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


Attracting and retaining talent in manufacturing SME’s: challenges and how to overcome them…

I was speaking to a CEO of a family owned manufacturing business. Her biggest bottleneck for growth was not investment, but the resources. Their plants they are located in non-metro, their products are well received by both domestic and international markets. However the most exacerbating challenge has been finding and retaining the right talent. Even if they have been successful in hiring a good candidate, spousal considerations would see the resource walking away to denser pastures. For those running their businesses in metros the challenges remain same.  A defence technology company with their plants in Electronics city Bangalore finds attracting shop floor and dirty your hand innovation oriented engineers come hard by when deluged with offers from software counterparts. If they have been successful in hiring, guiding and training them, just when they are turning to be valuable they find the resources moving onto higher pay pockets and join larger brands including MNC’s.  In short, many of the manufacturing SME end up being the training shops for larger companies to poach industry prepared resources. Major challenge is not just to attract junior resources, but also middle and senior management. Unlike IT and other industries, crossover to manufacturing is limited because of perception and other issues.

Manufacturing SME face several challenges in hiring entry level resources. Biggest hurdle is expectation mismatch.  For the theoretical knowledge most possess and limited practical experience, meeting their expectations on pay front is a challenge. Second is locational flexibility. Many of them would love to work in Metros and better equipped areas.  Third is the employee growth prospect, especially exposure to foreign markets, an incentive their counterparts in IT and other services industries have an access to.

On the middle and senior management front, paucity of next line of leadership is a major issue. While many companies have various types of employee development programs, very few of them help in creating a pool of leaders. A challenge grapple is how to turn career “managers” from short-haul oriented, self-centred individuals to leaders.

Entry level hiring and retention is best addressed by adopting one of the following. Create a 2 or 3 year fellowship to attract students from challenged backgrounds and less endowed college campuses.  Design fellowship program to include induction, in class training, cross function training and on the job training. Incentivize junior resources with adequate compensation during the fellowship period. Move the resources after one quarter of fellowship training to design and shop floor and place them under the guidance of a committed senior professional. This is a proven strategy to attract and reduce attrition at lower levels. The complete program has to be conceptualized and positioned above the Apprenticeship Program, Ministry of Labour to reduce management cost of administering the program, gain flexibility and attract right resources. In parallel, offer short-term projects to graduate and undergraduate from nearby institutes as a part of their regular curriculum and for their long-term projects.  Ideally choose a less endowed institution that is yet to make a mark and is finding placements records difficult to achieve.   Success of these programs depends on planning ahead what courses to engage with and what specific projects would have higher ROI. This is not just an effective strategy to engage junior resources, but would prove quite useful in exploiting open innovation. Identify key areas of technology challenge and offer them as a contest where faculty and the students from various institutions can participate. Smarter manufacturing SME can align their requirements within the ambit of several government programs on innovation and industry-institute interactions. Such an approach can also yield higher branding opportunities for the company at no cost and succeed in attracting the right talent.

Middle and senior management capabilities can be best served by growing leaders internally or using other platforms such as “Faculty immersion”, or “interim Manager” programs. Attitude to learn and own are the key elements when selecting internal resources for leadership development. Growing internal resources requires thorough planning, and high intensity of follow through. Identify and develop potential leaders, look for obvious signs of quality of work, sense of ownership of team, quality of feedbacks to colleagues, penchant to DIM (do it myself), initiative for breaks with team, etc.   Assess their skills and capabilities, and identify right intervention strategies. Support them with mentors (either internal or external). Alternately, move them to different functions and expose them to other markets or Executive programs.

Many institutes and colleges goad their faculty to gain valuable practical experience and enliven their class room with rich industry knowledge. Faculty immersion programs works best in quality, scheduling, materials, and supply chain and marketing areas. Offer willing faculty appropriate fee to incentivize them to learn and transfer the skill internally.  Explore opportunities to get federal and state funds for plant and quality improvement programs such as ISO certifications and others so that cost for the company can minimized and faculty involved is better incentivized. Externally funded programs also offer the additional advantage of no cost marketing.

Many qualified and able professionals may have retired from active duty, but can be extremely valuable sources of leadership and capability development for SME. Devise programs to on board willing and able experienced professionals as “interim general managers” or “Interim leaders”.  Define explicitly the hand holding they would do for your internal resources, prioritize maximum 2-3 areas where they would be involved and outcomes that may be achieved. Celebrate the milestones achieved, involve them in capability development and expansion. In the end, attracting and retaining resources in manufacturing SME requires the company to be creative in its recruitment methods and flexible in the immersion and exploitation of the skills.  Rejig your HR from a passive support organization to proactive outcome driven function. Enable mechanisms to engage and exploit open innovation.

Dr T R Madan Mohan

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How to improve your execution excellence

Strategy making is a grandiose and heady affair, but by itself does not guarantee successful outcomes. While many attribute successful outcome to grand strategy, seasoned professionals realize execution excellence is what determines the quality of outcome. Execution excellence is a result of loads of commonsense and stick to basics program. In all its simplicity, a solid execution excellence is all about plan-do-act-review and revisit of efforts required to meet the outcomes. Reams have been written about planning, review and control acts of effective execution. I would rather share insights gained by working with some of our client organizations. From a business program perspective, always choose just 3 or 4 objectives that matter to your company. Chasing too many objectives would prove to be counterproductive. Define how each of these objectives would be measured both in terms of financial and non-financial indicators. Also remember, some of the measures may be long term, may emerge only when certain priorities are fulfilled. Align your senior management roles and vision with their respective objectives. Do not attempt to formalize too many things. Processes and systems are fine, they should not be rigid and stifling the initiative and creative solutions that need to emerge at various levels. Communicate to all involved in the transition, the outcomes, expectations and the head rooms (remember Murphy’s law) so that there is enough flexibility to fail, learn and grow. Bean counting beyond a certain level may be an excellent academic big data project, but may not have high ROI from company’s perspective. Ensure the process and systems build allow one to manage root causes broad enough to impact revenue and customer satisfaction.  Communication is the biggest culprit that can affect execution excellence. Insufficient communications, iterative communications with changing goal posts and too implicit communication affect the outcomes. Contradicting communications from senior management and conflicting directions during the midcourse have derailed many a successful programs. Get communication strategy right from how and what to inform, how and whom to influence and finally how to gain advocacy for program must be thought through in detail. Ensure adherence and buy-in from all senior management about communication strategy. People are the key to execution excellence. Some many exit the program citing long haul of change, some may not know how to transition to new role and expectations and so on. Effective use of praise, promotion, handshakes and pat on back for failing and emerging strong must be employed at all levels. In many a program, it is certainly the wins at middle and lower ends that define the momentum of the program. Ensure small wins and headwinds are celebrated. While many companies commit the training and support required for the people, inability of the senior management in letting go of B & C responsibilities hurt the outcomes. Create inclusive mechanisms such as executive council or Program committee to broad base ownership, innovation and results management. Successful working of these mechanisms is key to execution excellence.

Dr TR Madan Mohan

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Practices that help you build unique organizational culture

In a globalized economy, amongst the key resources that differentiate a company from others and sustain its competitive advantage is actually people and its culture. A company’s culture can be a source of sustainable competitive advantage, as it is rather difficult to imitate. A company culture also has a major impact on the value generation. A superior organizational culture can help in retaining people, broader knowledge dissemination and offer cost advantage due to learning. Culture is defined as a pattern of shared basic assumptions that the group learns and has applied in internal and external situations which has worked well to be considered valid and, hence, to be taught to new members as the right way of perceiving , thinking , and feeling in certain situations. In an organizational context, it is a system of shared meanings held by the employees that lets each organization differentiates itself from others. Culture includes traditions, customs, values, rules, habits and practices that company knowingly and unknowingly creates and sustains.

Practices are codified artifacts that anchor values and customs, standardize and institutionalize beliefs and rules across the organization. Practices involve both explicit and implicit communication artifacts. Practice may include usage of standard operating procedures (SOP), manuals, rule books, cultural events, functions, etc. Practices like a rigorous process of hiring– seeing to it that the employees are good cultural fit can help in making a small company successful. A lot can be learnt Southwest airlines where each employee however skillful and well qualified he or she is, is first tested for being the right cultural fit. Southwest believes in filling its company with A players. It believes that it would rather wait to hire an A player or a B player (who has the potential to be an A player) than just be in a rush and hire a C player. Hire slow and fire quickly seem to be the mantra around which best-recruitment practices are designed.

Coaching and mentoring practices are the practices that many companies employ to transfer skill and knowledge across the system. They are an effective way of developing leaders of tomorrow. At Solstice mobile, a Chicago based IT company, employees meet with their mentors on a one to one basis to discuss personal and professional development. These sessions helps in guiding employees in discussing their careers thereby focusing on both personal and professional development. Apart from coaching sessions, emphasis can be laid on knowledge sharing sessions. A knowledge sharing session is where each employee is given the opportunity to share his or her knowledge on a specific tool, technology, process or concept which he or she has personally used at work. This not just lets the employee share what they know but also gives them the platform to share their experiences. Knowledge sharing sessions can also help employees identify their strengths and weaknesses and work on them accordingly. At SMEs each week, on a specific day, a knowledge sharing session can be allotted where employees get a platform to share their knowledge with other employees.

If there are two things most companies seem to be realizing of late, is performance evaluation and performance awards may not be effective way in building cohesive organization. Deloitte and several other organizations are ditching formal annual performance systems and awards to one that continuously tracks the progress of an employee and helps them to improve themselves. Some companies have moved away from “Employee of the year” “Contributor of the month”, “Achiever of the year” awards that while can motivate few, can unnecessarily demotivate and demoralize many others. Many companies are moving to peer recognition to recognize good work by their colleagues. An organization wide Peer recognition program can enable departments who have worked with each other, contributing to each other’s progress an opportunity to recognize efforts. It gives employees a chance to express what their co- workers mean to them. For instance, Square Root, an IT company based out of Texas, gives their employees the chance to recognize their colleagues who embody their four core values (Think big, Do bigger. Be customer inspired. Partner. Thrive.) regularly. Employees use a platform called Bonusly, where they give out points to one another, tagging one of the four core values. These points can be redeemed for everything from gift cards to their favorite restaurants to GoPro cameras. Square Root also gives weekly shout-outs to employees who receive kudos during their Friday announcements. A similar system can be introduced into small and medium companies where employees can recognize their colleagues based on their good work and can tag them on the basis of core values.

A recent survey of CEO’s revealed over 80% felt that most training programs had no clear business value. Companies are realizing staff development does not mean fancy executive development courses across well maintained institutes or immersion programs across some countries. Smarter companies are realizing lots of training can be free, internal resources driven and more valuable if outcomes are tracked continuously.

Employee engagement is another euphemism in many companies for annual day, birthday celebrations or some cultural events. Smarter companies are realizing employee engagement has to move beyond tokenism to immerse and institutionalize an organizational culture. Many self-funded small companies which do not have access to large amount of capital as their fatter cousins who have raised VC funds, implemented deeper engagement practices built on local culture. In being able to implement all these functions, it is essential for the human resources team of the organization to look at itself beyond just being able to do an administrative role. It has a considerable responsibility of coordinating with the various departments of the company and implementing and reviewing these practices.

An SME too can build a great culture through incorporating some unique practices. Only in incorporating these practices, it must follow certain steps


  • Have a thorough understanding of your company- Understand what your organization is all about. What business is it into, what industry is it into, what kind of people does it need and with what Skill sets and how is its present state of performance. It is essential to do a thorough analysis of what the company’s current situation is. Rooting out the problem area is necessary.
  • Benchmark it against some of the best in class practices- Look at some of the best places     to     work practices. What do you need and what could you possibly apply to your company? Understand how it could fit into your organization- Evaluate in terms of cost and return. Will the employees really benefit?.
  • Implement – Customize those practices as per the need of the company. Don’t blindly follow the practice of any organization. Tailor-make it to the needs of your organization.
  • Review and Feedback– Post implementing the practice, it is essential to gauge the results of the performance of the practice. Are the employees happy? Is the introduction of this practice really helping them? Do a reality check to know something needs to be modified.

Sindhu Raviraj

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Coaching employees in small and medium (SME) companies

“A good coach will make his players see what they can be rather than what they are” goes the popular adage. Every company needs good coaches. Coaches can be internal or external. Coaching and mentoring is often confused to be one and the same. A coach is usually a subject matter expert who engages with a person or group of persons for a specific task. A mentor on the other hand works with the mentee with no specific outcomes but for long term transformational change. Coaching sessions happen in a structured manner with a dedicated amount of time set aside for coaching. Mentoring on the other hand does not have fixed time or agenda. Coaching happens for a specific purpose and done in an official or formal manner as assigned to both the coach and to the people assigned to the coach. Mentoring is more informal and done at a personal level. The purpose of coaching is developing people for a specific task and the timeframe for coaching may end post successful completion of the task. Mentoring happens more from the angle of personal development. It could go on for longer than a year.

Coaching of employees in SME companies is important because of two prime reasons. Given the limited resources and remunerations, if not VC funded, most of the companies have limitations in attracting the top notch resources. Unlike their larger counterparts, SME have unique challenges of growing talent and control attrition. For many SME growing and investing in a loyal employees has more bottom line impact that hiring from market. An employee with long term associations would have imbibed the organizational culture, and hence the transaction costs of bonding, and monitoring as they move to newer roles would be insignificant. Coaching in the context of small and medium companies especially can work wonders in creating star performing leaders and employees. Coaching works in stretching the leadership base in the company and create a pool of second and third level ownership.

Like all organizational interventions, coaching must follow the process of select, sieve, invest, support and disengage stages. In the first stages, SME management select the individuals who show promise not just on technical stuff, but are prepare to the long haul the company is envisaging them in the newer roles. Selection should be based on 360 feedback and psychometric tests to arrive at a smaller set of potential candidates.  Rolling out a coaching program must be done with an aim of making it helpful for the participant employees in their practical situations at work. Since a coaching program is task specific it is important that the program tackles all the identified improvement areas is necessary. It is essential to make the coaching program activity based and include role plays, simulations, etc. A coach may come across several instances where an employee performs well during activities like simulations, real life situation cases, etc but when it comes to execution in the actual situation, they may fumble. Their ability to sense and respond may be not be at best in real life situations. This is where the coach must intervene, develop situation specific frameworks the employee can relate too, ask them to maintain a learning dairy so that they could monitor their progress to various stimuli.

Coaching is a process change. A coach has to plan for the initial engagement, winning of trust and acceptance and plan for disengagement.  Coach should move from how to stage to when and why of response and stimuli so that the transfer of skills and experience is sustainable and long term impacting. The trust, empathy and personal touch are key factors that play an important role in coaching outcomes. Lastly, both coaches and management must be prepared for less than 100% outcomes and setbacks.  Employee attrition, their inability to own and walk the long haul or organizational changes lead to less than expected outcomes. From a SME perspective, investing in a coaching program rather than splurging $$ on generic training programs help in motivating employees, and identify new layers of leadership.

Sindhu Raviraj

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