modern technologies without fundamental changes in the sales engagement find the results are always below expectations. With the new technologies and information intensive markets, B2B vendors may have to rework their sales playbooks but also rethink how they are enabling the sales person to decipher and deepen the customer’s knowledge. While adopting the new technologies ensure the playbooks allow sales resources to adjust their individual strategies and styles to add value to the sales engagement process.

T R Saivinoth

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How B2b companies can benefit from Youtube marketing

While many of us associate YouTube with videos of cats or people falling off their skateboards in new and interesting ways, the reality is that YouTube can be an extremely powerful weapon for a B2B marketer. In a recent study, the top three social networks for online B2B marketing are Twitter, LinkedIn and YouTube. With more than 800 million unique visitors each month, YouTube is now the world’s second biggest search engine. More than 100 million people take social action (likes, shares, comments, etc.) on YouTube every week.

In addition to providing your prospects with information about your product or service, a YouTube channel is also important from a brand equity perspective. HP, for example, has a large part of their channel devoted to their work in health and education. In a press release or blog format the average prospect may not ever bother looking into this kind of material, as it doesn’t have a direct connection to the buying process. But if a prospect is considering purchasing a new printer for their business and is watching a product demonstration video on YouTube, they are more likely to do so. By establishing an emotional connection, HP is able to position its brand in the prospect’s mind as caring and trustworthy.

Youtube is humungous. Each minute about 400 hour worth of video content is uploaded, but only  5% may elicit more than 10K views. 50% of all YouTube views come via a mobile device and the average time spent on YouTube per mobile is about 40 minutes. YouTube has more than 1 billion active users surfing the site. Importantly, for most companies the promotion is free and always available. Even if your content may not reach top 5% of the post, it could serve as an alternate marketing asset to inform, and influence customers.

As a B2B company, you can gain the most from YouTube marketing if you can stick to some fundamentals listed below.

  • Making content stand out: Well we all know the power of viral videos. People will actively share unique content on their social media networks, even if it’s associated with a brand. The key is to include your brand or product in the video in a way that’s not so invasive that it feels like an advertisement. A common technique used to encourage sharing is humour, but it might also be the format that captures the prospect’s attention (e.g. using a unique animation or live action scenario to tell your product’s story). You need to plan out the needs and essence your video is going to fill in your prospect’s mind and heart.
  • Make it easy to find and share: After uploading a video to YouTube, make sure to give your videos searchable titles, well described & brief descriptions and lots of tags. Embed videos on your business website as well as its social media platforms (Facebook, LinkedIn, Twitter and Google+). If the video resonates with the prospects, they will react to it and might share it on their own social media accounts.
  • Put faces to your brand: Great thing about YouTube is that it allows you to put a face to your brand; this is extremely important in building trust with your prospect. It’s often better to use real people from business or mascots representing your brand or company. Prospects get attached to these adding a layer of transparency which is often extremely difficult to establish using traditional online marketing such as blogs, whitepapers, online forums etc.
  • First few seconds to impress: YouTube is all about small sized (length) video content. Use it to get attention in short span and condense your videos to 2-3 minute on specific areas of interest, e.g. product feature demonstrations or testimonials. According to 8-second rule, research has indicated that if users have to wait longer than 8 seconds without any attention seeking action or interest, they will go elsewhere. Because there is an ocean of information waiting online to get their precious attention. You have only 8 seconds to impress a person & to get him watch your whole content, so make first 8 seconds impactful and rather creative than just showcasing your product or feature. You need to take an innovative route to enter into the mind of the prospect for a sustaining impression. Be creative and sometimes be more natural. Shoot, animate, use info graphics etc. in your video to make it more compelling and informative according to your content.
  • One video many use or a particular use: More specific content is also helpful from the perspective that you can utilize the video or the YouTube link to focus on a particular product/service in your target email marketing campaigns & product description pages in your website. Whereas generic informative and rather flexible branding videos can be used in you landing home page to describe what your brand is all about. This will increase the engagement time prospect surfs information about your brand & will generate an impactful visit to your website.
  • Take time to create your own brand space with a YouTube channel to make it easier for your users to find all of your video content at same place. Include links to your site, campaign information, conference updates etc. Encourage comments and subscriptions from viewers. Listen and react to what’s being said as feedback or comments. Take positive notes and keep on the light glowing around with more inputs and changes. Treat your prospects comments as advices & necessary recommendations giving your marketing a continuous boost for years to come.

Vikash Prasad

 

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“Super boss” owners in successful family businesses

Family ownership is the most prevalent form of ownership structure in many countries. Unlike a corporation, family members and their extended relations may have different rights, expectations and responsibilities in the business. Unlike a professional leader, family owners tread a fine line of balance within relevant control and empowerment to sustain their businesses. In my interactions with some of the family businesses, I had the great fortune of meeting super boss owners who not only bring unique and collaborative approach with clear strategic direction, effective policies and procedures, effective communication lines and appropriate delegation that propel employee morale and productivity. What distinguished them from others?.  Firstly, they had a clear vision of what to focus on in terms of business areas and operational decisions.  They chose an area they are comfortable with and brought in professionals to run the other parts of business. For example, a Coimbatore based agricultural attachment company’s founder kept innovation and product development activities with himself and a professional CEO to run operations and sales. Same is the case with a third generation women super boss, who knew her strength was in marketing and brought in senior professionals to manage a complex manufacturing plant.  Super boss owners saw themselves as disruptors of status quo and were always listening and evaluating multiple areas to extend their business. Unstinted passion and intensive efforts around uncovering the value of their business made them unique. Super boss owners have consciously developed an ability to look at grand picture, and hone on to details whenever required without being struck at it.  Secondly, they are good at developing talent. They invested lot of time and efforts in recruitment. They were not afraid to hire people from other industries.  They spent considerable time and efforts in hiring and managing the individuals.  Super boss owners exhibit strong belief in nurturing talent and they are not afraid of hiring people from different backgrounds and industry experiences.  A second generation super boss had developed a unique way to identify talent.  She would have monthly meetings with senior professionals from industry or other family run business owners to elicit names of smart people. She would use informal methods to meet up and assess the person for in many informal settings to identify the initiative taking ability, creativity, and intelligence.  Super boss only managed the individual not his/her team and set impossibly high standards to push the entrants to limits.  They invested in rituals and process to create personal bonds and loyalty between the new entrant and themselves. Super boss completely trust their protégé whether family member or a professional to run the task. They signal at all events and functions the new leadership and completely let go their involvement. What I found particularly interesting is their ability to encourage their protégé to fail and refurbish and invigorate the business process. Super bosses realized the need for reinventing newer structures and had no qualms about burying their pet ideas that have long lived their utility. What I found unique about the super boss owners is their superb listening abilities. They made efforts to seek out information from all corners without creating an atmosphere of informers, abhor politics at all levels and let go information which were not key to the business. One such super boss had a simple rule, my doors are always open for our company and your family,  but no complaints.  In sum, super bosses followed a simple four box formula: focus – hire best – empower – intensive interactions at all levels.

Dr TR Madan Mohan

 

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