Let there be light...

I am now fairly convinced that India will have to chart its own path of innovation.  The initial few decades since Independence saw the country struggling to manufacture basic products that it needed.  Since the economic liberation, companies started getting into technology agreements to bring in International Technology into the Country.  The third wave started in the beginning of this century, with International Companies starting to see the talent pool in the country, and begin setting business in the country, to export out.

This process has established one fact: Indians have the capability.  Every part of the world one goes to today, it  is recognized that Indian techies are good.  However, what this sudden enlightenment has done is ensure that students by the droves were getting into IT.  Initially, the best of the cream were sucked in, attracted by the much higher salaries and glamor of foreign travel.  Over time, the next layer, and then the next layer, and then the next layer of qualified persons started getting in, lured by the lucre.  Suddenly, you had all kinds of Engineers, Mechanical Engineers, Civil Engineers, anyone with any Engineering degree was a software engineer.

Companies were so desperate for people that they would pick anyone and put him in front of clients, the operative word was "billability".  People who barely knew how to write code were routinely being 'billed', with technically stronger team members backing them up.  The Government saw the boom, and suddenly you had more engineering colleges blooming.

And one day, the roof fell through - America sneezed and the world caught a cold. Recession was in the air, jobs were being cut, and everyone started desperately to try and protect their jobs. Suddenly, a lot of people who could hide behind more productive colleagues started getting exposed, as companies decided to trim the fat.  Jobs were being lost, and people suddenly started seeing how bad the quality of the staff was.

In fact, the quality of the staff was always the same.  The profit objective of the companies employing them forced them to ignore this.  The blame lies with two groups: the colleges which churn out engineers and other 'qualified' students by the thousands, without adding to any knowledge pool, and the companies, which fail in their duty to ensure that their staff are continuously trained to get better at their jobs.

It is a matter of time before the next wave of opportunities will arise for companies, and the mad rush to select  students will start once again.  The investments need to be made in educating the students while they are in colleges.  These is where I expect the next round of changes to happen; and these are my predictions (I am sticking my neck out):

1. Companies will start recognizing the difference between education at one college from that of another. Colleges providing better education will be seen to be better.  I am not referring to the current practices of ranking colleges, which have long lost their meaning, what with the amount of lobbying that goes on, but a more informal and yet recognizable input-output measure of education effectiveness.
2. As a consequence, students will start demanding a better education system,where what they learn is more important than whether they get a job or not, and if so, the nature of the job that they get.  Again, if the right inputs are provided to them, the right education (and therefore benefits at job) will result.
3. Colleges which want to be better will need to invest in the right kind of teachers - those who are genuinely interested in the well-being of their students, and not those who are 'just doing their job'. This would automatically also create a system whereby better teachers start demanding and getting better pays as compared to worse teachers.  Also, the AICTE payscales become redundant.
4. And finally companies will stop the practice of paying based on fixed norms (such as years of experience, degree, marks) and look for qualitative norms which are assigned based on capability of the individual and not the qualifications alone.

More on this topic later...

Chess Games and Management

Let not the title of this post scare you! This is not about Management Games, but something more interesting.  Recently, we have decided to sponsor Chaitanya Krishna - a chess prodigy - who has shown immense promise. We hope that with able support from his mentor and guide K Narasimha Rao, he will be able to break int the ranks of national level chess players shortly.

While discussing with his mentor, I was made aware of a a few very interesting statistics, which I thought I should share in this post:

1. There are apparently a total of about 1.7 million games which have been documented over the last two decades, and these probably make up the sum total of the universe of chess games. 
2. All of these end up with only about popular 30 types of end games (a position from which a conclusion is reached - a win/loss or a draw). 
3. Of these, there are only 2 end games make a significant percent of all end games - Rook Vs. Rook (8.45%) and Rook + Minor piece  Vs. Rook + Minor piece (15.13%).

In fact there are very many invaluable lessons to be learnt from the observation of how chess players play.  Some of these, applicable to the management of business, are:

1. Do not get overwhelmed by the number of options available - if you are focused on the end result, you will realize that no matter how many options appear to be available, only a few are really worthy of pursuit.
2. In Chess, it is considered honorable to draw and not necessarily to secure a win.   So too in business - attempting to win at everything may not be feasible.  Be prepared to hold ground in some cases, be prepared to not win all the time.
3. The critical aspect of winning or drawing a game is based on how strong your position is: there are some squares that must be protected no matter what it takes, and there are others which can be compromised.   Be aware of those positions which are absolutely vital for your business, and be prepared to give away some of the ones which are not so important.
4. Sacrifices are common and strategic.  You could sometime sacrifice a bigger piece to gain a strategic advantage against an opponent, even when the opponent believes that he has gained the advantage.  Again, if the focus is correct, sacrifices will lead to achieving the correct result.
5. Finally, I understand now that ELO ratings are not a complete reflection of a players capabilities.  A player can consistently be playing at a higher level, but would get recognised at a certain ELO rating only after he has achieved some milestones, and sustains his position for a given time.  A company striving for excellence too must follow similar principles.

Chaitainya is currently ELO rated at 1631.  If you want chess tips, you could reach him at chaitanya.g@mydatawise.com.

New waves of entrepreneurship (or, why Mumbai is no longer the entrepreneurial capital of India)

Mumbai is dead...long live India!

Mumbai has long accounted for all the largest number of entrepreneurial ventures - the birthplace for all large corporates - the Tatas, the Ambanis, the Godrejs...and many more...all of them are credited with making Mumbai the commercial capital of India.

But I believe that the days of Mumbai as a entrepreneurial beehive are numbered.  And these are the reasons for my prediction:

1. Entrepreneurship requires lotus eaters.  People who are willing to set aside the daily hub-a-hub of life to dream of doing something different, even the ridiculous.
2. The single minded focus on commercial success does not drive entrepreneurs.  Entrepreneurs are more interested in the success of their dreams and not in the money that they can make, Mumbai has passed that stage.
3. The opportunity costs are too high.  In any other part of India, the opportunity costs of not working for immediate financial needs are still not high, and therefore one can afford to want to start something; not, I am afraid, in Mumbai.
4. Mumbai is overcrowded - not just literally.  Everyone is jostling to be the next millionaire.  The scope for aiming for a few hundreds (against the millions which every Mumbaikar dreams of) are very restrictive, and not attractive to the average intending entrepreneur.

So; is there hope?  Certainly, but only for the rich and the leisurely; this is the crowd to watch out for.  Until then, expect more GVKs and GMRs to capture the entrepreneurial space even in Mumbai.. And look out for the Lucknows, Hyderabads, Bhopals, Mysores, and Coimbatores to emerge.

Watch the results from the ET sponsored Power of Ideas campaign participants (you can check out www.powerofideas.co.in)  and you will know what I mean.

Lessons in Entrepreneurship

This is now the third year of running DATAWISE and tremendous learning for me.  While the first couple of years was spent on learning how to build a business, now, sustenance becomes more important.  I thought that other budding entrepreneurs, who must be going through similar travails would benefit from my own experience. This is my Saath Sutra (the seven principles)  from the last three years of running the company:

1. Building a philosophy: It is easy to build business: do prospecting, send proposals, sign contracts, and deliver.  However for sustained growth, everything must revolve around a philosophy. In my case, I took some of the elements which are closest to my heart and built these as a foundation to the company.  these have now become a part of the values of the company.  Invariably, every new staff member realizes that these are the essential qualifications required to belong.  You will be surprised as to how easily both internal and external alignment are achieved.
2. Delegation blues: While initially I would get involved in everything, slowly I started delegation to others.  While delegating, be prepared to step in anytime; in fact, breath down the necks of the persons you are delegating to (to pucca officewallahs this may sound sacrilege!) only to ensure that there is complete alignment. Nonetheless, be prepared for mishaps and changes in both execution quality and styles - condemn mistakes, but cover up for them.  
3. Overcommunication: I spend more time nowadays in informal communication than I have ever done in my entire life! I find an occasion to drive a point, either to one person, or to the entire staff.  I ask for feedback, but do not get swayed by it.  After all, it is my company and I need to drive it the way I want to.
4. Expect people to leave: This was one big learning.  I assumed that my team would remain with me forever! My investment in time in bringing all to the same level as I expected them to come to has been tremendous - and painstaking.  Yet, I suffered from instant heart-breaks the first time someone wanted to leave the company. I now realize that only a few of the staff will stay.  I now plan to have more people in the pipeline than business would normally call for.
5. Scouting for talent: The first few staff are the reluctant ones, those who do not know your reputation and are pay-day oriented.  As the company's reputation grows, I am now able to attract talent, and am in a position to pick and choose.  In the last few months, there have been more people that I have rejected than selected. However, I need to keep this as an on-going exercise. Instead of now looking for 'employees' I look for 'partners' - someone who is willing to invest time and effort to make the business grow.
6. Surprise Element: Over a period of time, my staff knows exactly how I would tend to behave or react, and this predictability makes it difficult to elicit behavior which is expected from them.  I now make it a point to do or say things which they would never expect from me. Creating moments of surprise, crisis, joy... all go towards making a livelier set up.
7. Focus on Customer: This is an old one.  However, when dealing with multiple customers, I realize that this is easier said than done.  Typically, I expect to have more than one customer calling up at the same time with an issue.  The only way I deal with it is continue to work the long hours.  

Happy Entrepreneurship!

Sixth Sense..making business work

It is with some sense of surprise that I have realized that I appear to have a quality which can help in making a business succeed. I am able to make this claim since I have seen this repeated in the case of at least three clients: in each case, the company was on the brink of collapse or in serious crisis, when they decided to engage the services of my company.  In each of these cases, the company rather miraculously started turning the bend.

And in at least two of the cases, as soon as I disengaged, the business of these companies declined as quickly.

So, do I have that Midas Touch which makes businesses succeed?  I am aware that I usually am full of positivism and that could have a possible rub off on the business success, but then so do so many others that I know! What, beyond the common and known logic of running a business does it take to make a business successful?  Is there a concept of a Sixth Sense, something which goes beyond the rule book and ensures business success?

I had never thought about looking at things in this light until someone brought this to my attention recently.  With the complete confidence that I do not possess any magical powers which are not available to anyone else, I have tried to put down some things which I keep doing quite normally in business.  I suspect that others do not necessarily do the same, or even if they do, do not do so with the same degree of diligence.  I cannot claim that the list below is a sure shot way to success, but this is what I have practiced:

1. 360 degree view: At every point in time, it is important not to lose perspective.  That means being aware of everything that goes in within the company no matter how small or inconsequential it may appear.  Also, I have tended to dig my heals into understanding aspects of business that appear obscure to me.  As a result, my ability to judge a situation and make suitable decisions is enhanced - my decisions are not necessarily colored by a one-sided view of things. 
2. Sense of timing: I typically make a list of things which need to be done in the business.  However, I do not rush all of these.  Some, I work on vigorously, with a sense of urgency.  Others, I let by, even when  urged by colleagues to change.  I think that there is something called a right time for certain decisions.  To unnecessarily hasten them is to make ones life difficult.
3. Looking beyond: I remember reading a lovely phrase which said "If you have your nose to the grindstone, it is difficult to see the skies".  Every once in a while I take a break, pull my head out of the water and look around, enjoy the sights, if possible get a different perspective. At the least, smell the fresh air before getting back to the daily grind of running the business. It will surprise you as to how many times, this gives you a new and different way at looking at business.  
4. Separating the wheat from the chaff: Every day there are so many things which happen around you that just doing the normal routine could overwhelm us.  The ability to identify the important issues and tackling them while keeping the less important ones stored for later action helps. 
5. Decisively indecisive: Sometimes, even the very fact of not acting on some issues takes care of them! It is common belief at least at the leadership level to assume that a leader must act.  Once in a while not acting itself is a positive statement of action. A number of issues which appear to be imminently causing a collapse of business sort themselves out with time.  A question that I keep asking myself before making any decision is "What if?", and I think of the worst case scenario that could happen if I do not take a decision.  Can I afford not to take a decision and still manage? More often than not, I have discovered that there are no earth shattering events which could happen were I not to decide on something!
6. People connect: The best compliment I received was when someone told me that I would make a great HR person. I do not subscribe to this view. However, I do know that in the normal course of the day I make it a point to address each person in the company by his name, take time out to enquire about his or her family, participate in their celebrations, remember to wish on their anniversaries, etc.  I have found that these seemingly small things matter a lot and make the staff bond better; very often, making them go beyond what would be their normal work boundaries. 

Can others not do some of these seemingly simple things?  I do not have an answer, but I guess it is a question of discipline.  My every evening stops with a mental review of the events of the day, and my every morning starts with a mental note of what needs to be done during the day.

Perhaps I dissipate some of this energy and that may be contagious! I would still suggest that those who are in business or attempting to get into one should try and apply the above six principles and see whether it works for them. It certainly appears to have worked with my clients!

I need business analytics…do I?

Analytics….a thrilling new domain, continuously explored by statisticians and data lovers.

But raw data is like an uncut diamond which will become more precious the more it will be burnished. Data analytics is the art of gaining an in-depth view of the company with a view to guiding it in its future course based on information stored within the organization.

A proper assimilation, dissection and analysis of data can help figure out the most obvious challenges or questions within an organization.  It can help to determine what went wrong (or right), and correct course, understand the performance of the organization better, and therefore plan better.  Data analysis is best used in making strategic decisions and business planning for future.

There are a number of research reports which are pointing towards the growing importance of business analytics – business analytics and optimization is a $105 billion market that includes hardware, software and services, featuring a growth rate of 8%

Top Business Analytics uses

 

 Business intelligence in data analysis is very important as it operates all the raw data dealing to each and every aspect of the organization, then to organize those data with the available tools. Data analysis helps to organize large chunks of data into fields and columns which can be conclusive for the need of company and the data analyst.

Data analysis can help in fighting downturn as it helps to analyze the trough well in advance. It helps in studying the market conditions supporting or not supporting the business.

A last word to all companies who are still nagging to be analytics driven:

“83% of Chief Information Officers (CIOs) of companies identified business intelligence and analytics as their top priority for enhanced competitiveness.”

Who needs Analytics?

The push for greater use of analytics is unfortunately more from the analytics and BI service and solution providers rather than from the end user.  This lop-sided advocacy results in a severe mismatch between the actual need for, and the felt or expressed desire for analytics in the day-to-day management of business.

There continue to remain  a number of skeptics within the industry who do not make use of analytics.  Some typical reasons that are quoted are:

“I believe in myself and have full confidence in my ability to view my business. I have full control over my company’s operations. I do not need anyone else to tell me what is right!”

“I have done it in the past, and it worked.  I know that if I do the same things again, it will work again.”

“Numbers are used by people who want to hide the truth. If you want to see reality, you must roll up your sleeves and be in the centre of action; not behind some computer, remote from the ground.”

“An external advisor will never know as much about my business as I do.  What new perspectives can I expect to gain from him?”

“Data is confusing. Give it to me straight – can you tell me what to do, or can’t you?”

And then there is always the lurking fear in the senior manager that he or she will appear to be less knowledgeable.  What then will be the security of his position within the company? Will others see him as being less competent?

In the context of the increasing requirement of depending on multiple intelligence sources to be able to make correct business decisions, this is a breed which is quickly moving towards fossilization

Most CXOs speaks the same language:  when the business is running well, they do not see the need to invest in analytics, and when the business does not do well, they do not have the back-up to be able to make the difference.

Now here comes the need of analytics oriented approach – although companies panic to appoint analytics teams and to bear the incremental cost incurred on their facilitation, the benefit of having it in place, especially in times of need, far exceeds these costs.  In the face of growing manpower and IT costs,  companies tend to internally analyze and identify their needs and try to solve their issues based on past experience and future anticipation. Under such circumstances, they see analytics as an unwanted load which can be dispensed by short term measures. Such stop-gap measures will often result in failure and the inability to make more out of the information at hand.

But is it possible for any company to transfer the data from the memory chip of one set of people to another? In order to accumulate the memory of all the memory chips one needs to create a system and an approach to work with information (that is analytics!).

Why do these businesses fail in the long run?

It is their overconfidence or the lack of ability to anticipate the needs in a rapidly changing world that mainly leads to failures.  Some of the reasons for not being able to manage businesses are:

ü  Loss of data in absence of appropriate data capturing method

ü  Lack of clearly identified goals

ü  Poor integration of data from multiple sources

ü  A betting decision maker (“I will wager that this is the right answer!”)

ü  Lack of in house analytical skills demands for proper analyses

ü  Lack of clear performance measures across organization

Let us face it, the world today requires many more business leaders than the rate at which they are being produced.  Naturally, the quality or the ability of leadership suffers.  But this need not result into the business suffering, so long as these leaders realize that there are tools and methods available to enable decision making.

BI use drivers

The imperatives to use data for business are many, and some of the larger companies have started to make use of them.  These companies are driven by the fact that their margins are being squeezed, their ability to generate incremental revenues is being limited, and their overall performance has reached levels where they cannot expect to continue to grow unless they improve their performance.  Some of the reasons why these companies have chosen to go for business analytics are:

For smaller companies, managing their data environment is much simpler..but if they do not start this early in the life of their companies, they are likely to hit a ceiling when they are looking to accelerate.

This blog is also posted on: http://mydatawise.com/i-need-business-analytics………………do-i

Missing Data

I have witnessed so many cases of data either being mis-utilized, under-utilized, or simply not being used at all that I thought that it is important for me to talk about it in this blog. Companies fail at making the best out of information which they already have. Sometimes this could be simply because during their day-to-day activities they just do not get the time to be able to review data, or perhaps they do not realize the importance of doing some basic data analysis. Where companies do tend to use data, I see broadly four types of problems associated with the use of data:

1. Data analysts are so overwhelmed with the data available to them from various sources that they spend an eternity trying to unravel the data and make some sense out of it. Data, if not analyzed timely, loses all its meaning. Agreed, it is not always easy to analyze data or to make meaning out of it. But then, to someone who understands the data, attempting to make sense out of it is fairly simple. Some of the easy methods of being able to make sense out of data without wasting too much time on its accuracy are:

• Using approximations for data which could simplify the analysis

• Using surrogates against data which is not easily available or retractable

• Simplify the data analysis problem itself.

2. Managers are not clear about what they want. Problem definition is sometimes so weak that it is impossible to conduct an intelligent data analysis around the problem. For data analysts, there is no clear answer to a question such as, say, “ What do I do if…?”. Rather, data analysts are at best able to suggest what could happen if…. The what-do-I-do question can best be answered by decision makers. It requires both an understanding of the direction of the data, and the applicability of the date to the given solution.

3. Data analysts are prone to derive conclusions which are spurious. A good example is the one that is most often quoted with regard to the correlation between ladies hemlines and the stock market index. Again, data analysts who do not have a complete business understanding of the situation are likely to arrive at incorrect conclusions. They could possibly derive a meaning out of two sets of data where possibly none exist, leading to fallacious conclusions, leading to loss of confidence of managers in the analysis, or a lack of a well directed analysis.

4. And that brings us to the last of the concerns with data usage. Managers typically manipulate data to suit their conclusions. The entire purpose of data analysis is then lost since the end result is already known to the manager, and all conclusions are necessarily biased towards establishing his or her own point of view.

So, what should data be typically used for? There are a few simple, and not-so-earth-shattering things which should be done:

1. Look to data to seek a confirmation of what you as a decision maker have in mind.

2. Be as precise as possible in setting the question that you would like the answer for. The more precise the question, the greater the likelihood that you will be able to get a meaningful answer to your question from the data.

3. Do not expect data analysis to tell you what to do. As a manager, you must make the decision yourself. You can, at best, rely on data analysis to give you directions as to what to do.

4. Finally, double check the analysis from at least 2 or 3 different viewpoints to confirm that the answer you have is a meaningful one, and that you are not being misled by incorrect data analysis.

To assume that data analysis is the cure for all ills is a fallacy. At the same time, to decide not to rely on the wealth of information already available with you is a crime.

This blog is also posted on: http://mydatawise.com/missing-data