Beholder's definition matters most!

The field of business management has created an ocean of concepts , jargons and buzz words. Most often the terms such as leadership, business, product, team, group etc invoke different perceptions among different set of people. Even the educated elite bicker with their contemporaries about the preciseness of the term's meanings and definitions. Leadership is an apt example. What leadership meant in 1950s is different from that of the 2000s.

1.

1. Leadership is “ the behaviour of an individual … directing the activities of a group toward a shared goal” (Hemphill & Coons ,1957)

2. Leadership is the process of influencing others to understand and agree about what needs to be done and how it can be done effectively, and the process of facilitating individual and collective efforts to accomplish the shared objectives. (Yukl, 2002)

Which definition is best or better? We can argue for a decade and still not reach an agreement.

Concepts such as leadership, business, customer, product, value etc are 'live' and not rigid like dead wood. Such terms have the atrribute to assume contextual meaning. The experience from our workshops make us feel that, we should not waste our time being adamant on the preciseness of the definition, but to allow the beholder to hold the meaning as it is and nourish the meaning to grow as the contexts change. Only the beholder's definition matters most in the field than the academically nailed definitions. We need not force a Consultant's / Business school's definition on to the person-on-toes in the sphere of business. The experiences will enable the beholder naturally change the perspective and we need only to facilitate that transition.

Training vs Facilitation

In our workshops, we are moving from training orientation to facilitation. There is lots of arguments about the superiority of training on facilitation and vice versa. There are merits and demerits of training - facilitation processes.

The biggest difference between training and facilitating is

the difference in the ratio of learner involvement vs. trainer

involvement. A facilitator's only job is to get the

participants to explore for answers to issues that matters them through fertile dialogues. The facilitator provokes the participants and lead them to find answers to their conflicts. While leading the facilitation process the facilitator stays outside the conflict and do not make any judgements on the opinions floated. The group come to a decision and the facilitator reinforces their learnings

Organisational education

In future, the organisations must have its own academy to promote contextual education.

Education means ......

Education is to mould the behaviour. It has three functions – to promote originality (free will expression, innovation and creativity), to develop competence for occupation (knowledge, skill and attitude), passing on a time tested culture (beliefs, habits, value, assumptions etc).

Organisational Commitment

At the moment the most common disappontment expressed by senior managers and business owners is that their employees / subordinates do not take ownership of the organisational processes.

As mentioned in earlier posts there are many reasons for repulsing the organisational decisions by the employees.

The business owner / senior manger must find ways to get commitment rather than compliance from the employees, if the managers want the employees to take ownership of the organisation.

Commitment is not compliance! It is not Loyalty! It is not involvement!

Compliance is seen when a manager orders the subordinate to do something and the latter carries it out.

Loyalty is a willingness to remain with the organisation.

Involvement is participation and intrest in the job minus dedication to something higher.

What is commitment then?

In Ken Matejka's words , Commitment is the act of being physically, psychologically, and emotionally impelled. It means the worker gladly gives up other options and makes the task the top priority in his life.

To get commitment from others in the organisation, the manager / business owner must turn into a leader. Commitment is a scarry term: people will be afraid of losing something or of getting harmed. Only a leader can remove that fear and show a reason to care for the organisation. Once an employee catches the big picture, the orientation towards the task changes dramatically and the ownership of the task is claimed. A clear, exciting organisational vision inspires people to commit their talents and energy to make it happen.

The maintenace of the ownership by the employees depends on the leading posture taken by the manger and the quality of rewards to the employees. This is yet another tool in making the employee own the task. I shall blog on it another time.

contributed by Sasikanth Prabhu

What customer service means?

In most of the organisations, there is now a customer care department. It is a good news that all have begun to recognise the importance of customer service. But bad news is that many do not yet implemented the true customer care.

For many employees working in these organisation, customer care is mostly handling complaints or following a rigid set of processes. The customer care element is lost the moment a seperate department is created for caring the customer, other departments may feel that customer care is not their responsibility. Instead customer care must be a enterprise wide policy.

What I feel every organisation must simply do is.......

• ....... before beginning action always find out what the customer wants
• ...... always respond to the customer cordially irrespective of the customer issue
• ....... as quickly as possible provide answers to the querries and problems (not to complaints alone)
• ....... make it easy for the customer to do business with
• ....... give personalised service wherever possible
• ....... be honest, responsible and reliable with the customer
• ....... put an effort to deliver more than what is promised

Making a commitment to customer service is a company wide initiative. It begins with the top leadership. Top level executives must not only verbalise the customer care policies but lso must build systems and resources to carry out customer care.

In the long run the company that keeps the customer satisfied has the greatest chance of survival.

The value of business sense

Every employee of a company agrees without fail that they work to bring results. Usually the results are equated with the completion of tasks assigned by the superior. The employee tend to feel that ' complete the assigned task and see to it that the boss is happy'. Completing the assigned tasks is the primary objctive of the job holders. In many organisations this feeling runs length and breadth of the hierarchy. This organisation is in danger: not because it is a bad organisation, but because it is disconnected from the business.

The sense of business must pervade the organisation, then only the organisation can sustain longer and reap benefits. The business sense is a readiness that revolves around customer satisfaction, profit / gain maximisation and innovation for value. Without these no organisation can last longer. Every employee must develop business sense and follow it in their daily activities, else it will end up as wasted efforts. Business sense affects all the activities carried out in the organisation.

feedback to : margatreya@yahoo.com

Interest: the key to job involvement

When I make presentations about our Business strategy workshops and the Organisational renewal workshops to the business owners, we ask: what is your major challenge in your organisation? Four out of five owners say that, their people do not take ownership of what they do – they do not take the company as their own. In spite of the reward offers and exposure to opportunities, the people do not give their best. They do not have positive attitude towards the company.

Of course there are many reasons for such lack of involvement of people in business. One of them is lack of interest in the job, the function, the process etc. Usually the hiring managers in business give more importance to the knowledge, skills and abilities of a job candidate than to the interest part. There are intelligent and academically brilliant candidates who can overwhelm the hirers by their sheer scholasticism and articulation. But when it comes to completing the jobs with heart’s touch such candidates may take a back seat. It is because the job holder get things done by their smartness and not by their interest in it.

The term interest is used to indicate a mental disposition towards something real or abstract. The way of interest is the way of the heart. The people hirers must give priority to interest patterns of the candidate than to the skills, abilities and the experience. If the interest is their, the other things can be acquired than vice versa. Interest is a natural energiser and when it is connected to business, there is overall goodness - the ownership blossoms.

What is a product?

When we look around, a myriad of products are seen. For instance, sitting in your bedroom you can list dozens of products present there, such as pen, desk,book,table lamp, fan, bed, cot,mirror etc. Just think! Why we call these as products? This is an important question that demands answer from each and every business organization in the world and this question must be answered sincerely.

The term product is used by all to communicate and it connotes to all more or less the same way. Usually the term 'product' is used as a generic term to describe what is being marketed or sold - whether it is a good, service, idea, person or a place. Another definition goes thus - a product is set of tangible and intangible attributes including, packaging, color, price, quantity, brand , reputation of the company etc. But these ideas of product does not help an organization to position its business. I order to create a stable and durable position in the market, the businessperson should clearly and esoterically understand what is a product.

Let us now therefore take an example: a particular kind of shrub is growing all over road side. Now the question is , "Is this shrub a product?". Most people will say 'no' because it is freely available and no one would want it. But one day someone imagined it as a drawing room decorette. Soon the shrub is places in the corner of the room with an artistic touch. Many visitors of the house appreciated the plant and its arrangement.

Let us consider this example and ask ourselves, at what point the shrub changed its character from a useless thing to a decorative item?. It is when the idea was introduced and given a perceivable form. Thus the product is idea in a form. In this example the product is: the arrangement of shrub in a decorative manner.

But a product is not simply an idea in a form. You may have picked the shrub from the road side and arranged in a decorative manner, but nobody expressed interest / desire for it even after it is exhibited. Until somebody says they want it, the thing does not become a product. This means that there must be a demand / value for the idea in form before it can be said to be a product and this demand / value is provided by the customer. If any products are sold to the customer without any inherent demand / value, then it is no less than hoodwinking. Through demand / value, a link of interchange is established between business-as-product and its environment-as-customer.

The recognition of the product as an idea in a form with a demand/value is very valuable to a business organization. Giving form to ideas that has value in the market should be the central and dominating activity of a dynamic business organization. A business devoted to the identification of central ideas, formulation of strategies for moving swiftly from ideas to operations i.e. giving form will differ qualitatively in structure and in activity from a business primarily concerned with management of money and other resources. The former is dynamic, adapting and enduring while the latter is static, rigid and monotonous. This esoteric definition of product will have transformation effect in restructuring the business.

(This is an article by Sasikanth Prabhu in 'Passline' January 1999)

Slowdown in economic growth is only a slowdown of the psyche!

Before discussing the relation between the economic phenomenon and the Psyche, let us just brush some aspects of the economic system in our society. Every society has a system that regulates the economic activities. There are certain major entities that play key roles in the system. In modern times four major entities play a role in regulating the economic system.

 They are …

• The government : The government collect taxes and spends the resources for the welfare of the society
• The financial institutions (Banks, Capital Markets etc): The financial institutions gather the savings of the households and use it for the developmental purposes through loans etc.
• The Producing organizations (Products / services): The producing organizations produce products and services required by the household.
• The households: Households work as a unit contributing to the society and develop their own members.

Each of these components has to play their respective roles to keep the economy alive and vibrant.   If any of these members collectively change their behavior it may result in slowdown of the economy, for example if Government introduces taxes, it will affect the households decisions, If the Producing organizations change their products it will affect the system.

 All of us know that recession has hit all parts of the world.

 Recession means any one of the above mentioned entities has taken steps contrary to the developmental pattern and others are affected by it in some negative way.

Conventionally it is held that recession happens when people lose their ‘purchasing power’.  When household’s ability to buy is lost, it will lead to lack of sales for the producing organizations. The goods produced have to be sold. But how can they be sold when people have lost their purchasing power?

 If manufacturers cannot sell, they cannot generate enough revenue to repay loans and the creditors. The business eventually goes bankrupt and the banks will be full of non-performing assets. In such situations the banks will lend less. This becomes a vicious cycle. Depositors panic because some banks would have collapsed. They withdraw their money, and more banks collapse.

In order survive the recession the Companies will lay off some of its employees and the people who have lost jobs will have lesser money to spend. The people who are have not lost their job will tend to control their expenses and try to save more to survive during the uncertain times. These decisions of the people will result in slower turnover of money and the money supply will get stuck.

However the current is recession is caused by the Financial Institutions in the West, who were exposed to exorbitant risks in the derivatives market.  The banks were burst and millions of people lost their savings and large number people lost their jobs.

But one thing we must understand is that in recession times, we have lost only money (financial capital), but not the ability to make money. The ability to make money is a psychological phenomenon. With proper mindset and psychological capital the lost prosperity can be regained. 

 The people may have lost their purchasing power.  But their needs, dreams, goals are still there. For example a person may not be able to own a car but the need to travel is still there.  The economy drives on the latent desires of the households and the governments.  We become really poor only when we cannot dream, desire or do not take calculated risks.  The existence of dreams, ideas and desires ensures a good business for producing organizations. When the producing organizations are complaining about the lack of sales, it also means that they are not caring much about the customers.  The needs / wants are always present, only that we are not finding ways to satisfy them.

 Also we have to be open to the opportunities around us than to distant places / countries. The near-care focus will yield better results than far-care focus in the long run. Even though we are living in a globalised world we still need to pay attention to the nearest environment we live. 

 In this sense recession is an opportunity to accelerate our psychological slowdown. Recession is the effect of our mental retardation.

 If the organizations and the households, aim for better life standards, the economic prosperity sure to come.

 Some of the solutions to beat recession and make way for prosperity are …

 For Business organization

• Become customer oriented
• Develop innovative products / services
• Help the smaller organizations
• If the service provider / vendor cannot be paid in cash, offer shares in the company
• Do Barter

 For Individuals

Keep the dreams and goals alive | Invest in social capital | Express the needs and seek help | Help others’ profusely | Be a value creator

Economic slowdown is a temperory phenomenon

 This is the summary of the talk given by Sasikanth Prabhu (business consultant)

 At Chintavedi, Thuravoor (31.05.09)

 

 

Understanding intangible assets and building them

If you ask a common man, what is the most required capital to start, maintain and develop a business; the answer would be unsurprisingly- “money”. Money or financial capital is still considered as the fundamental ingredient to a business enterprise. According to this stand point the first step in starting a business is to bring some financial capital and then convert into assets required to conduct the business. Assets are the valuable economic resources owned by the company. Assets are of two types – tangible and intangible. Tangible assets include land, plant, machinery, building, furniture, fixtures, raw materials, finished goods and money claims such as receivables, deposits etc. There is a solid system of practice to manage the tangible assets of the company and the balance sheet indicates the information about this.

Traditionally book value (plant, machinery, land and stock) is considered as the major measure of a company’s worth. Is the information provided in the balance sheet alone a predictor of future success? How does a business organisation survive and change effectively over time? Trying to answer these questions leads us to feel that surplus money alone is not the only factor that helps a business organisation survive; there are other aspects which contribute to the survival and success. Understanding these other factors seems to be elusive and intangible. Intangible assets of the company are accepted to be having value to the company but it is arbitrarily and insignificantly put in the bracket called “goodwill”. Finally we use an equation …

Company worth = Book value + goodwill

Goodwill is an intangible asset. Intangible assets may be defined as those non-monetary assets that cannot be seen, touched or physically measured and which are created through time and/or effort. There are two primary forms of intangibles - legal intangibles (such as trade secrets, copyrights, patents, trademarks etc.) and competitive intangibles (such as knowledge activities (know-how,knowledge), collaboration activities, leverage activities, and structural activities). Legal intangibles generate legal property rights defensible in a court of law. Competitive intangibles, though legally non-ownable, directly impact effectiveness, productivity, wastage etc within an organization - and therefore costs, revenues, customer service, satisfaction, market value, and share price. Intellectual capital is those efforts and application human beings employ in creating the intangible assets.

Every business organisation that exists has intellectual capital behind it, but generally its presence is ignored. Actually the first capital that is invested in any business start up is intellectual capital. An idea, a dream or a passion is what is invested first in any enterprise. Tangible structures are the carriers of intangibles. Concreteness and abstractness are the sides of the same coin. Concrete structures imply the presence of abstract processes.

But a large part of the current management control systems focuses on managing money and its relationship with other functions. Consciously very few organisations attempt to manage intangible assets. Topical research indicates that managing intangible assets is apparently the foundation of survival and growth of the business organisation.

Look at the example of this Company A, a private limited company, agreed to acquire a leading manufacturer of commercial pressure cookers for roughly Rs 25 crore in excess of the book value. The pressure cooker company has a well-known trademark and a customer relationship with major retailers in all the major cities for over 30 years.

With a 30-year history and annual sales turn over around Rs. 150 crore, the trademark has substantial value and awareness in the marketplace. Market surveys conducted among key customer groups indicated brand attributes of quality, durability and trustworthiness, which all provide the customer with a sense of comfort when purchasing the company's products. The customer relationship is an interesting situation. For over 30 years, the customers have been recommending this brand of pressure cooker to its friends and neighbors. In conducting on-site visits at the various locations, it is discovered that over 95% were extremely happy with the quality of the product and would not consider purchasing a lower priced alternative.

Based on the above, do you consider the Rs. 25 crore purchase price in excess?

If ‘no’ is the answer that comes to your mind, then chances are that you have acumen for knowing the intangible assets. The above firm has lots of intangible assets.

Characteristics of intangible assets

Intangible assets enhance the cash flow of the firm. They do it by at least three possible ways:

1. Increasing cash flows, either through top-line sales growth or increasing margins as a result of driving out costs. For example, a collaborative relationship creates the possibility for vendor-managed inventory and an increase in operating margins. Or considerate customer base that pays for the service faster.
2. Enhancing earlier cash flows, such as the more rapid introduction of new products through collaborative relationships with suppliers.
3. Preventing volatile cash flows, such as through long-term stable relationships with suppliers or getting a blanket order from the customers for a specific period of time.

Intangible assets have a number of unique characteristics such as:

• Intangible assets are more difficult to copy and substitute and hence more likely to lead to a competitive advantage compared with tangible assets.
• Intangible assets are not tradable and cannot be disposed from the firm – to acquire them you need to buy the firm.
• Intangible assets are more likely to make other assets – tangible and intangible – more productive. In fact it could be argued that intangible assets (such as customer satisfaction capability) are required to unleash the value of tangible assets (the store).
• In fact, intangible assets such as the relationship between a buyer and a supplier are more likely to grow stronger and appreciate over time.

Suffice it to say that tangible assets account for only about 30 percent of the value of firms: the remaining 70 percent is the value placed on the intangible assets.

Relationships with customers, employees and suppliers, and the associated firm culture and capability of partnering to develop these relationships, are examples of intangible assets that enhance a firm’s competitive position. These assets need to be built day by day. Companies cannot simply purchase a trusting relationship as they do to acquire a technological product.

By developing close relationships with suppliers, employees and customers, firms have the opportunity to both reduce costs and grow the business through collaboration-based strategies. There is the potential to have your cake and eat it too. If the focus is just on financial profits and not investing in the intangible assets, then the real potential for unique business is wasted.

Each relationship, idea, dream and passion counts in the organisational success.

Contributed by : Sasikanth Prabhu

Return on Capital: an important business success measure

In the current scenario in the stock markets 'return of capital' itself is a great thing than the return on capital. For a stock investor return of capital is very important, but his is based on the return of capital by the company.

Who is a Business Person?

The question looks very simple but I felt the answers available in the environment does not satisfy the thought factory.

I checked the web for the meaning of business person. The results I got were the following.....

1. A businessperson (also businessman or businesswoman) is someone who is employed at usually a profit-oriented enterprise, or more specifically, someone who is involved in the management (at any level) of a company. The term businessperson almost always refers to someone with a "white collar" occupation.

2. A person engaged in business

3. a person engaged in commercial or industrial business (especially an owner or executive)

When I checked the authoritative dictionaries such as Cambridge/Oxford etc the result was the same.

These three definitions look very academic and does not enthuse .

I asked this question to at least a score of common people from varied demographies. The common theme running through their musings was '.... a business person is always profit oriented.... a business person has profit making in his or her blood..... at any cost the business person ensures the profit..... ......... ' It went so on.......

A professor from a Business School gave an interesting definition.. ' a business person is one who is engaged in an economic activity for gains".

The word 'economic activity' in the definition incites and a feeling of satisfaction flashes in me. Still I feel something is missing.

The common factor in most definitions was the 'profit' and obviously the profit here is the business person's profit.

For the time being I abandoned the analysis of the term 'business person' and browsed some Business quotes...... I felt many of the quotes are not connected to business, still they are classified as business quotes. But I found some quotes very interesting and they are listed below.

business quotes

A lasting buisness is built on friendship

A lasting business is built on friendship

Alfred A. Montapert

Business, that's easily defined - it's other people's money.

Peter Drucker

Business, more than any other occupation, is a continual dealing with the future; it is a continual calculation, an instinctive exercise in foresight.

Henry R. Luce

Do not trust people. They are capable of greatness.

Stanislaw Lem

Every young man would do well to remember that all successful business stands on the foundation of morality.

Henry Ward Beecher

People will buy anything that is 'one to a customer.'

Sinclair Lewis

Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.

W. Edwards Deming

The superior man understands what is right; the inferior man understands what will sell.

Confucius

The quotes by Alfred Montapert, Henry ward, Sinclair Lewis, Edward Deming and Confucius gives me insights. But the quote from Peter Drucker seems very frivolous, may be he has quoted it in a lighter mood.

My search lead to yet another interesting article http://www.economist.com/business/displaystory.cfm?story_id=13110436

The heading of this article answers our question " who is a business person? ' the heading is "Manners maketh the businessman". This article is worth reading though it ends in a pessimistic note. After reading the article do not forget to come back to the blog ' Business & Leadership insights.... inspirations" http://margatreya.blogspot.com/

Then my search went on to another term Business Developer. There too I was presented with information explosives. Some collections I am sharing here.

**************

" Business development is among the foremost concerns of any organisation, and a a manager, much of your attentionwill be devoted to developing and exploiting the business opportunities that are presented to you and your company.

Business development and making your organisation successful is reliant on good knowledge of best practice and management theories.

Business development management involves asking yourself some searching questions. Are you prepared to change to realise the vision created by your business development strategy? What must your business excel at? How does that affect processes, people and customers? What does the planning and controls the implementationof the business development ideas, answering to which goals, actions and measures?

Perhaps most significant of all, you have to decide whether to be radical rather than incremental - are you revelutionery in your skills as a business development manager or are you more evelutionary?

***************

I felt, my search for a practicable definition of a Business Person is leading me nowhere and I felt I have to rely on my experience and hard work. I am forced to provide a definition for the term as one of the axiom that guides us is ' Every person can be a business person".

For the time being I will settle for the following definition..

A business person is one who attracts, creates, satisfies or retains a customer / customers for a mutual gain.

Every person in the organisation can be a Business Person!

This stance opens a floodgate to me and new possibilities in business world are visible for me. Hope you too get this.

Become a business person, enjoy and create wealth!

Contributed by : Sasikanth Prabhu

Uniqueness is power

Most business people complain of the existence of competition around them and engage in a boastful saga of their heroics in beating the competition. They find consolation in comparing the competitors' performance with theirs... 'ah I could do at least this in the midsts of competition' this is the favourite punch the business people make.

Subconsciously these business people wish to be the kings of monopoly. Thier wish is genuine; all are in the market to make smart money. To become smart a bit of hard work is required. To become king in the market, one has to build a unique value in the respective business.

But how can we do that?

Understand customers, find their needs and do something about it.

Customers are attracted by different attributes. Some are intrested in cost, some are intrested in quality, some are intrested in quantity, while others are intrested in the image of the business organisation.

The major dimensions that provide uniqueness to the business include the following.......

• Cost: In every market there is a set of customers who buy solely on the basis of low cost. If there is a large pool of customers who wish to buy at cheaper price then least cost product / service will win. But there can only be one low-cost producer at a time. If you can be the least cost manufacturer, 'make it cheap' shall be your mantra.
• Quality and Relaibility: A doctor once told he prefers to use a foriegn brand sthethescope even though it is costly by three times that of an Indian-made , He prefers the former becuase it is reliable and durable. Though Indian made 'steth' is low cost and functions as good as a foriengn one, it sometimes get faulty while examining a patient in critical state. Valuable time is lost in changing the 'steth'. This example very well highlights the need for quality among customers. A business can focus on the quality of the product / service and the mantra to be followed is "make it good"
• Speed of Delivery: In some markets the ability of the business to deliver more quickly matters. A courier company falls into this category of business. The mantra here is "make it fast"
• Reliable Delivery: This is another dimension of uniqueness that relates to the ability of the organisation to supply the product/service on or before promised date / time. The mantra for building this kind of uniqueness is "deliver as per the promise"
• Meet the demand: The ability to meet the demands of the market is yet another uniqueness. There may be organisations that can provide low cost or high quality products , but if it cannot provide the product / service when there is larger demand then the market may look for alternatives. The mantra for this is " prepare for different volumes" .
• Introduce new product / service: Some needs of the customer may demand something new. In such cases offer a new product / service. The ability to make new product is a uniqueness in itself. The mantra here is " Innovate the product / service".
  
• Provide allied services: There are certain dimensions for uniqueness in terms of technical information, product training, after sale care, financing the product, delivery and installation etc. Build such services around the product to make the business unique. The mantra to be followed is " support the product / service".

No one can be unique in all the dimensions : choosing the best suitable dimesion to the given situation is what is desirable. Uniqueness for the sake of uniqueness will not give power to the business, but being unique in satisfying the customer need is what gives power.

Wishing.... all the best in building business.

Contributed by : Sasikanth Prabhu

Simplicity gets results

A couple of months back I saw a small trader in the Ernakulam market place (kochi - India), who has started a new business there. He was so excited that he was able to acquire a breathing space in this part of the city to run a business. He feels elated that he has about 40 sq.ft at his disposal. A casual glance at his kiosk made me feel that his merchandise is not matching with the excitement he has. All sort of things are there. Children's toys, hangers, strings, torches, mosquito bats, battery, etc. In one glance I could view at least 20 items. The items are displayed in nauseatingly cluttered way.I just asked him how is the business? He said it is OK. On further interview it was found that he is not able to 'break even'. He was of the belief that one has to keep all the items a customer asks. It may be good to keep all the items under one roof, but the trader has only about 40 sq.ft.

When a walk-in customer come to the kiosk and asks for a particular product, often it seems that the item demanded by the customer is not available or that the available product does not suit the customer's choice. At the departure of the unsatisfied customer, the trader immediately updates his stock as per the required of the flown customer. Thus day by day the inventory increased but the sale dwindled. I felt sad at the plight of the trader and entered into a conversation with trader and suggested to specialize in one or two products / product clusters because of the paucity of space and also the confusion it creates in the minds of the customer. The trader seem to have got some flashes as result of this coversation and consoled me he will do the needful.

Last week when I saw him at his kiosk, he has somehow liquidated his earlier inventory and right now has lesser number of products. I again asked him how the business is? he said the sale is less but some customers are doing repeat buys from the kiosk. He looks very optimistic about his business. Now the kiosk looks more tidy. And intuitively one could understand that this shop sells perfumes and related products. There is a range of perfumery products available in the kiosk. It has a welcome look now.

Mark Gottfredson and Steve Schaubert in their book "The breakthrough imperative" asserts simplicity as the one of the fundamental laws of business. This is beacuse human beings can't effectively focus on more than three or four things at once. The simplicity attribute must pervade the whole business; be it product issues, organisational issues or process issues. An organisation with too many products and options drives up costs and confuses its customers. Similarly, an organization with too many layers of management will probably be unable to take quick action, even when the need for action is obvious.

Great business persons always keep it simple.

All businesses inherently are simple and straight forward. Complexities arises when we deviate from our business or when we are ignorant of it. When there is joy, ease and lightness in what we do, we are minding our business. The moment we lose any one of these, take it that we are away from our business.The prospective customer must be able to do business with your organization as simple as possible. If it is not, the chances are that even the most loyal customer might one day leave you. Hence it is important to make the business dealings as simple as possible and as cheerful as possible.
Simplicity gets better results than complexity.

Driving simplicity in the organization:

• Study the customers' needs in detail

• Find three things the customer really cares about and do something about it intensely

• Develop products and services that would solve the needs of the customer

• Set no more than three to five critical imperatives for your organization, and communicate them so that everybody in the organization can remember, recite, and buy into what the company is trying to accomplish.

• Adapt your organizational structure, decision-making responsibilities, and critical business processes to ensure clarity, speed, and efficiency in meeting customer needs better than anybody else

Here is a site that tells more about simplicity in action http://rpc.blogrolling.com/redirect.php?r=16496b548dee948366e5c33591d13962&url=http://simplicityitk.blogspot.com

contributed by : Sasikanth Prabhu