From furrows: Independent directors in unlisted private limited companies

Most companies in India are promoter-controlled and promoter-managed. Private limited companies are the most prevalent form of formation. Often the promoter and family constitute the board. In this kind of a set up the largest shareholder also holds management reigns and agency problems that arise in investor led companies does not arise. However, as these companies expand, promoter led companies realize a need for formalization of board not so much from regulatory requirements, but more so develop a mechanism to mitigate self-serving interests and bounded rationality problems.  Management realize while there is no shortage of advice on how to run their companies there is a need to seek our professional, unbiased and consistent inputs to improve the way of doing business.  On boarding independent directors is seen as a first step in improving corporate governance in these companies.  Industry knowledge, prior board experience and networks that can open doors is what unlisted companies seek in their independent directors. The expectation of unlisted companies is apart from the code of conduct laid down under the Schedule IV of the Companies Act, 2013, is that an independent director would:

  • Support board for promoting success of the company
  • Engage deeply in developing and sharpening the business goals, strategy and implementation plans
  • Critically review company’s progress towards the set objectives and revise directions wherever necessary
  • Financial and non-financial process are compliant and fair

From our experience of working with unlisted companies the key contribution of independent director apart from what is listed above is in three areas. Firstly, unleashing the leverage points of the company so it can realize its true value with incumbent resources and capabilities and realign growth plans. Independent director must contribute to redesigning of the strategy, how solid are the products and services, threat of commoditization, revenue streams and new offering.  While strategy on products and services front is the easiest, the challenging part is the articulation and execution of strategy to wean away promoter or management from execution to strategy.  In our limited experience, we see two kinds of dilemmas here. It is not that promoters are unwilling to let go, it is just identification and transition to an outside senior management does not always end up as expected. In some cases it is simply the core rigidity and NIH syndrome, especially in partner led companies. Business development and enhancement is another area unlisted companies seek help from Independent directors. Companies expect independent directors get actively engaged in business development by making right introductions to prospective clients. Connecting to the ecosystem of vendors, OEMs, government agencies, labs and professionals is another area independent director contributes for business expansion. Independent director plays a key role in reviews. An independent director must scrutinize the performance and risks of the business. Other than financial information, Compliance, controls and systems are key areas to review.  Independent director must advice in simplification of reporting (say from an aggregated cost head such as Salary & admin costs to broken down independent cost heads) so that efficient controls can be brought it.  Profitability, de-risk and sustainability form the fulcrum of reviews for independent directors.  Independent directors must evaluate the business model, areas to improve including automation, non-linear options, outsourcing, productization of services and new revenue streams that could be realized by unbundling services and products.  Prodding on reducing people side cost is another area that independent directors can drive innovative hiring and engagement programs. Questioning the dependencies and exploring options to de-risk the company from market, customers and technologies is an area independent directors must contribute. G8 or G10 strategy to focus on few top customers may be a good strategy from reducing cost of sales, it may not be a great approach from scaling up an innovation. Independent directors must help identify standardization of services, scaling up of an offering from a group of customers to market or even help productize. Ability to visualize scale and connecting the dots are key characteristics Independent directors must hone. Independent directors must also prod the company in evaluating the dependence on key people or limited management bandwidth. Independent director also has a key role in dispensing with status quo, i.e., sustainability. By constantly asking for extending the reach and newer offerings, they must prod the company towards recognizing newer friction areas and associated revenue monetization opportunities.  Key to fulfilling the role of independent director in unlisted companies is to consciously remaining in independent zone and prioritizing the change process. Independent directors must share their apprehensions and views freely and be open to receive feedback that helps them to refine their views. Finally, independent directors must learn to stay away from Pal syndrome, staying on the surface and yet unconnected with roles and internal conflicts.

D Balasubramaniam and Dr TR Madan Mohan

 

SFDC Implementation: ways SME can make the investment impactful

Many SME adopt SFDC to drive transparency and efficiencies of their sales operations. They initiate the roll out with a lot of pomp and gusto, but do not witness the outcomes they have envisaged.  The implementation process goes awry, frustration creeps in, staff loose motivation and despite all the right start SFDC implementation loose its mojo. Reasons for this are plenty. Based on our experience we find seven deadly sins listed below are the major ones.

  1. DIY woes: Often, companies with 5-10 licenses believe SFDC is easy to roll out and they know all that is required to about SFDC fall into a DIY trap. SFDC is simple, and yet can be daunting to the founders and management of SMEs if they are new to such software. The complex functionality and features of SFDC need deeper understanding of not just the software but how it would be used to extract value for their company. Companies pursing DIY route end up with broken process and demotivated employees. This creates confusion in process design and leads to low adoption and utilization in many organizations. Also, does not force fit your time tested sales process to SFDC. This not increases the cost of customization, but actually impairs adoption of best practice.
  2. Whammy Cycles: In our experience, many SME choose to pursue SFDC without due considerations of their business cycle faced stability and adoption challenges. Salesforce or any sales software is best to be implemented during lean periods not during the high tide quarters. SFDC roll out requires sufficient training and hand on experience to gain adoption and depth of use. Drawing sales resources away from the market during high tides affects revenue recognition.
  3. Double timing: Whenever salesforce is rolled out, companies need to plan how they would pursue the sales planning and review in their current format and also planned adoption of SFDC. Companies need to adopt a business as usual data capture and review process, till the SFDC adoption is complete and stable. Maintaining sales administration around both BAU and new process is key for sales management.
  4. Data Despairs: Generic tools like excel spreadsheets are used in company for data collection and reporting at various stages of the sales cycle. Data is crucial to glean historical insights. Different formats are used during sales planning, sales activity, sales review makes data migration a tough task. Unfortunately, many SME do not realize the time and efforts to clean up and migrate data and they believe SFDC roll out must wait till all historical data is ported into the system.
  5. Rush Hour drive: SFDC like any other software necessitates change management. Start with a broad 90 days adoption plan, with intermediate milestones for team training, leadership absorption, salesforce administrator review and beta roll outs. Without planned schedules, emphasis on compliance and rush jobs, companies end up pressurizing their resources, but end up with poor adoption. This is a primary reason for disillusionment of SFDC roll out.
  6. Misaligned teams and incentives: Many sales teams discourage sharing of information about networks & influence of client organizations across team members. A particular sales person 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.
  7. SOC Underinvestment: For many companies, sales operation is an additional expense. Usually they would have a personal secretary or a junior clerk do the data management and generate basic reports. Sales operations also need people person with enough tact to obtain information without stepping on the boot. SME do not recognize SOC has key role in ensuring data availability, data integrity, support and monitoring of the resources. Sales leaders in SME sometime don the role of SOC without dilution of their priorities.
  8. Measurement errors: One of the key problems in sales is to choose the right metric on which sales resources are measured. The metric chosen are often not in alignment with the sales objectives set by the management. If the objective of the business may be sales improvement by up-selling a new product to existing customers, then the metrics chosen must be aligned to this. Measuring coverage or addition of new customers to the pipeline because we always did so is a classic case of misalignment of metrics and objectives. Many SME measure their lead generation team by number of mails sent and calls made in a day. Lead generation representative earned their incentives irrespective of whether their efforts were meaningful and delivered any tangible outcome. Measuring performance against the wrong metric results in ineffective incentive calculation. Beware, you may be setting up your sales to loose, not win.
  9. Parsimonious Training: Sitting on shoe string budgets, SMEs take train only a few people or let leader train approach while implementing SFDC. With leaders juggling multiple roles, if only leader is trained, people on the field are ignorant of the features and purpose of SFDC implementation. Learning and adopting is seen as tedious and time-consuming by the busy sales force. On the other hand, if the sales resources are trained to use SFDC and no training for management, the roll out may not get the visibility required to make a difference. Either way, the lack of training hurts the overall purpose of achieving sales improvement through CRM.
  10. Acrimonious Reviews: In many SME reviews turn out to be generous expletive session which leaves an acidic taste for the participants and satisfy the ego of leaders. SME also suffer from data itch at inappropriate levels. It is not uncommon to see balance between big picture and details lost at several layers of sales organization. Functional focus and sales objectives get messed up and review meetings end up meandering around specific accounts or a customer at the cost of overall funnel.  It is not just what is reviewed, but how often it must be reviewed is another challenge for SME leaders. Some SME leaders resort to daily review meetings even when they are not in run rate business.

What must SME do get their SFDC roll out return higher moolah than what they have invested in terms of money and efforts. Simple, plan in advance, manage roll out and keep it simple. Here are the tips to get the best out of SFDC implementation.

  1. Work with partner ecosystem: SFDC ecosystem hosts partners from around the world who have experience and expertise in implementing SFDC. Involving partners will bring industry best practices to the company and help maximize ROI. Process design and training services are also offered by SFDC partners. Partners make a huge difference by bringing industry best practices and insights on salesforce administration and review.
  2. Blending Times: The management should understand the business cycle and choose a time when the sales force is not pre-occupied for roll out of CRM. If the company sees higher activities in Q1 and Q4, our recommendation is to roll out SFDC in Q2. This would give the sales team time to understand, absorb, and adopt before the start of the crucial last quarter.
  3. Parallelize rollout: In our experience, SFDC process roll out and existing process must be running in parallel for at least 45-60 days. Parallelizing the process addresses adoption challenges, especially the front end sales resources. In our experience, the ease of use and simplicity of the process is vital for SFDC adoption.
  4. Plan Data Migration: Encouraging the sales teams to clean up current data by provisioning some time for this activity eases post-implementation challenges. Outsource data migration activity to third parties, the cost is abysmally low and keeps your staff engaged in most value impacting sales activity.
  5. Planned change: Implementing SFDC in the relatively quite periods during the sales cycle gives enough time for the sales resource to understand the working of new software. We recommend a 90-120 day period before the company can achieve maximum utilization of the CRM. Providing time initially can go a long way in acceptance of the CRM tool. Setting a date for going live and working back from that day in a 3-4 month time frame can help achieve better results upon implementation. Setting milestones for data clean up, data migration, training for staff and leadership, designing sales process on SFDC and finally going live makes the process more efficient. Stage gating also gives agility to the process. Review at each stage helps the management identify any possible challenges and suitable alterations can be recommended. This reduces the chances of major upsets once the process is complete.
  6. Gamify metrics: As discussed in the earlier section, if the objective is to up-sell new product, to the existing clients, metrics like revenue growth from key customers or % of deals progressing in key accounts must be measured. Many CRMs like SFDC have gamification capabilities. Gamification is the process of creating a game experience in a non-gaming environment. It helps improve sales by rewarding and recognizing the individual or team performance against the metric chosen. Gamification can be used at various stages of sales cycle. If the objective is sales improvement by up-selling a new product to existing customers, creating a gamified experience which rewards the sales force every time they meet this objective can motivate the individual or team to perform better. Points can be awarded for collaborated efforts from members within a team leading to faster closure of deals. This will instill the spirit of collaboration. Hence, business result and behavior improvements can be achieved by the right use of gamification.
  7. Copious training & Ownership: It cannot be emphasized enough that educating all concerned about the purpose and use of the CRM is the key to implementation success. It can be argued that with proper training, all the other challenges that organizations may face can be negated. It is critical to enable the sales resources to use the technology provided to them. Unless the people on the field enter the data, mangers use it to review and plan; management cannot expect high ROI on the CRM. Through training, the sales department should be made aware that SFDC, will be their ‘single point of truth’ for all their data. Management’s forward looking aspirations must be clearly communicated. The sales force should know that SFDC is a tool to help them perform better and not to create a sales accounting system. Compliance through ownership of the process must be the goal of training. Reinforcing the idea of giving support and training them to use it should lead to success in CRM implementation. Decentralize teams across product lines or focus (hunting vs harvesting), define broad contours of ownership & tactics.
  8. Invest in SOC: Sales operations centre or coordination has different meaning for every company. In some, sales coordination 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 coordination 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 sub-sales motions, right from inside sales to direct sales. While many sales resources may have love/hate relationship with the sales, creating and sustaining the sales coordination and review operations is a must for successful sales improvement plan.
  9. Focussed Reviews: SME leaders forget the sales review is to evaluate the direction (market and offerings), pace (movement between stages), and behavioural correction. Erudite sales strategies can only yield result if they are embraced and executed with right breadth and depth at various levels. Encourage your team to share the presentation in advance, keep the review period short, and stick to the set agenda. Leaders must come prepared with areas that need to be addressed and use the podium to invite suggestions and solutions. Effectively engaging and connecting with sales team at strategic and execution level is a must to see the intended outcomes. Sales leaders must demonstrate their ability to take tough decision based on data. Reviews must involve sales, marketing and product teams, and bring visibility across the company. Finally, reviews must go beyond sales activity to know what is working and what is not and how to improve it.

Peter Seller’s, Being there (1979) Hollywood film, has an interesting message. In the movie, US President asks a simple and sheltered gardener whether growth could be simulated through temporary incentives. Sellers who played the gardener makes a profound statement, garden needs to watered regularly, weeds needs to removed and roots supported to run deeper to survive across seasons and witness growth. Companies adopting SFDC must understand CRM is a cultural change and requires investment, management efforts and patience to yield results.  Sales team members must experience the trust and openness to share everyone view and the collective decision making.  To get the best out of your SFDC, keep the focus beyond template, keep the migration simple, involve all concerned and reap the benefits.

Bhavana S Kashyap and Dr TR Madan Mohan

Why Sales enablement is key to SFDC led sales transformation

It was interest meeting sales leader of a two decade old furniture manufacturing company that serves primarily office and industrial segment. In the course of the discussion what he mentioned brought old demons back and it seemed world has not moved. The company has rolled in SFDC with all earnest but was finding poor adoption by front line staff, data management was a challenge and resistance to change at mid-senior levels. Reports usage was far and few and sales operations patchy. What transcribed was they had seen SFDC as IT tool and not used this to recast their sales operations. Even after roll out of SFDC, company management had not aligned their marketing and sales. From our experience this is not a one off case. Many CRM roll outs do not seem to have met the expected outcomes.

In our experience CRM tools like SFDC yield significant impact when companies create the right environment, define expectations and encourage ownership to adhere and improve outcomes. People involvement is the key to outcome. Training, incentivizing adoption by gamification and other principles is important to drive adoption. Resistance to change can be addressed only through education and enablement of sales teams. Sale roles whether acquisition or account mining have their own nuances and challenges. Sales review templates is a major bone of contention. Address their fears and apprehensions, educate them how transparency is critical for sales and their organization. Direct, partner or inside sales team require customized sales training for functional improvement, but also broad based training to appreciate cross-functional integration. Invest in training to lock out legacy issues including why move beyond call list and Excel sheets.  Let the sales resources realize SFDC will help not micromanage them. Let them discover the value of managing out-of-date sales funnel data.

Ensuring sales leaders at all levels demand compliance with set standard is important to drive adoption and breadth of use of SFDC. Consistency and rigour in SFDC can be brought in by bringing on board a sales administration during SFDC roll out. Creating a dedicated sale operations centre is must. SOC will ensure all forms of waste is eliminated; all states and faults are visible and equip the company to correct quickly. Adopting suitable process whether SPIN, or SPENCO others that suit the organization brings standardization benefits.  A salesforce administrator ensures sales processes are not disjointed and workflows are all over the organization. Salesforce administrator also plays a key role in expansion and scaling up of SFDC roll out.

Sales teams must also be trained to use different marketing assets at each stage of sales process so that right assets are deployed at right stage. This is important for many solution based organization as the predominant approach is to use demos even when qualification is not done. Sales teams must use assets including blogs, SEO, Media placement to create brand awareness at qualification stage. Need analysis stage may need case studies, white papers and explainer videos to convey experience and expertise. Negotiations stage may need ROI or TCO templates, presales led demonstrations and product walkthroughs, product testimonials to address credibility, references and case scenarios. Thought leadership, product manuals, user tools may be required at closure stage. Marketing must work hand in hand with sales to create content that can create opportunities for sales team and help them closure better. Marketing team must consistently use feedback from sales team to create content that they actually use and create content around sales pipelines. While papers, frameworks, blogs, Infographics, videos all have their own value, cost and time to create. Sometimes, a goliath of an asset is what is required and hence marketing TAT’s become crucial. Similarly, sales resources must give inputs on user behaviour, competitive programs and what is working and what is not from door opening to closure.

 ROI of the SFDC increases if it is kept simple.  Take care of people (including organization parameters like structure, who owns what), technology, processes and add a dose of common sense, that all is what you need to ensure your SFDC roll out rocks.

Dr TR Madan Mohan and Bhavana S Kashyap

Teen turfs: Effective marketing for a successful Innerwear Brand

Why should brans like Nova, Bodycare, Softy, Red Rose, Shalini, Sonari, Ragini and others care about teens, young customers in the age group of 12-17. There is a lot at stake in selling and branding for teens. According to recent census 2011, Teens form about 9.2% of the youth population. Teens form about 12% of ₹9,100 Crore women inner wear segment in FY2016.  Teen brands are the most underpenetrated with highest growth rate amongst all segments of the women innerwear market. Teen innerwear is about 21% of the unorganized women innerwear market.   Surprisingly, the price differences between unorganized and branded innerwear varied just about 15-25%.  With value engineering and smart distribution, an organized brand could easily gain market share from unorganized segment. What is more alluring is that an average teen today spends 7% of ₹1000 on innerwear, on average buys 6 pairs in each year and expected to experience 3 sizes in 4 years.  Rural teens in average brought 3.2 pairs per year. Young girls develop at different ages and everybody’s experience is unique. Teens also lead and live a busy life. Teens juggle between studies, sports, Dandiya and Dance floor with aplomb. They participate in NCC training and retreats, volunteer as traffic wardens and lead their houses in major events.  They hop and jump out of buses or ride bicycles or two wheelers with gaiety.  This means a ton of possible fashion and usage environment to take into consideration.

Teens are important to brands because they tend to be early adopters and often their brand preferences are yet to be formed. However, unlike the teens of yesteryears, teens of today are most active user group on online. Teens today are scanning trends and deciding for themselves. The first thing they are likely to ask the host is whether the Wifi in their house is on.   On an average a teen spends 3.5 hours a day and an average, teens send 1480 messages and receive 2170 messages per month. Studies have shown with an underdeveloped prefrontal cortex, teens seek immediate gratification and thrill. They are expected to exhibit more impulsive behaviors.  Well, it seems like it should be pretty easy to market to teens. So one would think it is easy to create and slip into a niche teens innerwear brand. Not so. Marketing to a teenager is a labor of love.

Studies have shown that peer pressure is big for teens.  Acceptance and belonging to a group is paramount for their psychological wellbeing. That is why branding, especially of community branding works best for teens.  In fact for most teens, social media is just that a platform to express traits and seek out others with similar leanings.  So what must be the marketing strategies one must adopt for a teen innerwear brand.

First, choose your online platforms to engage them actively and direct your time and efforts towards the most relevant platforms.  Popular opinion is that Instagram, Snapchat and What’s App appear on the top with Facebook and Pinterest up the rear. If you are pursuing a low cost viral strategy, creating tiered gaming campaigns using Snapchat or Instagram may work well.  If you are just looking to widen your reach to teens targeted Facebook campaigns may work better.

Social media campaigns targeting teens is also about brevity and personalization. With shorter attention spans, teens are likely to respond more positively to short text posts and links. Bite-sized post with Big feet You approach works best.

Teen’s major sources of information about innerwear are opinion of friend (22%), store display (18%), social media (17%) and celebrity endorsement (15%).  Where most brands fail is the poor execution of store display. Standees and banner ads are passé and so are the garish looking mannequins.  Teens seek out more touch and feel experience and likely to lean more towards technology led experiences including AR.  A less tech savvy salon experience also satiates exclusivity positioning and works well for exploratory or label lioness.  Teens are less influenced by Bollywood stars, but certainly a swash bucking Cricketer or a badminton champ certainly gets more eye lashes.

From a marketing perspective teens not only consume information, but are also effective co-creators and distributors.  Teens tend to use online media to share, create their own by-lines and funny one liners about the brand. For an innerwear brand it is best to emulate social engagement models that are espoused by companies like HP, Microsoft or Oracle in Open source arena. Involve teens to voluntarily create content, create a consumption community and turn ambassadors.  Gamification tools involving rewards and recognition including Badges, Angelhood, High Princess work best for an innerwear brand. A low cost rural consumption focused innerwear brand can adopt gamification principles with multi-level marketing to reduce distribution costs and gain viral visibility.  Volunteering is another platform that works best for teen innerwear marketing.  Companies can create smart campaigns that can bundle social messaging on CSR programs and reach target populations. Incentivize them to comment, retweet, mention or getting involved in creating awareness about your innerwear brand.

A key point to remember is teens abhor preaching and explicit advertising. They may skip an advertisement if seen as an interruption or pushy. Communicate to establish relationships and association.  Authenticity is what they seek and story selling works best.  Humor and human-centered stories work best to build relationships with your brand. Communicate they are special and your brand blends with who they want to be and what they wish to be leads to better marketing outcomes.

For an innerwear brand it is imperative to remember teens are not completely independent consumers. Their parents open the purse and indulge in their purchases. Cultural sensitivity in campaigns and functional design over intimate one are keys to teen innerwear sales. You can’t afford to ignore them in your innerwear campaign and design. Finally, keep your marketing as fluid as possible. When tide turns, you must have the flexibility to turn quickly.

Rebooting Skilling Program

Government has realized its flagship skilling program- the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) despite having trained 18 lakh people failed on job creation and entrepreneurship. The reasons could be many. Firstly, it tried to create new intermediaries that would train, place and create entrepreneurs rather than building the skilling program around incumbents. The new training & placement intermediaries were expected to equip themselves with industry and trade skills, train their trainers, get certified by the Sector councils and impart skills to prospective candidates. Their remuneration was tied to three revenue streams viz., training, placement and entrepreneurship. In the current scenario, NSDC and SSC are expected to identify skilling programs which more often than not end up as 100-300 short term courses.  Unlike German and other national systems that have been tried to emulate, India’s skilling programs have been seen as system for lower achievers and less academically successful candidates. Indian labour market does not value workers trained for specific occupations. Most positions, from electricians to a carpenter or even for that matter a Bedside Assistant learns on the job. Hence, the students who get trained from skilling centres only qualify for “prevocational” training, a fall back that still leaves industry players to invest in unskilled, and unstable resources.

Our analysis of Skilling centres for Tier 2 districts like Bellary in Karnataka and Anatapuramu in Andhra Pradesh revealed financial viability was a concern. Facility size and associated investments mandated by NSDC, a minimum of 8000 Sq. Ft for an A type city (with more than 4 lakh population) and minimum of 5000 Sq. Ft for a B type city (1-4 lakh population) raised the investment barriers. Different trades require different training approaches. Some trades may need more classroom training while others need more on the field or on shop floor training. Moreover, with contributions per students of many courses was small and required large student populations to make a skilling centres financially viable. Contribution margin per student for Concrete pump operator was just about ₹5280, wheel loader ₹2000, and transit mix operator ₹5210. For breakeven, each centre requires to train at least 95,000 to 120,000 students in ten years, while competing with informal markets, on the job training model of incumbents and formal educational institutes including ITI’s, Polytechnics and other vocational courses. For infrastructure and capital equipment light courses contributions margins were low or far away from real wages. For example, contribution margins for CRM voice was ₹ 1740 and CRM non-voice was ₹ 1700.  Also, contribution margins some courses were much higher than prevailing wages.

Contribution margins for Bedside Assistant ₹ 8900, Pharmacy assistant was ₹23000 and Diabetes educator ₹9068, was much higher than on the job prevailing market wages. Skilling Centre revenue increased whenever they would earn support fee from participating in Mudra and other government supported entrepreneurship schemes. However, majority of the courses could yield at best only skilling revenues as entrepreneurship opportunities are limited or required additional resources to embark on entrepreneurship. Also, financial viability of the training institute required scaling to multiple centres, thus placing additional burden on employment and entrepreneurship. However, by engaging directly in entrepreneurship activities and reducing transaction costs on placement front improved financial viability of skilling partner. On a standalone basis, placement revenues become non-linear whenever the training centre acted as an aggregating agency for an incumbent industry’s training institution. For Bellary and Anatapuramu Centres imparting basic training at a low fee and placing students at Industry training centres of say Bosch or L&T Construction Institute and others made more economic sense. Importantly, scale constraints hindered the emergence of sector and region specific centres focusing on creating relevant skills sets.

Sharad Prasad committee has critiqued the efficacy focusing on supply side skilling and the role of NSDC and SSC. Moving away from supply side to demand side focus and involving incumbents in right sizing and right skilling of resources can be a first step. By adopting this approach it is possible to use skilling programs to drive employment growth also. For many company owners, the biggest challenge in not investment and market, but attracting and retaining talent. For companies running their operations in Tier 2 and 3 Industrial hubs the challenge is more severe.  Industry players know what talent is required and nurture it. Employers want more than short-term training and surely away from anarchic apprenticeship models, but flexible programs that can create problem solvers and not someone with just skills. Guilds form the basis of successful skilling programs. Policy changes are required to support long term internship or fellowship programs so that employers directly hire interested students and train them on the job. Skilling programs in most countries is about enhancing the training and investments by the industry players by active support and nudging by the governments towards automation and newer skills. Consider for example, Enhanced Training Support (ETS) program of Singapore, yet another small country most Indian policy makers are enamoured with. ETS program envisages employers to provide staff with required new training and 95% of the fee is a subsidy by the government. Even Canada’s famous dual-training program has adopted the same model.

Involving incumbents has certainly many advantages. When a company is involved in the design and execution of program, the content is highly relevant, customized to industrial requirement and not generic short term program that adds no value. Moreover, bounded rationality problems and problems of commons is eliminated as the company knows what skills and capabilities are required and goes after investing in them.  Unlike the one size fits all strategy that is currently pursued this approach certainly creates sector specific or even scale specific skill sets.  Management of scheme can be effective by ensuring the cost of monitoring and control is minimized. SSC which are currently burdened with many activities can focus on standard setting and best-practice identification while government can directly fund the programs based on the resources employed and trained by companies. Such an approach has dual benefits, right skill development, but also competitive factors of production for Indian companies. This is unlike the free-reward based supply driven skilling program that India is currently pursuing.

Unlike the apprenticeship program under Ministry of Labour that many companies in industries like IT and others skirt away and even those in manufacturing exploit fully, there is a need to create a less burdensome program for both employers and employees. Two of our clients have attempted 2 years fellowship program where graduates join the company as fresher, they go through an immersion training program for six months and work on shop floor for next 1.5 years. Students get paid to learn and gain skills. They not only work on production problems, but are also involved in R&D projects. These fellowships are long term and the company completely owns the design and delivery of the content. The fellowship provides students an opportunity to hone their skills and emerge as valuable resources.  These fellowships meet both skilling and employment objectives, especially at undergraduate and entry levels where the bulk of prospective employees will be.

Second, designing appropriate PPP models to enable existing infrastructure including ITI and Polytechnics can unfreeze lots of capacity, especially in Tier 2 and 3 cities for trade specific skills. In recent years, thanks to Indian Government’s QIP program and others like Canada India Institutional Cooperation Project (CIIP) infrastructure facilities of these institutions has significantly improved. However, there is sufficient headroom to increase the utilization of the facilities by allowing novel PPP models such as GOCO to emerge.  ITI’s & Polytechnic can treat it similar to long term executive education programs and the private partner can market courses across districts to interested candidates and also close the gaps on industry-academic interactions. Institutes can enter into a revenue sharing formula to earn additional revenue for themselves and their faculty. With this their ability to attract quality faculty resources may be addressed and existing infrastructure can be better utilized. Vocational and engineering colleges can also be targeted for advancing skill development across states. Government may take leaf out of its investment models promulgated for affordable housing. Many of the PPP models proposed for Housing and Urban affairs can be modified to involve private sector in skill development.

Monitoring and control of such demand based schemes needs involvement of local industry associations and industry bodies along with Commerce and Industry departments of state governments. Using right IT tools to reach and authentication and associated framework can enable more decentralized management and targeted skilling and employment. Tirupur Industrial Association (TIA) or Rajkot Management Association (RMA) would certainly have more visibility of the programs being run and community pressures could act as deterrent and reduce the risk of misuse. National Industry bodies such as NASSCOM or can also use gamification principle such as Badges and Leader boards to motivate employees adopt and execute these programs in earnest.  Badges and awards can also be for employer hiring the most women trainees, employee with highest hiring rate, etc. DIC and other infrastructure of the state governments such as IADB, and SSIDC could also be used to independently collect and report the efficacy of skilling program.  SSC play a significant role in standard setting thus reducing areas of conflict of interest. Government can use DBT mechanisms supported by Aadhaar and other mechanisms to control leakages.  The said scheme can be extended to various startups recognized by various state government schemes and other bodies supporting innovation and employability. By shifting the focus of the skilling program from supply side to demand side increases economic additionality and sustainability of the scheme. With exposure to demand driven skilling and learning while earning economic spill overs that accrue at firm, industry and employment level increase because of improved allocation, access and availability of capital. The reform push of the government must build mechanisms for non-state stakeholders to drive skill upgradation and employment for people who do not have them today. That is the way forward to reach skill development and employment generation goals.

Dr TR Madan Mohan, Aishwarya Nair and Sai Vinoth

Getting the Juice out of gamification on SFDC

Sales is a competitive function and management realizes they need tools and methods to keep their sales flock motivated to go after opportunities. Many companies use BLAP (badges, leader boards, achievements, points) gamification methods hoping they would excite their sales force to change their behaviour or move in a certain direction. SFDC has many plugins including Hoopla, Ring my bell, Level Eleven, Spinify, Nitro and others that allow companies to use BLAP to roll out gamification to direct and manage their sales teams effectively. When designed properly, BLAP on SFDC can drive organizational and sales performance. They can be used to shape people’s behaviour by highlighting what are required and creating positive reinforcement actions for those adhering or meeting the desired behaviour or actions. Sales gamification works best when it is used to spur a sales team to sustain a boring and repetitive task while enabling user control in tracking progress with some fun. Sales gamification works when it improves engagement around tasks and workflows not just as a part of the job, but adoption of non-job related activities. If the objective is to increase the volume of sale pitches or log more appointments, push more calls to high-potential leads in SFDC gamification works best. All these are best examples of extrinsic motivation led tasks.

When designed poorly, SFDC BLAPs can bring unintended effects including de-motivation, attrition and possibly driving people to game the system by adopting wrong behaviour. From a gamification design perspective, one must use gamification for tasks that are primarily uninteresting for most but have information and decision making value to the company. It is also important to ensure gamification does not undermine intrinsic motivation of the employee to perform or what is known as over justification effect.

Expected leverage for sales gamification could be outcome or behaviour changes. However, how SFDC BLAP shared either in public or within a selective group has an impact on the gamification results. When BLAP are awarded in public, they confer recognition and status, but can also make inequality more apparent and could be de-motivating. Assessing sales team working in different regions with unique regional challenges; measuring them on sales outcome when the experience of the resources is varied, creates a feeling of inequality and unfair. Also, if your leadership scorecard has the same names coming up each month, it may not serve as motivational hook for underperforming sales resources. In fact this may lead to settling at “contentment zone” fallacy. If a company uses sales gamification around attendance and punctuality, the program can be de-motivational. Sales resources who are mostly on the field may perceive this as lack of trust and curtailing of their freedom. Such acts impinge on autonomy, trust and sense of ownership which all affect intrinsic motivation.

Leader board serves two primary purposes – to assess the performance of all people across the organization and making it visible to the all users. While designing a leader board, one not only need to understand what is its purpose, but also how results would be communicated. Signalling effect of communicating outcomes is an under focussed area when companies roll out gamification. Companies must realize not all sales outcomes be publicly visible scorecards. There is an element of appropriateness, probity and hierarchy that needs to be preserved to ensure reinforcement of positive behaviour. Hence some scorecards must be visible to only specific levels or teams. Carefully designing metrics and appropriate communication method can be an important route to enhancing gamification effectiveness and reduce its adverse effects.  If the gamification is used to measure the rate of adoption of SFDC amongst different teams, then publicly displaying under-utilisation of CRM may de-motivate and discourage a team that is leading in funnel growth. Communicating this result privately may help bring about the desired behaviour correction without any adverse effects.

Reality of human behaviour is more complex than the simple vision built into most gamification apps.  SFDC gamification loses appeal once position are fixed or taken. Even SFDC leader boards can exhaust themselves quickly as few performers at top and laggards in the later part. Key to effectiveness of SFDC gamification is to use it for short-term or as a one-off activity. One way to keep the friendly completion and fun element is by bringing in fair play to avoid “self-selection of contentment zone”.  Use SFDC gamification considering all aspects, limit it a period till intended behavioural outcomes can emerge and quickly dismantle it when it outlives its utility.

Bhavana S Kashyap

Renaissance of ITeS Companies.

 

ITeS industry is witnessing dramatic changes. From initial years of voice based support it evolved to support non-voice requirements of many a Fortune 500’s. They brought process efficiencies and cost advantages to their client organizations.  However, in last few quarters, these companies are witnessing a double whammy on customer and technology fronts. With increasing automation, emergence of AI and ML on the corner many of these firms are worried about the likely drop in revenues. On the other hand, customers are seeking out a partner to manage and deliver business excellence, not just cost arbitrage advantages. Companies outsourcing are looking beyond cost arbitrage and buyer-vendor relationships but one that sustains long term value and flexibility. Many contracts are becoming more flexible, with more leeway to buyer changing needs. According to IAOP research 80% of customers are looking at outsourcing to improve business performance and their overall business models.  A major shift is also coming from segments that hitherto did not outsource much, mid rung players.  In coming years, about 2/3rd of requirements is expected to be driven by midsize companies. Unlike their large counterparts, midsize companies are not just seeking scale efficiencies, but instead to import functional expertise from outsourced partners to remain competitive. ITeS markets is moving away from a transactional cost focussed relationship to a multi-term outcome focussed ownership driven managed service play.

What is therefore needed is look beyond voice and non-voice support centres, but becoming functional support partners who can manage revenues and costs and offering omnichannel customer engagement. Transformation journey of ITeS companies can happen if they pursue a 8 steps journey as described below.

On the lines of Chinese proverb, all long journeys start with small step, the first step required to consider what is required to position them from a FTE based company to non-FTE based company. First step is to envision the offerings beyond FTE model and define the elements of the offerings that address the pain areas of the customers.  Automated services, augmented management routines or standardized processes that can eliminate the “friction” in the client organization, whether on the revenue side or the cost side or both are the keys to enriched offering. Realign complete service delivery, HR, training and support for transformation. This would mean identifying existing contracts where optimization of resources can happen, codification of SOP and routines can happen, and recruitment options that offer continuous stream of low cost resources with right attitude.  Define service offerings that may extend beyond the process and that can impact financial or non-financial aspects of client business.  While FTE continue to be a revenue stream, extend the offerings to cover solutions that impact revenue, cost, asset utilization or customer experience using technology.  Design services that exploit the elasticity of cloud and automation of benefits of RPA, analytics and other tools. Once relevant offerings are identified it is important to rearrange organizational units so that some can prepare the ground work in terms of definition, validation, structuring and packaging of the offering. RPA helps companies to automate repetitive manual tasks so that attrition and knowledge management challenges can also be better addressed. From a delivery side, RPA eliminate human variance, help standardize process routines, and reuse of process components. Automation helps companies move from pain vanilla services to high value “production”.  The offering becomes highly scalable, knowledge intensive and opens consulting opportunities for ITES companies.

Invest in a tightly joined at hip sales and marketing motions so that repositioning is consistently and continuously managed. Develop a smart marketing team that consistently conveys the change and reinforces new positioning. Sales organization has to be revised to ensure segments are appropriately covered by complementing inside sales and direct sales resources. High touch direct sales resources are key to drive transformation and appropriate sales enablement activities including training, marketing assets and walkthroughs is required. Finally, the key is to manage the transformation while being asset and investment light. For this, ITeS companies need to exploit the ecosystem of partners who can offer complementary advantages.

There is no silver bullet for effective transformation and positive outcomes. Along with multiple actions, mind-set changes, behavioural corrections, transformations are successful when resources and initiatives complement each other. For transformation to be successful, management must follow a comprehensive approach. Transformation requires high intensity of both intent and follow up.  Intensity can be sustained with dedicated outcome driven reviews. Finally, no transformation is possible without adequate ownership and self-management of teams and people.

Dr TR Madan Mohan