-Contributed by Sarath Srinivasan
Recently I visited the facilities of a 'service' retail outlet in a small town in Nagpur. The interesting aspect was that the owner of this enterprise had trained his employees to perform maintenance on the equipment. The innovation from his side was that he had done with by awarding maintenance contracts to individuals within his organisation. So if there were 4-5 machines to be maintained in a shop, each had a maintenance contract which was given to a person working at the shop. This person was then trained to perform the job. By providing a monetary incentive for maintenance in the form of a service contract he was able to ensure that his equipment was taken care of. This would also ensure that preventative maintenance is undertaken on a regular basis. Esepcially if the maintenance contract is on a fixed fee basis, it make so much more sense for the person to maintain the equipment and ensure no failures rather than spend inordinate amount of time trying to repair failed equipment under time pressures.
This approach stands out for two reasons. One it creates an entrepreneurial culture in the organisation - even for a task such as maintenance there is a monetary incentive that drives employees to upgrade skills and learn more about the tools they use on a day-to-day basis. Perhaps this can be backed up by reasearch but I think the productivity on his machines would have been far higher than any other shop. In fact anecdotal evidence points to the fact that the down time on his machines has been far lower since he implemented this scheme. The second reason this stands out is the reliance on performance based compensation. In most companies in India there is a much lower component of variable pay compared to fixed pay. This must change in the coming years and perhaps this small enterprise is showing the way for the future.
Compare this situation with a typical office setting - when the internet in office does not work or when a person's laptop does not work, often the immediate reaction of a number of people is to put their feet back, relax and let the IT person handle the job. This is a typical scenario played out in a number of offices around the world. Especially when it comes to work laptops etc, employees always feel that it is someone else's job to maintain the asset. I think in today's world employees must be expected to upgrade their skills to be able to perform basic trouble shooting and maintenance of their laptops. In case the internet is not working they should know how to fix it. It is not rocket science, it requires a bit of effort. Perhaps the right set of incentives or disinectives need to be provided to ensure that people maintain their own laptop/ desktop. In other words you Make the 'User' the 'Owner.'
Can this same principle be applied across industries? For every asset a single person who uses it the most also needs to know enough to be able to do its basic maintenance. My understanding is that in all such cases the productiviy of the asset in question will increase.
Wednesday, January 28, 2009
World SME Conference Event Flow
-Contributed by Veera Mavalwala
Day 1 of the World SME Conference organized by Milagrow Business & Knowledge Solutions kicked off on 12 December 2008 with a simple ceremony of Release of Milagrow Study “State of India MSMEs 2008” by Dr Jagdish Sheth, Charles H Kellstadt Professor of Marketing in the Goizueta Business School at Emory University, followed by an inaugural address by the Founder Director Mr Rajeev Karwal welcoming the august gathering of Speakers – from India and overseas - Government officials, media and a hall full of delegates from all over India. During the day other Milagrow Studies were released -“Government backed initiatives and the progress of MSMEs in India” and “Women Entrepreneurs of MSME Clusters in Hyderabad – How Women bettered Men”,
The Emcee then introduced the first Speaker of the Day, Mr Pravir Kumar, Jt Secretary, Ministry of MSME. He was bombarded with questions, which he tried to answer in a diplomatic way. He apprised the audience on the steps being taken by the Ministry to help the MSMEs in the country. The Media thronged him after his talk to get ‘bites’ for their TV and newspapers.
Mr V Vaidyanathan, Executive Director, ICICI Bank then gave a bank’s perspective of “Winning in difficult Times” – he explained how the bank functions in these difficult and “Rocking Times”. He too had to answer a lot of difficult questions which the media and audience wanted answers for.
With some humor the Emcee introduced the next Speaker of the morning, Mr Guriqbal Singh Jaiya, Director SMEs from WIPO Geneva, who gave his views on intellectual property and how this can be used as a sustainable competitive tool by the MSMEs.
This was followed by release of the Milagrow Study on “Women Entrepreneurs of MSME Clusters in Hyderabad – How Women bettered Men” by none other than Ms Sudha Pillai, Secretary, Ministry of Labour & Employment, Dr Rajnee Aggarwal, President, FIWE and Dr Liyan Zhang, Prof of Finance & Economics, Tianjin University of China. Ms Sudha Pillai then gave a very interesting talk on “Get Skilled or get Killed – Attracting, Acquiring, and Developing & Retaining Human Resource”. Her Presentation was an eye-opener and very exhilarating to see how over-whelmingly well the women in Hyderabad were faring over men.
After lunch the Emcee introduced the star Speaker of the Day – Mr Douglas Tatum, Founding Chairman of Tatum LLC of USA. His insight into “What to do when your Company is too big to be small, but too small to be big” was his own personal experience of running an organisation, taking smart decisions and financing the business, effectively. He explained how he started as a very small enterprise and has since grown into a multi-faceted company.
After this interesting Session we had the privilege of having amongst us the High Commissioners of Sri Lanka, Bangladesh, Nepal and the Trade Commissioner of the Pakistan High Commission – this Session was anchored by Mr Kamal Nath, Director & CMD of AIMA and the discussions centered around SAARC and SAFTA and the Opportunities for SMEs to collaborate and cater to the emerging domestic economies in this potential region. It was very clear that the objective of all the countries present was to promote their SMEs and all are striving very hard to develop the SME space.
This was followed by yet another interesting Panel discussion – this time we had Dr. Liyan Zhang, SME expert and Professor of Finance and Economics, Tianjin University, China, Mr. Vittorio Mecozzi, Director, Trade Commissioner, Italian Trade Commission, Kolkata, Mr. Windu Matoka, SME Director, Zambia Development Center, Mr. Phil Baldey, CEO, Baaldi & Baaldi, New Zealand and Mr.Giovanni R.van der Lugt, Counsellor, Economic & Commercial Affairs, Embassy of the Kingdom of the Netherlands discussing “Collaborate to Compete: Lessons from Developing and Developed Economies”; the Panel Moderator was Mr. Kirtan Patel, Managing Partner, Kumar Pathak, LLC from USA. Each one gave their point of view pertaining to their country and how they have gained success through learnings from developed countries and outlooks.
The last session of the day, and certainly the most thought-provoking was a discussion by two stalwarts of the Indian Industry, Mr. Ishan Raina, CEO, Out of Home Media (OOH) and Mr. Anurag Batra, CEO & Editor-in-Chief, Exchange4Media. Both with a very similar thought process (and physical build!) discussed “Frugal Marketing during Recessionary Times”. The discussions centered on the importance of marketing tools during a recession period and how the right kind of branding and marketing can keep companies from going under.
With this the Day ended with Mr Rajeev Karwal giving an overview of the day’s proceedings and gave a glimpse of what was in store for the next day.
Day 2 began with the release of the Milagrow Study on “Sickness and Rehabilitation of MSMEs in India”, followed by a very stimulating Mentoring Workshop by Dr Jagdish Sheth, Charles H. Kellstadt Professor of Marketing in the Goizueta Business School at Emory University on, where he apprised all the delegates, on how to avoid building a self destructive culture in a company and the blind spots which lead to the eventual destruction of a successful organisation. He explained the principles of keeping a company ‘alive’ and not getting complacent and avoid certain “Self Destructive Habits of Owner Driven and Small Companies” which are the downfall of most good running organisation. A very inspiring session indeed.
This was followed by another star speaker of the day - Shri Jairam Ramesh, Minister of State for Power & Industries and Commerce – the delegates and media were awe-struck with his views on “Opportunities and challenges for Indian MSMEs in today’s globalized and open market economy.” A lot of questions were raised by delegates and media and Shri Jairam Ramesh did full justice to their curious minds as to the actions being initiated by Government in the SME space.
Another Panel comprising the IT fraternity was next on the agenda. We had IT gurus like Mr. Rajeev Mittal, Group Director, Small and Medium Enterprises, Microsoft India, Mr. Bikky Khosla, CEO, Trade India (Infocom Network Ltd.), Mr. Neeraj Athalye, Director, Solutions (Sales & Operations), SAP - Asia Pacific Japan, Mr. Jyotish Kumar Ghosh, President (SME), Times Internet Limited, Mr. Anish Tripathi, Partner, Markets & Strategic Services, Grant Thornton, Mr. Abhas Abhinav, Founder, Deeproot Linux and Panel Moderator, Mr. Pradeep Gupta, Chairman of the CyberMedia Group, South Asia's first and largest specialty media. A heated discussion took place on "IT solutions for MSMEs: Lip Service or Real Solutions?” – lot of questions from the audience as a lot of SMEs seem to have IT problems and need very specific solutions.
After this yet another Panel discussion took place with Panel Chairperson, Mrs Ranjana Kumar, Vigilance Commissioner, CVC and former Chairperson NABARD, with Panelists, Mr. Sudhir Sethi, Founder & CMD, IDG Ventures, Mr. Vijay Chandok, Head, Small Enterprises Group, ICICI Bank and Mr. Jasjit Sawhney, CEO, Net4India. Mrs Ranjana Kumar made a Presentsation on "Sustaining growth in tight monetary markets" to kick off the discussion and the audience were happy with the conclusions and suggestions made.
Post lunch the group split into two – a Mentoring Session ensued on “Accelerating Growth with Acquisitions” Mr. C.N. Madhusudan, Chief Executive Officer, VectorSpan Inc. and Former President and Chief Operating Officer, NIIT (USA Operations) and another one on “Grooming India’s Readiness to Run the World”, by Dr. Rajiv Tandon, Ph.D. Founder and Chairman of Adayana, Inc, USA.
In the other group - Paper Presentations on “ Issues in SMEs” were made by Professors from Institutes; we had received 59 Papers out of which 7 were shortlisted and these were presented to be judged by Dr. BS Sahay, Director, Institute of Management Technology (Ghaziabad), Professor Liyan Zhang, Tianjin University of Finance and Economics, China, Mr. Anurag Batra, Editor-In-Chief, Exchange4Media, Mr. Vinay Hegde, Knowledge Mentor, Milagrow, and Ms Shobha Ahuja, Senior Economist, PHD Chamber of Commerce and Industry. The Winner and 2 Runner-up Awards were given during that afternoon session; all Professors were also awarded trophies.
The groups met once again to hear a very heartening talk on “Women Entrepreneurship and the support system in India” by Dr Rajnee Aggarwal, President, Federation of Indian Women Entrepreneurs. She spoke about how she was one of the first woman entrepreneur and how she had to struggle to make a place in this male dominated society.
A Panel discussion then took place on " Impact of Global Financial Crisis on Exports from MSME sector in India", the panelists being Mr. KT Chacko, Director, IIFT, Dr. K.Rangarajan, IIFT, Mr. Ajay Sahai, Director General, FIEO
Mr Rajeev Karwal, Founder Director, Milagrow, Mr. R. Seshadri, Director, Tilda Riceland Pvt. Ltd., Mr. AS Kumar, Super Steel flexible hose Ltd and Dr R.Bhola, Managing Director, Bholasons Enterprises.
The Valedictory address on “How India can become an innovation superpower and set benchmarks for the World” by Prof Anil Gupta, Hon. Value Ombudsman, Milagrow, Professor, IIM – Ahmedabad, was the breath-taker of the Conference and everyone thoroughly enjoyed this session which left a lasting impact on not only the delegates but also all the Speakers present.
The Conference ended but not before Mr Rajeev Karwal invited everyone for the next Milagrow World SME Conference 2010 – in January 2010 when the theme remains “Get Set Grow” and will also hold an Exhibition with the theme “Grass Roots to Global”. See you in January 2010!
Day 1 of the World SME Conference organized by Milagrow Business & Knowledge Solutions kicked off on 12 December 2008 with a simple ceremony of Release of Milagrow Study “State of India MSMEs 2008” by Dr Jagdish Sheth, Charles H Kellstadt Professor of Marketing in the Goizueta Business School at Emory University, followed by an inaugural address by the Founder Director Mr Rajeev Karwal welcoming the august gathering of Speakers – from India and overseas - Government officials, media and a hall full of delegates from all over India. During the day other Milagrow Studies were released -“Government backed initiatives and the progress of MSMEs in India” and “Women Entrepreneurs of MSME Clusters in Hyderabad – How Women bettered Men”,
The Emcee then introduced the first Speaker of the Day, Mr Pravir Kumar, Jt Secretary, Ministry of MSME. He was bombarded with questions, which he tried to answer in a diplomatic way. He apprised the audience on the steps being taken by the Ministry to help the MSMEs in the country. The Media thronged him after his talk to get ‘bites’ for their TV and newspapers.
Mr V Vaidyanathan, Executive Director, ICICI Bank then gave a bank’s perspective of “Winning in difficult Times” – he explained how the bank functions in these difficult and “Rocking Times”. He too had to answer a lot of difficult questions which the media and audience wanted answers for.
With some humor the Emcee introduced the next Speaker of the morning, Mr Guriqbal Singh Jaiya, Director SMEs from WIPO Geneva, who gave his views on intellectual property and how this can be used as a sustainable competitive tool by the MSMEs.
This was followed by release of the Milagrow Study on “Women Entrepreneurs of MSME Clusters in Hyderabad – How Women bettered Men” by none other than Ms Sudha Pillai, Secretary, Ministry of Labour & Employment, Dr Rajnee Aggarwal, President, FIWE and Dr Liyan Zhang, Prof of Finance & Economics, Tianjin University of China. Ms Sudha Pillai then gave a very interesting talk on “Get Skilled or get Killed – Attracting, Acquiring, and Developing & Retaining Human Resource”. Her Presentation was an eye-opener and very exhilarating to see how over-whelmingly well the women in Hyderabad were faring over men.
After lunch the Emcee introduced the star Speaker of the Day – Mr Douglas Tatum, Founding Chairman of Tatum LLC of USA. His insight into “What to do when your Company is too big to be small, but too small to be big” was his own personal experience of running an organisation, taking smart decisions and financing the business, effectively. He explained how he started as a very small enterprise and has since grown into a multi-faceted company.
After this interesting Session we had the privilege of having amongst us the High Commissioners of Sri Lanka, Bangladesh, Nepal and the Trade Commissioner of the Pakistan High Commission – this Session was anchored by Mr Kamal Nath, Director & CMD of AIMA and the discussions centered around SAARC and SAFTA and the Opportunities for SMEs to collaborate and cater to the emerging domestic economies in this potential region. It was very clear that the objective of all the countries present was to promote their SMEs and all are striving very hard to develop the SME space.
This was followed by yet another interesting Panel discussion – this time we had Dr. Liyan Zhang, SME expert and Professor of Finance and Economics, Tianjin University, China, Mr. Vittorio Mecozzi, Director, Trade Commissioner, Italian Trade Commission, Kolkata, Mr. Windu Matoka, SME Director, Zambia Development Center, Mr. Phil Baldey, CEO, Baaldi & Baaldi, New Zealand and Mr.Giovanni R.van der Lugt, Counsellor, Economic & Commercial Affairs, Embassy of the Kingdom of the Netherlands discussing “Collaborate to Compete: Lessons from Developing and Developed Economies”; the Panel Moderator was Mr. Kirtan Patel, Managing Partner, Kumar Pathak, LLC from USA. Each one gave their point of view pertaining to their country and how they have gained success through learnings from developed countries and outlooks.
The last session of the day, and certainly the most thought-provoking was a discussion by two stalwarts of the Indian Industry, Mr. Ishan Raina, CEO, Out of Home Media (OOH) and Mr. Anurag Batra, CEO & Editor-in-Chief, Exchange4Media. Both with a very similar thought process (and physical build!) discussed “Frugal Marketing during Recessionary Times”. The discussions centered on the importance of marketing tools during a recession period and how the right kind of branding and marketing can keep companies from going under.
With this the Day ended with Mr Rajeev Karwal giving an overview of the day’s proceedings and gave a glimpse of what was in store for the next day.
Day 2 began with the release of the Milagrow Study on “Sickness and Rehabilitation of MSMEs in India”, followed by a very stimulating Mentoring Workshop by Dr Jagdish Sheth, Charles H. Kellstadt Professor of Marketing in the Goizueta Business School at Emory University on, where he apprised all the delegates, on how to avoid building a self destructive culture in a company and the blind spots which lead to the eventual destruction of a successful organisation. He explained the principles of keeping a company ‘alive’ and not getting complacent and avoid certain “Self Destructive Habits of Owner Driven and Small Companies” which are the downfall of most good running organisation. A very inspiring session indeed.
This was followed by another star speaker of the day - Shri Jairam Ramesh, Minister of State for Power & Industries and Commerce – the delegates and media were awe-struck with his views on “Opportunities and challenges for Indian MSMEs in today’s globalized and open market economy.” A lot of questions were raised by delegates and media and Shri Jairam Ramesh did full justice to their curious minds as to the actions being initiated by Government in the SME space.
Another Panel comprising the IT fraternity was next on the agenda. We had IT gurus like Mr. Rajeev Mittal, Group Director, Small and Medium Enterprises, Microsoft India, Mr. Bikky Khosla, CEO, Trade India (Infocom Network Ltd.), Mr. Neeraj Athalye, Director, Solutions (Sales & Operations), SAP - Asia Pacific Japan, Mr. Jyotish Kumar Ghosh, President (SME), Times Internet Limited, Mr. Anish Tripathi, Partner, Markets & Strategic Services, Grant Thornton, Mr. Abhas Abhinav, Founder, Deeproot Linux and Panel Moderator, Mr. Pradeep Gupta, Chairman of the CyberMedia Group, South Asia's first and largest specialty media. A heated discussion took place on "IT solutions for MSMEs: Lip Service or Real Solutions?” – lot of questions from the audience as a lot of SMEs seem to have IT problems and need very specific solutions.
After this yet another Panel discussion took place with Panel Chairperson, Mrs Ranjana Kumar, Vigilance Commissioner, CVC and former Chairperson NABARD, with Panelists, Mr. Sudhir Sethi, Founder & CMD, IDG Ventures, Mr. Vijay Chandok, Head, Small Enterprises Group, ICICI Bank and Mr. Jasjit Sawhney, CEO, Net4India. Mrs Ranjana Kumar made a Presentsation on "Sustaining growth in tight monetary markets" to kick off the discussion and the audience were happy with the conclusions and suggestions made.
Post lunch the group split into two – a Mentoring Session ensued on “Accelerating Growth with Acquisitions” Mr. C.N. Madhusudan, Chief Executive Officer, VectorSpan Inc. and Former President and Chief Operating Officer, NIIT (USA Operations) and another one on “Grooming India’s Readiness to Run the World”, by Dr. Rajiv Tandon, Ph.D. Founder and Chairman of Adayana, Inc, USA.
In the other group - Paper Presentations on “ Issues in SMEs” were made by Professors from Institutes; we had received 59 Papers out of which 7 were shortlisted and these were presented to be judged by Dr. BS Sahay, Director, Institute of Management Technology (Ghaziabad), Professor Liyan Zhang, Tianjin University of Finance and Economics, China, Mr. Anurag Batra, Editor-In-Chief, Exchange4Media, Mr. Vinay Hegde, Knowledge Mentor, Milagrow, and Ms Shobha Ahuja, Senior Economist, PHD Chamber of Commerce and Industry. The Winner and 2 Runner-up Awards were given during that afternoon session; all Professors were also awarded trophies.
The groups met once again to hear a very heartening talk on “Women Entrepreneurship and the support system in India” by Dr Rajnee Aggarwal, President, Federation of Indian Women Entrepreneurs. She spoke about how she was one of the first woman entrepreneur and how she had to struggle to make a place in this male dominated society.
A Panel discussion then took place on " Impact of Global Financial Crisis on Exports from MSME sector in India", the panelists being Mr. KT Chacko, Director, IIFT, Dr. K.Rangarajan, IIFT, Mr. Ajay Sahai, Director General, FIEO
Mr Rajeev Karwal, Founder Director, Milagrow, Mr. R. Seshadri, Director, Tilda Riceland Pvt. Ltd., Mr. AS Kumar, Super Steel flexible hose Ltd and Dr R.Bhola, Managing Director, Bholasons Enterprises.
The Valedictory address on “How India can become an innovation superpower and set benchmarks for the World” by Prof Anil Gupta, Hon. Value Ombudsman, Milagrow, Professor, IIM – Ahmedabad, was the breath-taker of the Conference and everyone thoroughly enjoyed this session which left a lasting impact on not only the delegates but also all the Speakers present.
The Conference ended but not before Mr Rajeev Karwal invited everyone for the next Milagrow World SME Conference 2010 – in January 2010 when the theme remains “Get Set Grow” and will also hold an Exhibition with the theme “Grass Roots to Global”. See you in January 2010!
Wednesday, January 21, 2009
The Milagrow Values
-Contributed by Team Milagrow, Compiled by Sarath Srinivasan, Knowledge Guide
When the entire Milagrow team got together in July 08 to define the Vision of the company we also listed what we believed were the values and culture that bound us together.
Our Values
This blog is a compilation of the proverbs and quotations that we at Milagrow have shared with one another because those words reflected the values and culture that we believe in. I hope that this will be the first of many such blog posts and that this tradition continues for a long time at Milagrow.
Don't miss the beauty of the journey by focussing only on the destination
" If you are not a part of the Solution, You are part of the problem" - Peter Madden
"The place to improve the world is first in one's own heart, head and hands" - Robert M. Pirsig
"Endurance is one of the most difficult disciplines, but it is to the one who endures that the final victory comes." —The Buddha
"People may not always believe what you say, but they will believe what you do."
"Ships are safest in the harbor but they are not meant to be there. They have to sail long and hard and face stormy seas to reach the comfort of a desirable destination" - N.R Narayana Murthy
"Life is mostly froth and bubble, but two things stand like stone, kindness in another's trouble and courage in your own" -Princess Diana
"Change the changeable, accept the unchangeable, and remove yourself from the unacceptable." -Denis Waitley
"Within each of us is a hidden store of energy.Energy we can release to compete in the marathon of life.
Within each of us is a hidden store of courage.Courage to give us the strength to face any challenge.
Within each of us is a hidden store of determination.
Determination to keep us in the race when all seems lost".
-Roger Dawson
"Our thinking and our behavior are always in anticipation of a response. "— Deepak Chopra
"If someone feels that they had never made a mistake in theirlife, then it means they had never tried a new thing in their life…"- Albert Einstein
1) Life is not tough enough, that is why we complain
2) If you are responsible, you have the power
3) If someone tells you your dream follow it
4) Acceptance gives peace
5) True value of business is vision. Without that it is project management.
-Yossi Ghinsberg
When the entire Milagrow team got together in July 08 to define the Vision of the company we also listed what we believed were the values and culture that bound us together.
Our Values
- Ethics – Integrity, Honesty and Transparency in what we do
- Trust – Believe in People
- Respect – For all Stake Holders
- Commitment – Own everything we do
- Entrepreneurial thinking is a way of life
- Belief in Youth
- Equal Opportunities to all
- Thirst for Knowledge
- Respect and Recognition for Expertise
- Accessible, Straight forward,
- Collaborative approach
- Making things happen
- Passionate and Professional at the same time
This blog is a compilation of the proverbs and quotations that we at Milagrow have shared with one another because those words reflected the values and culture that we believe in. I hope that this will be the first of many such blog posts and that this tradition continues for a long time at Milagrow.
Don't miss the beauty of the journey by focussing only on the destination
" If you are not a part of the Solution, You are part of the problem" - Peter Madden
"The place to improve the world is first in one's own heart, head and hands" - Robert M. Pirsig
"Endurance is one of the most difficult disciplines, but it is to the one who endures that the final victory comes." —The Buddha
"People may not always believe what you say, but they will believe what you do."
"Ships are safest in the harbor but they are not meant to be there. They have to sail long and hard and face stormy seas to reach the comfort of a desirable destination" - N.R Narayana Murthy
"Life is mostly froth and bubble, but two things stand like stone, kindness in another's trouble and courage in your own" -Princess Diana
"Change the changeable, accept the unchangeable, and remove yourself from the unacceptable." -Denis Waitley
"Within each of us is a hidden store of energy.Energy we can release to compete in the marathon of life.
Within each of us is a hidden store of courage.Courage to give us the strength to face any challenge.
Within each of us is a hidden store of determination.
Determination to keep us in the race when all seems lost".
-Roger Dawson
"Our thinking and our behavior are always in anticipation of a response. "— Deepak Chopra
"If someone feels that they had never made a mistake in theirlife, then it means they had never tried a new thing in their life…"- Albert Einstein
1) Life is not tough enough, that is why we complain
2) If you are responsible, you have the power
3) If someone tells you your dream follow it
4) Acceptance gives peace
5) True value of business is vision. Without that it is project management.
-Yossi Ghinsberg
The Journey from a Distributor to a Brand
Lessons learned from a distributor who ventured to launch his own brand....
- Contributed by Akash Kumar, Sales Buddy
Recently I was handling one of our clients (let us call it Ram Pvt. Ltd.) from the IT hardware industry. They were into IT networking products, under which they were mainly focused on IT networking cables i.e. CAT5E, CAT6, CAT6A LAN cables and Fiber networking cables. It was interesting to work with this client due to two reasons. First, Ram Pvt. Ltd was the only Indian company that had a presence in this specific product category. They were competing against MNCs who were having a stronghold all over the world. Second, they were changing their image from Trading Company (Distributors of MNCs brand) to a branded company with their own global brand.
While handling this client, I came across a number of new challenges which I feel that one can learn only through experience. Based on my learning, I am presenting those precautionary steps which a distributor firm must take before launching their own brand.
Image transformation of Trading Company to Branded Company should be Gradual Process. Even though Trading Company would be having sales staff, reach, supply chain, efficient working capital, it should not stop their entire trading operations suddenly and start selling only their own branded products. Typically the driver for the firm to launch their own brand is a higher margin. Although the distribution business will continue to offer lower margins the trading business will be crucial for the survival of the business.
Brand: Ram is well placed but one thing which one needs to remember is that until Ram decided to launch their own brand they were selling other’s brand (say ABC).Customers (with whom Ram is having good relations) are purchasing that ABC product and not Ram’s product. Ram is only a service provider for customers. If tomorrow, Ram will stop selling ABC brand and start his own brand; his customers will stop purchasing from him and will start purchasing from those, who will be appointed as a new distributor for that particular ABC brand. The question that arises here is why are customers so loyal to particular brands in Network Cabling Industry? Because, it is being used in critical applications and thus to protect the entire data and huge investment, companies prefer to go for those brands that are well established and have market acceptance in terms of huge past orders. In order to build a known brand in market, SMEs should not think that giving print ad or TV or Radio ad is the only solution. They should think of innovative solutions such as how to leverage maximum out of web 2.0. They can create differentiation by sending out newsletter to their prospective customers, putting online queries, using website optimizing techniques etc. Such techniques can especially be effective in sectors like the networking industry where close to 100% of the buyers would be internet users.
Working Capital: When Ram was in trading business, it used to get good credit from ABC Company. Therefore, Ram used to sell in market at 30 days of credit at the same time he used to get 30-45 days of credit from Branded (ABC) companies. Thus, Ram was using ABC’s money and generating profit from it. During this whole process, he was having almost Negative working capital. But when Ram started his own brand he had to procure goods on low credit periods and was forced to give long credit periods in the market to push distributors. Thus, Ram Pvt. Ltd. had come from Negative working capital to huge Positive Working Capital. Due to this its cash flow got affected.
Therefore, to protect your cash flow you need to go for gradual parallel process of increasing the share of the own brand business and at the same time reduce the inventory of the other brand’s goods.
Sales Team Transformation: In Ram Pvt. Ltd., the management was of the opinion that the functions of sales and marketing were one and the same. Creating and establishing a brand is a difficult thing to accomplish. Creating a logo does not mean that a brand has been created. Brands require proper launch in market. The Sales team needs to understand how the company is trying to present the brand in the market. In my case, I found that Ram just had good knowledge of product and began procuring the products and attempted to build a brand by putting a new logo on the products. This did not work partly because his sales team was not familiar with the brand, presentation of technical differentiation, Knowledge Up gradation etc.
This example brings out the importance of training your sales staff, so that they can take your brand in to market without any fear of any competition from giant competitors.
Market Selection and Entry Strategy: For any brand, there should be proper target market. When Ram Pvt. Ltd. launched their brand, they had a well established network with distributors. Although initially they managed to convince them to start selling Ram’s brand by giving a longer credit period and other distributor friendly policies, after a certain duration, Ram found that due to some other problems (mentioned above) his brand was not able to command any substantial market share. Thus, distributors stopped paying back to Ram. In this way, Ram’s working capital got increased and finally cash flow was affected badly. Therefore, when a company launches their own brand in the market it must be very focused about the segment to be targeted. There should be a clear entry strategy as well as an exit plan for future.
In conclusion, my suggestion to entire community of distributors, who are also integral parts of SME eco-system, is that everything is possible. There are a number of live cases around us which always reminds us that trading firms can also become branded companies. Samsung, which at some point of time was a trading company associated with some of the World’s renowned brands, is today’s global giant in Consumer Electronics.
- Contributed by Akash Kumar, Sales Buddy
Recently I was handling one of our clients (let us call it Ram Pvt. Ltd.) from the IT hardware industry. They were into IT networking products, under which they were mainly focused on IT networking cables i.e. CAT5E, CAT6, CAT6A LAN cables and Fiber networking cables. It was interesting to work with this client due to two reasons. First, Ram Pvt. Ltd was the only Indian company that had a presence in this specific product category. They were competing against MNCs who were having a stronghold all over the world. Second, they were changing their image from Trading Company (Distributors of MNCs brand) to a branded company with their own global brand.
While handling this client, I came across a number of new challenges which I feel that one can learn only through experience. Based on my learning, I am presenting those precautionary steps which a distributor firm must take before launching their own brand.
Image transformation of Trading Company to Branded Company should be Gradual Process. Even though Trading Company would be having sales staff, reach, supply chain, efficient working capital, it should not stop their entire trading operations suddenly and start selling only their own branded products. Typically the driver for the firm to launch their own brand is a higher margin. Although the distribution business will continue to offer lower margins the trading business will be crucial for the survival of the business.
Brand: Ram is well placed but one thing which one needs to remember is that until Ram decided to launch their own brand they were selling other’s brand (say ABC).Customers (with whom Ram is having good relations) are purchasing that ABC product and not Ram’s product. Ram is only a service provider for customers. If tomorrow, Ram will stop selling ABC brand and start his own brand; his customers will stop purchasing from him and will start purchasing from those, who will be appointed as a new distributor for that particular ABC brand. The question that arises here is why are customers so loyal to particular brands in Network Cabling Industry? Because, it is being used in critical applications and thus to protect the entire data and huge investment, companies prefer to go for those brands that are well established and have market acceptance in terms of huge past orders. In order to build a known brand in market, SMEs should not think that giving print ad or TV or Radio ad is the only solution. They should think of innovative solutions such as how to leverage maximum out of web 2.0. They can create differentiation by sending out newsletter to their prospective customers, putting online queries, using website optimizing techniques etc. Such techniques can especially be effective in sectors like the networking industry where close to 100% of the buyers would be internet users.
Working Capital: When Ram was in trading business, it used to get good credit from ABC Company. Therefore, Ram used to sell in market at 30 days of credit at the same time he used to get 30-45 days of credit from Branded (ABC) companies. Thus, Ram was using ABC’s money and generating profit from it. During this whole process, he was having almost Negative working capital. But when Ram started his own brand he had to procure goods on low credit periods and was forced to give long credit periods in the market to push distributors. Thus, Ram Pvt. Ltd. had come from Negative working capital to huge Positive Working Capital. Due to this its cash flow got affected.
Therefore, to protect your cash flow you need to go for gradual parallel process of increasing the share of the own brand business and at the same time reduce the inventory of the other brand’s goods.
Sales Team Transformation: In Ram Pvt. Ltd., the management was of the opinion that the functions of sales and marketing were one and the same. Creating and establishing a brand is a difficult thing to accomplish. Creating a logo does not mean that a brand has been created. Brands require proper launch in market. The Sales team needs to understand how the company is trying to present the brand in the market. In my case, I found that Ram just had good knowledge of product and began procuring the products and attempted to build a brand by putting a new logo on the products. This did not work partly because his sales team was not familiar with the brand, presentation of technical differentiation, Knowledge Up gradation etc.
This example brings out the importance of training your sales staff, so that they can take your brand in to market without any fear of any competition from giant competitors.
Market Selection and Entry Strategy: For any brand, there should be proper target market. When Ram Pvt. Ltd. launched their brand, they had a well established network with distributors. Although initially they managed to convince them to start selling Ram’s brand by giving a longer credit period and other distributor friendly policies, after a certain duration, Ram found that due to some other problems (mentioned above) his brand was not able to command any substantial market share. Thus, distributors stopped paying back to Ram. In this way, Ram’s working capital got increased and finally cash flow was affected badly. Therefore, when a company launches their own brand in the market it must be very focused about the segment to be targeted. There should be a clear entry strategy as well as an exit plan for future.
In conclusion, my suggestion to entire community of distributors, who are also integral parts of SME eco-system, is that everything is possible. There are a number of live cases around us which always reminds us that trading firms can also become branded companies. Samsung, which at some point of time was a trading company associated with some of the World’s renowned brands, is today’s global giant in Consumer Electronics.
World SME Conference 2008, A "first" in the truest sense of the word..
-Contributed by Tapan Bhatnagar
The Milagrow World SME Conference concluded successfully on the 13th of December 2008. The conference was a tremendous success, and I'm not shooting off the cuff here. The success of the conference is measurable in terms of the number of speakers, number of delegates, Press attendance, number of Partners, profitability, number of press ads etc.
The conference to an outsider would look like Mission Impossible part I - II - III combined, but here at Milagrow, as with any other projects, we are strivers. The conference was properly conceived and though we were on a road less travelled, we were sure of the positiveness of the outcome. The idea was conceived almost a year back with basically two ideas:
I. Bring Global MSMEs on a common platform to interact with each other as well as with industry captains and govt officials to interact and understand the challenges faced by the MSME ecosystem.
II. Take a leap as an authority in the MSME space in India
Based on these ideas, the development of the conference began. This started with creation of the compilation of the ideas and output we expected to achieve from the conference and what was our plan to achieve the same. Mind you, at this point in time, Milagrow was just a young organisation - less than 1 year old! But, the difference between Milagrow and any other organization is that we dream big and then strive to achieve that dream.
Once we created the compilation of the ideas, expected output and our plan for achieving this into our event abstract, came the next step of setting up our advisory board. The advisory board plays an important role in the success of any conference. The advisory board not only plays the role of being a mentor to the entire conference but at the same time from their experience and expertise and network open doors which were previously inaccessible and unreachable.
Once the backbone of the event was in place, came the setting up of the skeleton of the conference. A painful, step-by-step time consuming process. This included developing the proposed schedule for the event based on the event abstract, getting the comments of the advisory board on the proposed schedule and their recommended speakers for the same. This was followed by the arduous task of actually inviting the speakers and the Government officials. Before proceeding further, I must point out that at the beginning of the preparation of the conference we had decided that our event would be world class or we would not do it at all. Leading from here you can well imagine the level and seniority of the speakers we were looking at. Each and every speaker was a expert in their field and was either in meetings or travelling 300 days in a year!!
At the same time that speakers were being invited we parallely started the development of Government Linkages and partnerships for the event and also scouting for sponsors and partners for the event. All this parallel work was possible only because the event was conceptualized well and the plan was made in pain staking detail. In case of sponsorships we had already planned for the kind of paid sponsorships and the proposals for the same even as we were preparing the abstracts. Similarly all possible partnerships in kind and with associations were thought out and proposal for each created. Not only that, the team had brainstormed and selected the target organizations/associations for each of the proposed partnerships. This was the reason that even though we were a lean team we were still able to achieve much more than most of the organizations.
An important cost incurred in any marketing budget is the advertising budget. And considering the fact that we had to at all points in time keep our budgets in check this was a major factor of concern. Now if we consider that we placed ad couple of advertisements in the print media our expenses would have been 10 times and if we added television advertisements then - good bye profitability! This is where our carefully laid out plans worked and we made the most effective utilization of our database of 6.6 lakh users and also effective usage of digital marketing. This not only helped us achieve many more eye balls but also allowed us to leverage the print media effectively. Our planning in advance helped us tremendously, since we had built in the factors into our budget and also considered planning for partners in it. As a result, we were able to effectively target and get the correct partners to assist us in the marketing and promotion of the event.
We also decided that we will always over deliver to our partners and sponsors and even though based on previous experiences we were expecting some unpleasantness from the sponsors. Surprisingly since, as a matter of principle, provided so much more than they were expecting, we
had our sponsors praising the event long after the conclusion of the event.
There are many other aspects and insights into the conference which include the "special roles played by Apex industry bodies", the "Venue Story", the Government story, the story of the Advertisement timelines etc. The story of WSME are many and each more interesting and planning is already underway for the next World SME Conference, Get Set Grow, There will be more to share from this side in the near future, until then
Leaders establish the vision for the future and set the strategy for getting there; they cause change. They motivate and inspire others to go in the right direction and they, along with everyone else, sacrifice to get there."
The Milagrow World SME Conference concluded successfully on the 13th of December 2008. The conference was a tremendous success, and I'm not shooting off the cuff here. The success of the conference is measurable in terms of the number of speakers, number of delegates, Press attendance, number of Partners, profitability, number of press ads etc.
The conference to an outsider would look like Mission Impossible part I - II - III combined, but here at Milagrow, as with any other projects, we are strivers. The conference was properly conceived and though we were on a road less travelled, we were sure of the positiveness of the outcome. The idea was conceived almost a year back with basically two ideas:
I. Bring Global MSMEs on a common platform to interact with each other as well as with industry captains and govt officials to interact and understand the challenges faced by the MSME ecosystem.
II. Take a leap as an authority in the MSME space in India
Based on these ideas, the development of the conference began. This started with creation of the compilation of the ideas and output we expected to achieve from the conference and what was our plan to achieve the same. Mind you, at this point in time, Milagrow was just a young organisation - less than 1 year old! But, the difference between Milagrow and any other organization is that we dream big and then strive to achieve that dream.
Once we created the compilation of the ideas, expected output and our plan for achieving this into our event abstract, came the next step of setting up our advisory board. The advisory board plays an important role in the success of any conference. The advisory board not only plays the role of being a mentor to the entire conference but at the same time from their experience and expertise and network open doors which were previously inaccessible and unreachable.
Once the backbone of the event was in place, came the setting up of the skeleton of the conference. A painful, step-by-step time consuming process. This included developing the proposed schedule for the event based on the event abstract, getting the comments of the advisory board on the proposed schedule and their recommended speakers for the same. This was followed by the arduous task of actually inviting the speakers and the Government officials. Before proceeding further, I must point out that at the beginning of the preparation of the conference we had decided that our event would be world class or we would not do it at all. Leading from here you can well imagine the level and seniority of the speakers we were looking at. Each and every speaker was a expert in their field and was either in meetings or travelling 300 days in a year!!
At the same time that speakers were being invited we parallely started the development of Government Linkages and partnerships for the event and also scouting for sponsors and partners for the event. All this parallel work was possible only because the event was conceptualized well and the plan was made in pain staking detail. In case of sponsorships we had already planned for the kind of paid sponsorships and the proposals for the same even as we were preparing the abstracts. Similarly all possible partnerships in kind and with associations were thought out and proposal for each created. Not only that, the team had brainstormed and selected the target organizations/associations for each of the proposed partnerships. This was the reason that even though we were a lean team we were still able to achieve much more than most of the organizations.
An important cost incurred in any marketing budget is the advertising budget. And considering the fact that we had to at all points in time keep our budgets in check this was a major factor of concern. Now if we consider that we placed ad couple of advertisements in the print media our expenses would have been 10 times and if we added television advertisements then - good bye profitability! This is where our carefully laid out plans worked and we made the most effective utilization of our database of 6.6 lakh users and also effective usage of digital marketing. This not only helped us achieve many more eye balls but also allowed us to leverage the print media effectively. Our planning in advance helped us tremendously, since we had built in the factors into our budget and also considered planning for partners in it. As a result, we were able to effectively target and get the correct partners to assist us in the marketing and promotion of the event.
We also decided that we will always over deliver to our partners and sponsors and even though based on previous experiences we were expecting some unpleasantness from the sponsors. Surprisingly since, as a matter of principle, provided so much more than they were expecting, we
had our sponsors praising the event long after the conclusion of the event.
There are many other aspects and insights into the conference which include the "special roles played by Apex industry bodies", the "Venue Story", the Government story, the story of the Advertisement timelines etc. The story of WSME are many and each more interesting and planning is already underway for the next World SME Conference, Get Set Grow, There will be more to share from this side in the near future, until then
Leaders establish the vision for the future and set the strategy for getting there; they cause change. They motivate and inspire others to go in the right direction and they, along with everyone else, sacrifice to get there."
Tuesday, January 20, 2009
The Delegates at the Conference
-Contributed by Charu Gupta, Knowledge Buddy
The 1st World SME Conference organized by Milagrow was a huge success and went off very well. I was a part of delegate registration team where we approached various Associations, Banks, Retail and IT Companies specifically dealing in SME sector who could participate as delegates and gain from the conference. The Mumbai blasts tragedy had just struck the whole country few days before the conference but that too didn't deterred us and also our participants and we saw massive participation from the industry and the event was attended by more than 250 delegates.
The task of delegate registration was started in the last week of October which was a little late but still we managed to get pretty good response. We tied up with various prominent associations and portals which helped us to create the buzz and seek active participation for our conference. The whole delegate registration process involved getting the delegates, making follow-up calls to prospective delegates, receiving the payments of confirmed ones and sending them invoice and an acknowledgment mail immediately, sending the reminders to those whose payments were due, sending final mail informing about the venue, timings and the final schedule to all the delegates and also meanwhile maintaining a complete excel sheet of the same.
On the day of the conference the delegates were received at the registration desk where we had prior segregated list for press, special guests, paid delegates and delegates from sponsors and partners. The names were cross checked and the delegates were handed over the delegate kit and the schedule of the conference. On the second day, the names were again cross-checked to avoid any chaos.
At the end of each day, we distributed a feedback form where delegates were askedto rate each session and give their suggestions which we compiled after the conference. Most of the sessions were rated "Good" and the delegates appreciated the well managed conference and its format. Attendees gained a lot of valuable insights on the issues faced by Small and Medium Enterprises and how they could make their businesses more competitive in the current scenario.
Active participation from SMEs as panelists where they can share their own experience, Awards to SMEs in various areas, Success stories of SMEs, Session focusing on exports from SMEs, Session on business development services for promotion of first generation entrepreneurship, Keeping more time for Q&A and networking, etc. were some of the suggestions which were given by the attendees.
On the operational part, we faced a little difficulty due to the absence of specific badges. We hadn't created specific badges for delegates, press and partners which created a little hassle. Also, I feel that if we would start a little early to register delegates, we would be able to generate much more participation from SMEs for our next World SME Conference 2009 and could make it a greater success.
The 1st World SME Conference organized by Milagrow was a huge success and went off very well. I was a part of delegate registration team where we approached various Associations, Banks, Retail and IT Companies specifically dealing in SME sector who could participate as delegates and gain from the conference. The Mumbai blasts tragedy had just struck the whole country few days before the conference but that too didn't deterred us and also our participants and we saw massive participation from the industry and the event was attended by more than 250 delegates.
The task of delegate registration was started in the last week of October which was a little late but still we managed to get pretty good response. We tied up with various prominent associations and portals which helped us to create the buzz and seek active participation for our conference. The whole delegate registration process involved getting the delegates, making follow-up calls to prospective delegates, receiving the payments of confirmed ones and sending them invoice and an acknowledgment mail immediately, sending the reminders to those whose payments were due, sending final mail informing about the venue, timings and the final schedule to all the delegates and also meanwhile maintaining a complete excel sheet of the same.
On the day of the conference the delegates were received at the registration desk where we had prior segregated list for press, special guests, paid delegates and delegates from sponsors and partners. The names were cross checked and the delegates were handed over the delegate kit and the schedule of the conference. On the second day, the names were again cross-checked to avoid any chaos.
At the end of each day, we distributed a feedback form where delegates were askedto rate each session and give their suggestions which we compiled after the conference. Most of the sessions were rated "Good" and the delegates appreciated the well managed conference and its format. Attendees gained a lot of valuable insights on the issues faced by Small and Medium Enterprises and how they could make their businesses more competitive in the current scenario.
Active participation from SMEs as panelists where they can share their own experience, Awards to SMEs in various areas, Success stories of SMEs, Session focusing on exports from SMEs, Session on business development services for promotion of first generation entrepreneurship, Keeping more time for Q&A and networking, etc. were some of the suggestions which were given by the attendees.
On the operational part, we faced a little difficulty due to the absence of specific badges. We hadn't created specific badges for delegates, press and partners which created a little hassle. Also, I feel that if we would start a little early to register delegates, we would be able to generate much more participation from SMEs for our next World SME Conference 2009 and could make it a greater success.
Learning Experience – “Call for Paper” @ World SME Conference 2008
Contributed by Neha Bhatia, Knowledge Assimilator
Trust yourself. You know more than you think you do. - Benjamin Spock
Hard work, sincerity and trust in ourselves sometimes make us achieve what we think we would never be able to do. This spirit was seen at first of its kind truly global “World SME Conference 2008”. Two of my most enriching experiences during this time were handling the deliverables with Industry associations and working on Paper presentations by best scholars of India at the “Call for Papers”. This experience taught me certain practices to follow in everyday routine like
Follow up is the key to execution
Deliver what you promise and thrive for what you deserve
It is the result in the end that matters, small achievements might not yield the final product. Try/Fight until you don’t succeed
The last point takes me back to how each reminder for a mailer to be sent out to the association would get us delegates. With each delegate confirming we would get energized to get more. But it was the end which made us satisfied when we saw packed conference hall.
Call for papers was in itself an inspiring task. Starting from marketing to get scholars to write papers, confirming the Jury Panel, accepting the abstracts, informing to each dignified scholar of acceptance or rejection of their abstracts, reminders for deadlines of submitting Papers, accepting papers, sending papers out to the Jury, awaiting their results and finally getting the best scholars on board for Paper Presentation on 13th December 2008.In between these we also faced some minor issues which taught us very meaningful lessons like changing of our Jury at the last moment. With all these I not only came in contact with such well researched papers and scholars but also got to explore new activities everyday.
I would like to give light on post conference comments by few of our Professors who submitted well researched papers
It was a pleasure attending the conference. Thank you for all the arrangements and hospitality. Prof. Subhash Kasturi ,e4e Business Solutions
You people were wonderful. Thanks for the hospitality. Looking forward to meet you again. Dr. Sheenu Jain IBS Goa
In the end, there were few next year suggestions for paper presentation that we should target 250 final papers from 1000 initial contributions and they should be majorly contributed by SME practitioners.
Well done Team Milagrow!
Trust yourself. You know more than you think you do. - Benjamin Spock
Hard work, sincerity and trust in ourselves sometimes make us achieve what we think we would never be able to do. This spirit was seen at first of its kind truly global “World SME Conference 2008”. Two of my most enriching experiences during this time were handling the deliverables with Industry associations and working on Paper presentations by best scholars of India at the “Call for Papers”. This experience taught me certain practices to follow in everyday routine like
Follow up is the key to execution
Deliver what you promise and thrive for what you deserve
It is the result in the end that matters, small achievements might not yield the final product. Try/Fight until you don’t succeed
The last point takes me back to how each reminder for a mailer to be sent out to the association would get us delegates. With each delegate confirming we would get energized to get more. But it was the end which made us satisfied when we saw packed conference hall.
Call for papers was in itself an inspiring task. Starting from marketing to get scholars to write papers, confirming the Jury Panel, accepting the abstracts, informing to each dignified scholar of acceptance or rejection of their abstracts, reminders for deadlines of submitting Papers, accepting papers, sending papers out to the Jury, awaiting their results and finally getting the best scholars on board for Paper Presentation on 13th December 2008.In between these we also faced some minor issues which taught us very meaningful lessons like changing of our Jury at the last moment. With all these I not only came in contact with such well researched papers and scholars but also got to explore new activities everyday.
I would like to give light on post conference comments by few of our Professors who submitted well researched papers
It was a pleasure attending the conference. Thank you for all the arrangements and hospitality. Prof. Subhash Kasturi ,e4e Business Solutions
You people were wonderful. Thanks for the hospitality. Looking forward to meet you again. Dr. Sheenu Jain IBS Goa
In the end, there were few next year suggestions for paper presentation that we should target 250 final papers from 1000 initial contributions and they should be majorly contributed by SME practitioners.
Well done Team Milagrow!
Friday, January 9, 2009
Milagrow - Venture Catalyst to Private Equity
-By Sarath Srinivasan
There have been quite a few SME focussed private equity funds that have set up shop in India in the last few years. This trend has been driven by the significant demand for growth capital in the SME sector which has been growing at a rapid rate during the sustained economic growth period of the last few years. The private equity investors, besides providing the growth capital, help their portfolio companies grow by providing strategic insights and instilling corporate governance standards. But in the SME sector, lack of management capital is a significant barrier to growth. Management skills, critical to the success of an enterprise, are in short supply and this problem is even more acute in the SME sector. Many private equity investments are in owner driven companies which need to make the transition to a professionally managed enterprise. For the owner of such companies, the transition is fraught with risks due to the possibility of high attrition rates. An SME owner might hire professionals into senior management positions in his firm but in case the new hire leaves within a short span of time it leaves the owner in a worse situation than he was previously in.
While private equity investors would have the management skills essential to the success of the companies that they have invested in, providing management support to the portfolio companies is not high on the priority list of things-to-do. The typically small PE firms, remain focussed on increasing the number of investments that they make. They are in no position to provide the intensive management hand-holding that SMEs require. SME managers learn best when they are taught with a hands-on approach. They learn best in the context of environments in which they are comfortable – this means learning on the job. This is where the venture catalyst approach works. With one of our clients we were able to clearly understand the market scenario was vastly different from how the client had imagined it to be. But it was hard task to communicate our ideas and build consensus within the client organisation. It was only when we made joint visits with sales team members to some of their stores that we could convince them that we were right. The client was not convinced about our suggestions and insights until he learned it in the context of a store visit.
With the venture catalyst approach we can make a real difference to the portfolio companies of private equity firms. The companies could need management support in either scale-up stage, operational excellence setting. In certain cases it could even be a turn-around for investments that have gone bad. A key question to be answered here is the mode of operation of the venture catalyst in such firms. In companies where the PE owns a minority stake they can only suggest and recommend the services of the venture catalyst whereas in case of a majority stake they can make the decision to bring in external support. Once the decision is made a process has to be put in place to follow through on the strategic initiatives that the company requires. This is taken care of by constitution of a Decision Management Board (DMB). The improvement initiatives/ projects that need to be launched in any company will have to report to a Decision Management Board that includes a senior member each from the PE firm, Milagrow and a representative of the promoter. The DMB will set the strategic agenda for the company. Project teams are formed with team leaders from within the client organization. The teams will report to the DMB during review meetings. Knowledge Guides from Milagrow become team members in these initiatives and drive the change by adopting a hand-holding approach with the SME managers.
The benefit of the approach is that it allows the PE firm to focus on what they are good at and allows them to ensure that the strategy is having an on-the-ground impact on the organization. The cultural transition that the promoter-centric organization has to go through is facilitated by this arrangement. The ability of the organization to deliver on the expectations of the DMB are enhanced allowing the PE investors to feel much more in control and yet not be involved on a day-to day basis. The management capital acts as a second pillar to support to the financial capital provided by the PE firm.
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