Effective use of emotional intelligence in Leadership

Posted on April 17, 2015 by IBS India

Today, effective use of emotional intelligence has become a necessary part of leadership excellence. The use of emotional intelligence in an effective manner can help the leaders at the highest levels of organizations in developing a competitive edge. They are able to lead the evermore difficult roles as leaders which only a few people can do and that is possible with the power of emotional intelligence.

A brief history of the evolution of the concept “Emotional Intelligence”

The term “Emotional Intelligence” was launched in the year 1990 when Peter Salovey and John D. Mayer coined this term. They described it as “Emotional Intelligence is a form of social intelligence which involves monitoring one’s own and other’s emotions and feelings thus making discrimination and finally using this discrimination in guiding one’s thought process and action. A valuable research program was also initiated by Salovey and Mayer to explore the importance and significance of emotional intelligence along with developing valid measures for E.I.

In the year 1995 Daniel Goleman released his bestseller book named “Emotional Intelligence” and this book became a landmark for spreading the popularity of the concept and the term “Emotional Intelligence”. With the rise of this concept, the importance of getting success in life as well as work was recognized. Organizations started recognizing how their leaders and managers need to grow their understanding of themselves and others.

Need for emotional intelligence in Leadership

The classical models of leadership do not involve the use of emotional intelligence in leadership and are usually associated with the great figures in history with a military style leadership. It presents a charismatic as well as ruling type of images of the leaders. Even today people use the same language for leadership which is a tough, bold and brave image with a strong urge to resolve a purpose. But the actual leadership needs today are different because of the following reasons-

The workforce today does not like the autocratic leadership style adopted by the leaders who followed classical models.
Leadership needs to match today’s growing sense of democracy and the freedom of workforce.
The employees today have more and more options to change the organizations because of the growing competitive environment.

For leaders to be successful in leading, emotional intelligence is essential. Well, you can easily judge who will succeed – A leader who often shouts at his team under stress or the leader who is always in control, calmly handling the situations?

Five main elements of Leadership

Daniel Goleman describes five main characteristics of emotionally intelligent people which are described below:

Self awareness
Self Regulation
Self Motivation
Empathy
Social Skills

Let us look at all these elements in more detail and understand how to grow as a leader using them.

Self Awareness:

Self awareness means that you know well about your feelings and you well understand how your actions can affect the people around you. Being self aware when you are in leadership role signifies that you have a clear idea of your strength and weaknesses and you always behave with humility.

How can you improve your self-awareness?

Self awareness can be improved by keeping notes of your thoughts and feelings and writing them down on a paper. This will take just a few minutes and with the help of it you can move to a higher degree of self awareness.

Self awareness can be improved by choosing how you react on situations. Whenever you face anger or other strong emotions, slow down to examine why? Remember whatever the situation is, you can choose how to react on it.

Self Regulation:

Self regulation is important in the field of emotional intelligence and leaders who regulate them effectively rarely attack others verbally. They do not make rushed emotional decisions or compromise values or stereotype people. Self regulation is all about staying in control and not doing anything emotionally.

How can you improve self regulation in yourself?

Understand your values. If you really know what you can compromise or what not and what is important to you, then it will not be hard for you to make moral or ethical decisions. You will always make the right choice.
Do not blame others and make commitment to admit your mistakes and face the consequences.
Be calm and practice it. In challenging situations it is always desired by the leaders to be Do not shout on others to relieve the stress. Do deep breathing to make you calm. Write down all negative things on a piece of paper and throw it away. These all help you to challenge your reactions to ensure they are fair.

Self Motivation:

Self motivated leaders are highly motivated towards their goals and they set really high standards for the quality of their work. Improving self motivation can be achieved by the following things:

As a leader think what is your purpose of doing the job- Take some time to understand or remember what you loved in this job and what you want from this job. If you are unhappy in your role and you are struggling to find the purpose then try to understand the problem. Reaching the root of the problem can help to solve it positively.
Know how motivated you are. Assess yourself to know how motivated you are to lead. If you are less motivated then find resources which will help you in getting more and more motivated.
Be optimistic as the motivated leaders are always motivated. It does not matter what the problems they face.

Empathy:

Leaders should have empathy to manage a team or organization successfully. The leaders who have empathy and compassion are able to put themselves in someone else’s situation and work accordingly. They help others grow, stop those who are unfair and provide right feedback for those who need it.

Ways to improve empathy in yourself:

Take the time to look at situations from other point of view also. Look with other people’s perspectives also. It is ok to support your own point of view but think from other point also.
Show a positive body language. When you listen to others, be attentive to your body language. Do not cross your arms or bite lip which shows a negative body language. Learn a positive body language and show it to your employees when you listen them.
Respond to the feelings of your employees. If you find any employee working late, then tell him that you also do not like it and you are also frustrated with that. Provide compensation with paid time offs to the employee who is working extra hours.

Social skills:

Leaders who are good in this element of Emotional Intelligence have excellent communication skills. They are really good in gaining the support of their team with the help of social skills and communications and always encourage their team to do well in new projects and assignments. Leaders with good social skills are always best at resolving conflicts and change management.

How to improve social skills in yourself?

Learn how to resolve the conflicts well. If you want to succeed well as a leader then it is really important to resolve the conflicts between team members, customers and vendors.
It is really needed to have good communications skills to succeed in the art of social skills as a leader. You have to be a great speaker as well as a good listener.
Praise others- Without the art of praising others it is really difficult to succeed as a leader. Learning how to praise others is an art but gives good returns in your favor and also helps in gaining the loyalty of your members.

Thus it is clear that the ability to tune yourself with your emotions and having a good situational awareness are the powerful tools for a successful leadership. If you are leading a team and want to use the art of emotional intelligence successfully in Leadership then give some time to improve the 5 elements of emotional intelligence explained in this article. This will surely help you to excel in the future!

Contributed by Ashish Singh Parihar ( Class of 2008, IBS PUNE )

“Base Year Change And Its Impact On Future Economy Of Country”

Posted on April 16, 2015 by IBS India

First estimate of National Income was made by Dadabhai Naoroji in his book Poverty and Un-British Rule in India while the first scientific estimate was made by Dr.V.K.R.V Rao for financial year 1931-32.

In Independent India first National Income Estimate was published in 1956 with 1949 as base year. Since then there has been seven base year changes and the new base year is 2011-12. The change in base year is required essentially because data being used for the estimation becomes outdated with passage of time. With changing time economy too changes leading towards new basket of goods and services as well as increase / decrease in variation in weight assigned to the existing categories of goods and services depending upon the change in its consumption pattern. Hence base year 2005 did not included importantly products and services based upon new technologies like smart phones, LED TV’s at the same time products like old generation TV’s etc were included in it whose sale and production is negligible in today’s time thus causing underestimation of the real strength of the economy.

The base year change and selection was decided based upon Census 2011 reports, National Sample Survey Organisation’s employment-unemployment and Consumer Expenditure Survey 2011-2012, Debt and Investment Survey 2013, Annual Survey of Industries 2012-2013 and all India Livestock Census 2012. Epso facto base year change is regular practice among developing economies considering the fast changing structure of world economy as well as need of updated National Accounts based upon latest set of information.

The eloquence of this year’s base year change was in the fact that this time it was followed by change in method of GDP calculation which is internationally accepted. GDP is the money value of all the finished goods and services produced in the domestic territory of a country in a year time. Domestic territory includes political boundaries, territorial water (including ships), embassies as well as consulate offices.

It should be noted that base year changes are different from annual revisions in National Accounts because in annual revisions, changes are made only on the basis updated data while there is no change in framework for calculation nor any new data source is used. On the other hand in case of base year revision, apart from change in referene year of calculation conceptual changes as recommended by the international guidelines are GDP incorporated too. Hence the current base year change is one of the largest exercises of base year revision for GDP ever undertaken in India and is surely breakthrough in framework from the previous series.

Before the current base year change GDP growth was estimated at factor cost, which excluded indirect taxes but included subsidies. Factor cost here means factor inputs namely Land, Labour, Capital and Entrepreneurship while the non factor input costs are raw material and transportation.

Thus, the old formulae was

GDP(Factor Cost)=GDP(M.P)-Indirect Taxes+ Subsidy

Here Indirect Taxes included Excise, VAT, MODVAT Sales Taxes etc.

In the new definition of economic growth, in place of GDP at factor cost, GVA(Gross Value Added) at base price is used.

GDP(M.P)=GVA(B.P)+Indirect Taxes-Subsidy

The difference between the GVA at base price and GDP at factor cost is that production taxes (taxes which are imposed even if products are not produced eg: Property) will be included.

Change in base year implies two things, first is the change in price and quantity base for individual price and quantity relatives and secondly the change in weights used in aggregate individual quantity to sub-indices and to aggregate then into more indices.

Now the effect of base year change followed by changed calculation method resulted into increased size of economy. For the year 2013-14 through new method the GDP at market price escalated to 99,21,106 crore* which through old method was 61,95,845 crore* while the GDP growth rate for the year 2013-14 jumped from 5 percent to 6.9 percent. The size of Indian economy jumped to Rs 111.7 lakh crore in 2013-14 from the earlier estimate of Rs 105.4 lakh crore. Increased size of economy eventually caused decrease in the fiscal deficit as well as current account deficit, which is according to fiscal consolidation targeting done by government according to which fiscal deficit had to be 3 per cent of the GDP by 2016-17.Moreover the whole new process of GDP calculation led to variation in sector wise contribution of Agriculture, Manufacturing and Service Sector in the overall GDP. Contribution of Manufacturing sector increased from 12.9 percent to 18 percent while that of agriculture sector went below as compared to earlier figures.

Nominal GVA increased by 13.2% during 2013-14 as compared to last year mainly because of higher growth in ‘trade & repair services’ (14.3%), ‘communication and services related to broadcasting’ (13.4%), ‘other services’ (10.7%),‘public administration & defence’ (4.9%), ‘agriculture, forestry and fishing’ (3.7%), and ‘construction’ (2.5%) sectors.other Key indicators that got affected were Net National Income,Gross National Disposable Income,Gross Savings as well as Consumption Expenditure.

The changes brought into the method of calculation is much needed step forward by India towards adapting more universally accepted methodology for National Income Account Analysis as prescribed by International Monetary Fund. This is among one of the various initiatives by the present government to showcase as one of the best possible investment destination in world. Truth be told in 2002 Ministry of Corporate Affairs was faced with problem of providing service to nearly 7.5 lakh corporate entities,and the fluency of services provided was hampered because of exorbitant amount of paperwork involved and various restrictions. Similarly back then there was no concept of single window clearance for new entities or the concept of Single Person Company in India hurting India’s investment prospect. Currently new initiatives implemented like MCA21 Mission mode project which pledges to provide online access of all the government services to business prospects with reduced execution time, similarly concept of Financial SEZ’s, separate Public Debt Management Agency are among various steps towards improving countries stature among leading global investment hubs in the world.

Contributed by Sharique Hassan Manazir (Class of 2011-13, IBS HYDERABAD )

How to remain at top of your career!

Posted on April 16, 2015 by IBS India

One of my professors at IBS told me a very valuable life lesson. He said reaching at top could be easy but sustaining at top is the most difficult part of anyone’s career. Mark Zuckerberg and Steve Jobs are special persons who lead a start up to soaring success and sustained the success for long.

Imagine a cricketer relies on not just his strong reflexes but one of the most important assets is his power to see. A cricketer since childhood, Mansoor Ali Khan pataudi permanently damaged one of his eyes in a road accident. This led to him seeing doubled image. Though he could no longer see clearly, pataudi did not give up. He feared his cricket career was over but he returned to the field to play with just one eye. He is today regarded as one of the greatest captains India has ever had! Not only he played well but brought laurels for India. He remains at top of his career throughout his cricketing journey.

Great minds are related to the brief span of time during which they live, as great buildings are to a little square in which they stand. Recovering from a tennis-elbow injury was the most difficult phase in Sachin Tendulkar’s illustrious cricket career with the master batsman fearing he would never be able to hold a bat again after surgery but he did and become the 1st batsmen to score 200. Not only that, he peaked his career post his surgery and till his retirement he remained the best batsmen the world has ever seen.

I’ve read about many grateful people and have witness several unprecedented success stories. Whenever we see a successful person, we only see the public glories; never the private sacrifices to reach them. I’ve tried to connect the dots here; their ingredients to remain at top remain common and easy to imbibe for us.

Bring in Innovation

Innovation distinguishes between a leader and a follower. You need to bring in change without change there is no innovation, creativity, or incentive for improvement. Innovation processes are always heavily front-loaded. They focus the lion’s share of attention on idea generation, but how effectively you use the idea makes you an exceptional person. In my current role, I try to bring in two things and put them together in a new way to be creative. The heart and soul of individual success is creativity and innovation. I always wonder how Disneyland continues to grow and I think their success story will never end till imagination is left in the world. I suggest having an incredible extrovert approach towards innovating yourself and others around you.

Take Risks

There is no greater country on Earth for entrepreneurship than Unites states. In every category from the high tech world of Silicon Valley, to University R&D labs to countless business owners, American’s are and will be taking risks. Risk can lead to great victories or defeats. Even if you are defeated, the lesson will be valuable for the next stage of life. I choose to live a life of an entrepreneur who takes risk visually impaired and feel their way up. You must accept that you might fail; then, if you do your best and still don’t win, at least you can be satisfied that you’ve tried. If you don’t accept failure as a possibility, you don’t set high goals, you don’t branch out, you don’t try – you don’t take the risk.

Excellence in Work

Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected. I remember an interesting story, we developed an e-portal in my previous organization in the beginning the portal developed a lot of problems. Everyone in the group picked on us; they questioned our ability to manage large projects, there were unnecessary escalations and people were not happy with the work. My leader told me an important lesson, he said, in character, in manner, in style, in all things, organization looks for excellence. I worked throughout that night with different stakeholders, fixed all the issues and guess what “next to excellence is appreciation”. I did a common thing in an uncommon way.

Determination and Persistence

There are times to stay put and back down, and what you want will come to you, and there are times to go out into the world and find such a thing for yourself because the brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something, because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people not ME. I really like what great Dhirubhai Ambani said “if you don’t build your dream, someone else will hire you to help them build others”. Remember it’s not that you are so smart; it’s just that how long you remain with the problem.

Trust your instincts on New Opportunities

Opportunities are never given, they are taken. Stop waiting for handouts in life and go out there and get what you want. Trust your instincts because if it doesn’t feel right inside it won’t feel right for you as time goes by. Trust that little voice in your head and do what you feel is most beneficial for your well-being and satisfaction. If you haven’t already noticed, the real world is filled with a lot of intimidating phases you must participate in to grow up. Don’t ever hesitate to give yourself a chance to be everything you are capable of being. What brings out the best version of yourself is the act of standing up to what scares you most. The only person telling you to be afraid of these things is you. Engage in discomforting activities that you know will make you a stronger, more courageous person afterwards because they will never fail to do so.

Guys I’m not the best but I think of becoming one someday, but I am determined to be cheerful and happy in whatever situation I may find myself. So be happy and enjoy your life!

All the best!

Contributed by Vaibhav Chandra (Class of 2009, IBS HYDERABAD)

A Brief Analysis of Union Budget 2015

Posted on April 15, 2015 by IBS India

Introduction:

The Finance Minister (‘FM’) hasfinally presented his much hypedUnion Budget of2015 on February 28, 2015.Undoubtedly, the FM has set the momentum for India growth story which is duly reflected in the optimismof 7.4% GDP growth rate in currentfinancial year (‘FY’) andgrowth rate at 8.1% for the subsequent year. This, if achieved,will make India as the fastest growing economy in the club of big economies. And really, the budget has set the stage for it.

It can be observed from the FM’s budget speechthat hisfocus is on India’s balanced and phase wise growth while maintaining financial discipline in terms of managing fiscal deficit. The FM has well performed a tough task of covering maximum participants’ viz. agriculture, industry and SMEs/MSMEs by taking encouraging steps in some or the other way.Further, some of the provisions reconfirm that this government is committed to tackle tough issues like black money, corruption and also working towards skill development, health, sanitation, and fair allocation of resources between states and center etc.

Analysis:

A macro analysis of key economic figurespaints a rosy picture of the Indian economyas CPI inflation has reduced to 5.1%, the current account and fiscal deficit is expected to be 1.3% and 3.9% respectively, and foreign inflows in the countryhas been about USD 55 billion since April 2014, resulting in forex reserve increase to a record USD 340 billion.

A key highlight reflecting how this budget will impact the Indiaeconomy in a short and long term is as below.

Curbing Fiscal deficit at 3.9% and Current Account Deficit at below 1.3% for FY 15-16:

Impact:

Lower fiscal deficit will help India in stabilizing or up gradation of sovereign rating. In these conditions, the government will be able to raise debt at comparatively lower rate.
Low Current Account Deficit reflects reduction in import bill (largely wake of lower crude price). At the same end, the country’s exports have been stagnant, though not declined.
As a consequence, it leaves space for the Reserve Bank of India to start reducing key rates in the current FY, which can make borrowings for individual and industries cheaper. Lower cost of borrowings would encourage domestic borrowing and discourage external commercial borrowings.
All these together would provide thrust to the economy.

Higher allocations towards Social Sector:

Impact:

It is clear that the government does not want growth at the cost of negligence of social sector and hence the FM has allocated higher resources vide different schemes for this sector.Below is the brief discussion on some of the announced schemes.

Insurance coverage to all Indians at cheaper rates through ‘PM Jeevan Jyoti Yojna’and second one is to provide pension cover through‘Atal Pension Yojna.’
A special allocation for Swatch Bharat and relief to senior citizens in their medical expenditure.
The government’s aim to build house for every one by 2022 and electrification for every one till 2020 is an ambitious plan which will encourage low and affordable housing.
Higher allocations for MNREGA will ensure hike inminimum wages level in rural Indiawhich in turn will improve disposal income of rural Indian.
Though details of the above schemes are awaited and will have to also see that how soon these are implemented.

The governments wants to transfers of above benefits through JAM Trinity (Jan dhan, Aadhar and Mobile Platform),and ensure that transfer of benefits should be in a leakage-proof, well-targeted and cashless manner.

SMEs and MSMEs:

Impact:

The government haswell understood difficulties faced by SMEs and MSMEs in its working capital cycle and hence introduced electric bill discounting schemes. This will be a kind relief to SMEs and MSMEs who are suffering from working capital issues. Though details of the scheme is awaited.
Priority funding to entrepreneurs from Schedule Cast and Schedule Tribes through Mudra Bank. It will provide access credit to them which they can use in expansion of their business. (Details are awaited)

Infrastructure:

Impact:

Increase in capital expenditure of Rs. 80,844 crore by Public Sector Units. The higher capex will result in enhance gross capital formation ratio and creation of fixed assets for these companies.
Setting up a special National Infrastructure and Investment Fund (‘NIIF’) will provide much required funding to infrastructure companies. They can utilize such funds for development of infrastructure.
Further, tax free bonds would bring much required funds in road, rail and irrigation projects.
Announcement of Atal Innovation Mission (AIM) to bring world class expertise will gain in better management of these large scale projects.

Education:

Impact:

68,968 crore to the education sector and announcements of new AIIMS, IITs, IIMs, in selected states to provide more opportunities. Further encouragement for world class research institutes to make India’s young graduates employable.
Addition/upgradation of new schools to ensure enrollment of every child into formal schooling system, to help in eradiating illiteracy.
Support tominority youth who do not have a formal school-leaving certificate to obtain one through ‘NaiManzil’ scheme to find better employment.

Make in India:

Impact:

Reduction in corporate tax rate from 30% to 25% over the next 4 years will encourage higher investment, high growth and in turn creation of more jobs.
Announcement of Goods and Service Tax has reflected the government’s will to bring global best practices to Indiataxation system.
Announcement of removal of unnecessary approvals and simplification of tax procedures. Thiswill help in ease of doing business in India and thus fulfilling dream of the prime minister’s brain project of ‘Make in India’.
Online central excise and service tax registration will be done in two working days. Time limit for taking CENVAT credit on inputs and input services is being increased from 6 months to 1 year as a measure of business facilitation.

Impact on a common man’s budget:

It was expected by many that the FM would raise personal income tax exemption limit to Rs. 3 lakh per year but unfortunately it has not happened. However, there is some relief given in way of increase in transport allowances (beneficial for employees) limit to Rs. 19,200 and medical expense limit to Rs. 25,000 under section 80 D.
The rate of service tax has been increased from 12% to 14%in this budget which will make services costlier for common man.

Conclusion:

Though, it is very difficult to please everyone and full fill their expectations but Mr. FM has tried to do so in a balanced way. In other words, I would say he has acted like a pilot, who runs an aircraft on active runway at full speed before its takes-off. The FM has rolled out a budget which will propel growth of the economy at full speed before it starts to fly in next couple of years.

Contributed by Janmang Mehta ( Class of 2010, IBS AHEMDABAD )

Top 5 Case Studies for Indian Management

Posted on April 15, 2015 by IBS India

Case studies are one of the most crucial forms of learning in B-school curriculum. Be it mergers and acquisition, launch and success of a new product line, branding strategy, some management fiasco and others, if we look back, we can find hundreds of management incidents in the past, that hold the potential of making a strong case in our books.

Case studies are not always success stories; they are also stories of failure. They help us understand the fast changing set of market realities and managerial challenges, shifting consumer expectation and the race to meet them.

Though there would be many, but I picked up these 5 corporate incidences/cases, that not only make excellent study material for B-school learning but also are the reflection of the uncertain nature of business. Some of them startled us; some amused us, while some are just classic examples of excellent management strategies and success.

Flipkart

Success in an infant industry is the story of Flipkart. A start up launched in 2007 with an investment of just Rs 4 Lakhs has come to grow into the first billion dollar company in Indian e-commerce. Flipkart exploited vast consumers segment waiting to enjoy the comfort of shopping online. The company’s core value lies in the operating mantra: “Don’t count your customers before they smile”!

Major factors leading to Flipkart’s success are:

Strong backend operations with its own warehouse and inventory management system.
Consistent customer service with focus on speedy resolution of delivery and faulty product issues. It is interesting to know that the co-founders of the company feel that discounts cannot replace the customer’s satisfaction of prompt service and efficiency.
Innovation is next. Offering options for cash-on-delivery and credit card payment at the door step provide further choice and comfort.
Flipkart succeeded in adding the ‘surprise and delight’ factor for customers. They are treated to offers that are most suited and relevant to their preferences. The company’s Big Billion Sale was an aggressive step towards the same direction. Many criticized the retailer for jumping way too ahead without much preparation for the challenge. Though Flipkart fumbled in managing site traffic and product demand-supply gap, it maintained its goodwill by sending an apology with explanation letter to all its customers. It made adequate amends and managed to won back its loyalists.

#Flipkart’s rules of success are simple and clear – Engage customers using novel ideas, quality products and seamless service.

Satyam

The much talked about corruption scam that took place in Satyam Computer Service – one of the most promising IT companies in India – startled the investors, foreign clients and Indian masses. This builds a famous case for corporate governance and fraudulent auditing practices. The company misrepresented its accounts and misled the market by lying about the company’s financial health.

Satyam’s founder and then chairperson Ramalinga Raju manipulated company’s accounts for close to seven years before confessing in January 2009. Satyam inflated its profits and revenues on paper, which led to increase in company’s share prices and boosted its market capitalization.

Since, most of the figures shown in company’s balance sheet were fictitious; the company was left with very less cash. Interestingly, Satyam paid INR 186.91 crore as tax over seven years on fictitious interest income from non-existent fixed deposits.

As per Raju’s confession, he needed and used the funds to acquire thousands of acres of land in Andhra Pradesh to make his mark in the booming realty market.

The 14000 crore worth Satyam fraud is the largest corporate scam in the history of India. The company was finally taken over by Tech Mahindra and with Indian government’s intervention a number of young workers were saved from unemployment. On 9^th April 2015, a special CBI court sentenced Raju to seven years in prison.

#Satyam was a scandal waiting to happen. It requires learning for anyone engaged in global services outsourcing and off shoring, the importance of openness and transparency.

The Mumbai Dabbawala story

This famous case of operations and supply chain management is used by many B- schools in India and abroad including Harvard. Recognized with Six Sigma level of accuracy, their model has earned them admirers from Britain’s Prince Charles to entrepreneur Richard Branson. So what is so unique and desirable about this case? Let’s see:

The dabbawalas in Mumbai have collected hot meals during lunch from customers’ often distance homes, and carried them to schools and offices across the city. They are known to use a unique delivery system that has been smooth, reliable, and has survived even extreme conditions.

Their whole process is linked closely to Mumbai’s railway system. It sets the speed and helps in scheduling the delivery process. The coding system that they use is simple and convenient for all the dabbawalas. They have specific code for the neighborhood where the dabba is to be delivered, a bunch of characters denoting the office address and the dabbawala who will make the delivery, and finally, a combination of colour for the railway station of origin.

They operate in self organized teams of 25 individuals each. The most experienced ones act as supervisors while also delivering their dabbas. Every dabbawala individually negotiates with his customers.

Might sound surprising but a good reason for their success is very less reliance on technology and utmost dependence on human capital. They are highly motivated because they realize the importance of their work. If they don’t deliver, a person somewhere ends up missing his lunch. For them, delivering food is like offering service to God!

Relying on their efficient and full-proof logistic system, Flipkart recently decided to partner with the Mumbai Dabbawalas to navigate the city streets.

#Their success model is basically based on few simple concepts of work ethic, community culture, honesty, integrity, discipline and time management.

Kingfisher Airlines

Vijay Mallya’s “dreambird” Kingfisher came under huge financial mess caused due to some uninhibited and high risk decision making. Launched in 2005, Kingfisher was grounded in late 2012 because of bankruptcy and non-payment of loans. On closing, the airline owed more than US$ 1 Billion to a consortium of 17 banks.

So what caused the demise of the glamorous airline despite having gained brand visibility and a loyal customer base?

Lack of direction: Kingfisher was initially launched as value added airline. It later positioned itself as low cost airline after it launched Kingfisher red (the spun-off fleet of Air Deccan).
Acquisition of Air Deccan to launch oversees operations failed. Most attempts to gain visibility on high traffic international routes (like Bangalore to London; Bangalore to Silicon Valley) did not yield healthy results. Also, with the takeover of crisis-ridden Air Deccan, Kingfisher suffered a loss of over INR10 billion (US$160 million) for three consecutive years
The airline also suffered due to frequent changes and absence of any long term CEO or MD.
In 2011, the airline’s fleet size was reduced as many of its aircrafts were grounded due to faulty engines. Even as the engines were overhauled, changing market conditions and rising fuel severely affected the yields.
Withdrawing from the low fare segment (Kingfisher Red), in order to divert its customer base to its premier segment (Kingfisher), did not help either, as the consumers would prefer other low cost flyers.

#A combination of external and internal factors hit the airline and it continued registering losses year after year. Mallya’s various attempts including suspending international operations, hiking fuel surcharges and seeking foreign investments by some oversees airlines failed as well; but lack of vision and firm positioning strategy, not understanding the consumer behavior, were the primary reasons, that the airline was unable to ever revive operations.

IPL

Conceptualized in 2007, club type format of cricket, IPL, with all ingredients of success, is the perfect example of controversy marketing. BCCI’s IPL generated a level of excitement and stupor usually seen in football, basketball and baseball franchises. Other than the large number of cricket crazy Indian fans, what else IPL did to become a global brand name?

Its value proposition is fast paced action and a 3.5 hour movie like entertainment. With high stakes involved IPL has showed the commercial potential of Twent20.
IPL has a global appeal. The international star players influence the level of support and interest. For instance, Shane Warne’s contribution to the Rajasthan Royals is much talked about with appreciation in Australia.
Media exposure was a crucial factor in the success of IPL. The season receives continuous coverage in local, national and international press even during the closed season.
Involvement of bollywood celebrities like Shah Rukh Khan, Preity Zinta, Shilpa Shetty as both franchisers and promoters brought in lot of glamour and razzmatazz to the series. These people are a brand in themselves in India.
IPL marketing strategy brings a lot of spice through auctioning of franchisees and participating players, cheerleaders, opening ceremony and live concerts. Even the commentators use phrases to attract and please sponsors, making them pay more.

#Into its eighth season now, the IPL extravaganza has grown leaps and bounds. IPL has also seen itself engaged in various controversies of corruption, match fixing and mismanagement. With stakes held so high, IPL season 8 calls for a controversy free season with pure entertainment in the form of cricket; it could be achieved with better administrative efficiency, strict oversight and increasing awareness among the players.

Contributed by Isha Jajodia (class of 2010, IBS Gurgaon)

5 people around MBA College to learn from

Posted on April 14, 2015 by IBS India

MBA generally denotes the ending of a student’s formal education and thus in this time frame of 2 years a person must have the maximum willingness to learn and indulge in observed learning. Out of the conventional methods of learning, interviewing experts and making observations has been credited as a credible source to add to one’s knowledge.

Before I begin to highlight your learning, I would like to take you through a Product Development project which was assigned to our class by our professor to make us learn the 4 P’s of marketing, finance decisions as well as operational efficiency better. In groups of 6, we were to interview a vendor near our campus regarding their product, pricing, budgeting, promotion, placement, consumer behavior, functioning and other questions that would probe us if we were to start a similar business and present a report highlighting the learning. While the task seemed difficult and futile then; now the value of the project can be felt and needs to be shared to invoke learning.

The importance of these 5 people is that these people are already selling in a controlled market; can provide you with exposure to real time challenges at minimal learning costs and are mostly entrepreneurs who unconsciously manage the finance, marketing, operations and human resources for their little ventures. So let us now explore who these 5 different people around your campus are:

Canteen Caterer:

The canteen caterer is an excellent person who can guide you over operations and product placement. Just catch and ask him, how he chooses one product over another; how does he judge whether his customer would like an otherwise highly sold product in other markets; how does he decide the variety of products he wants to keep in his store etc.

If he keeps bakery products, how does he find out which pastry would sell more and what price; how does he plan his offering; how does he charge for the ingredients; does he make the product there or somewhere else; if somewhere else, how does he charge for the transportation? How does he train, recruit and manage the staff? How does he manage the ambience and maintain it? What does it take to manage a team of low skilled, semi skilled and highly skilled people?

If he keeps branded products, ask him about the kind of margins the wholesaler provides for; how often does he reorder; how does he replace a non selling product with a new one which might not sell at all. Each and every question must be attached to a why because it this ‘why’ that will bring in your learning.

Stationery shopkeeper:

One of the busiest shopkeepers in campus is a stationery shopkeeper. This person caters to a wide variety of clients on a day to day basis and runs a monopoly in the campus. Within a limited operational period, he not only sells, takes feedbacks, gets orders and different requirements, makes profits through margins as well as serves the need of the customer.

Ask him, how he markets i.e. displays all his products in a little shop that he runs; how he reacts to complains and feedbacks; how does he arrange for the different orders placed by the customers; how he estimates the offering he has to make; how he finances and plan to expand; how he plans his profits and does that make enough living? How does he obtain products from wholesalers and bargain for margins? Learn it to inculcate it before going to the market yourself!

Nearby Chaat Wala:

Most people love spicy snacks but has anyone ever wondered how does a seller price his products? Ask and understand how the seller charges you for ingredients from his complete pool of ingredients. Further, go in detail to the extent of how does he charge for the oil he uses for frying?

Think from a seller’s point of view and not a consumer’s point of view. Ask him how he maintains hygiene; cater to diverse needs of the customers; dispose of the garbage, estimate the requirements to begin operations as well as the source of his raw materials. These questions will bring to your notice how quality, price, hygiene, ingredients are played with to earn profits in a business with highly customized offering where each customer wants his own kind of a product.

Dhaba Wala / Chai wala:

Outside the institutions, generally many tea sellers or Dhabas are found who compete for the attention of more and more customers every day. What needs to be learnt is the maintenance of quality, financing of preliminary expenditures, handing of operating as well as running costs, abiding with statutory compliances, dealing with various types of customers and legal agents.

It is good for you to understand how they plan their product, make changes in them and make the product run. It is crucial to understand that the recipe for a simple tea differs from one seller to another right from quantity to ingredients and this is what differentiates one seller from another.

Further one can learn how to source products; manage the profits; work with minimum basic inventory as well as budget for raw materials. These people are excellent forecasters of demand and compete with each other using techniques like differential pricing, quality, providing credit facility, promotion, discounts etc. Forecasting will help you learn operations better while marketing tools will make you understand how to bear and adjust the costs of marketing.

The Photocopy Shopkeeper:

A photocopy shopkeeper deals with most of the students. As a result he enjoys a never ending demand for notes and printouts at his shop. Generally such people enjoy monopoly due to limited or few units in the campus or nearby campus. From such shopkeepers you can learn the art of inventory management just like from other shopkeepers. He can also tell you how to deal with immense demand when supply is limited. This person can guide you how to manage your time well and when is the right opportunity for you to take actions. This entrepreneur has a selected few goods and earns through them hence you can learn how to manage with high demand and the least product variety.

This exercise might sound futile and waste to some; but one must understand that to make chocolate, you need to first know the nature of the cocoa plant and grow it! With a hope that you would learn something from these micro-entrepreneurs I leave you the thought that ‘a person doesn’t need to be great if you have to learn from him; you can learn from a bird on a tree or a professor in the classroom; in fact anyone and your learning totally depends upon how much you are willing to learn, striving to learn and apply.’

Contributed by Chayan Jain (Class of 2011-2013, IBS HYDERABAD)

Role of English in MBA

Posted on April 14, 2015 by IBS India

Apart from the latest technology that connects us to the rest of the world, the various combinations of the 26 alphabets also has a vital significance in forming the nexus with the rest of the world. These combinations of 26 alphabets has been bestowed with a single word called “ENGLISH”. Besides being a common language of the world it also has altogether different role to play in our context which is MBA. Let’s focus on English as a tool in the entire journey of MBA.

The first step in MBA is the clearance of the entrance level exams. Usually these exams are Group Discussion and Personal Interview. Both of these exams require you to hash out your views in front of another person and in both the exams the moderator or the interviewer try to uncover your comfortable level with English. In case you goof up here at the very first stage then there goes your chances of entering a B-School in dumps.

Since, majority of students apply for MBA directly after their graduation where not enough opportunities lies in communication part. Hence, a microscopic leniency is shown at this stage by the examiner when it comes to English due to the fact that MBA not only bombards you with the technical aspects of the corporate but also opens you up in front of other people.

Unlike majority of other courses where technicalities of the disciplines are given a top priority, MBA is one such academic course where no matter which stream you opt but communication always gets the apex priority. Seems like the only reason why in the first two semesters we are compelled to go through a brief of every stream and speak on every one of them in forms of various presentation.

IBS, specifically, has Personality Effectiveness Lab and Business Communication classes in first and second semester to eliminate the fear of speaking in front of audiences and also eradicate any problem one has in English.

Not only one has to be a master in verbal English but also one should be able to write and comprehend the written in English accurately. Once you are done with the presentation, you are entitled with a task of penning down your concepts learned in a semester on sheet of paper. If little do you know about the rules of writing in English you might end up with gibberish in your exam answer sheet. You were good at learning your concepts but when it came to express it on a paper you bungled everything. Hence the oral and written English are the two sides of the same coin.

Next comes in a life of a MBA student a red letter day. The placement day is on you, you are well versed with the ins and out of the company which is in your campus to recruit you. You sit in the interview but on the very first question of the interviewer you fumble and at that time this language becomes the only hurdle between you and your success.

Though there remains an informal culture in the organization which has come to pick you and everyone communicates in the language they are comfortable in but for the only reason that you lacked confidence in talking in English at the time of interview, someone else who was not even aware of the business model of the firm got a chance to be in the company only because he or she mixed the 26 alphabets rightly at the right time.

With the bits and bobs of the English language you are in a company now but you are unable to communicate with others in your team because either there is someone in your team from an alien country who does not speak your language or there are some in your team from those Indian states where English or the regional language is far more influential than the mother tongue. This deadlock between you and the other team members could steal some of the stars from the performance review sheet.

Okay! Once an internal employee can understand this entire turmoil of English language with you but then you surely cannot give an excuse of a language to the king of the market, The Customers. When they approach you with any query you just cannot excuse yourself from them because you are not that good in English. Once you could thank your stars because a customer turned out to be an Indian and with the passage of time and a long term relationship you get informal with the customers when it comes to the communication part but you will always be cursing your stars if that is a customer from a foreign land.

Also, It so happens that an organization sends their best employees on a foreign business trip to represent their company to the international client. There arises an opportunity like this in your organization and you lose it in two ways. Firstly, you never get a chance to go on a foreign trip because the only common thread you share with the client overseas is the English language and hence some else who performed less than you gets a chance to be on board with other just on the basis of his fluency and he command on English language. Secondly, even if you get a chance based on your performance you ruin your impression and that of your firm too in front of the international client.

We can see that the English language plays the role of a backbone in MBA and there are only cons of not knowing English. Everyone, opting for MBA, knows the 26 alphabets of English but combining them correctly creates the magic. One can get a hold of this language by continuous reading in the same language, if one cannot sit for long hours for reading then listening to English commentary of any sport is another way of getting familiar with it. What else could be an interesting way of learning this language then watching movies with their subtitles on? If nothing works then professional help is always there in forms of English classes and grammar books.

Just like the basic math i.e. plus, minus, division and multiplication never leaves our lives, similarly in today’s modern world English language never bid farewell from our lives. As Mr. Frank Smith, a contemporary psycholinguist, rightly said: “One Language sets you in a corridor for life. Two languages open every door along the way.”

Contributed by Hasan Ali Gumani (Class of 2014, IBS HYDERABAD)

How to win the commitment of your staff towards excellent customer service?

Posted on April 13, 2015 by IBS India

Gaining the position of a customer service manager in a well settled company is not an easy task at all. It involves years of your sincere devotion and commitment towards your job as well as your company. Consider the scenario when you are promoted to a new position of customer service manager and you find your staff showing poor customer service and the staff being demotivated and more interested in the pay packet than providing an excellent customer service. Adding fuel to fire you find an opposing pay structure which inhibits you from availing performance based incentives and awards! A number of trainings and sessions would have been taken for the demotivated employees with job of every customer service employee defined but nothing showed any positive result in the past. What to do for now?

This is really a challenging position for you but with some really positive approaches you can turn the face of the coin and bring excellence in the customer service from your staff. Check out these positive steps and approaches you need to follow in order to win the commitment of your staff towards excellent customer service.

Create a culture and a core value in your staff:

If the culture inside your staff is right than things like excellent customer service or creating an engaging brand, all these will happen on its own. Create a culture in which every employee works to be better than expected. The customer experience has to be better every day by guiding your team to be the best at what they do.

Customer service should be a part of everyone’s job in your staff and there is no other way to connect with the customer more effectively and efficiently. The philosophy of being better than expected provides the best possible customer experience.

Motivate not only through money but with other factors too:

Improving customer service can be done by developing motivation among the employees. Motivation is achieved not only through monetary policies but also include a variety of non monetary factors like-
Giving recognition from the senior or respected people from the company
Giving a sense that you made a difference
Developing a feeling that the job is of worth and instilling a sense of achievement in employees
Developing a new approach and a full understanding of everything

The motivating factors are not limited to those mentioned above and the different types of employees need different types of motivational factors. There are simply two ways to develop motivation among the employees-

Developing an approach which is standard
Adopting the approach developed by the staff people

The first approach has problems sometimes that there is an assumption that employees need a particular type of motivation factor only. If your approach meets their motivational needs then all is fine. But if you follow a standard approach and your employees need other, then it is really hard to win their commitment towards the customer service excellence. You may achieve a quality but it may be at the expense of your staff’s commitment which is not good at all and the level of customer satisfaction will be poor.

The second type of motivational approach developed by the staff people is really helpful and it enables staff to build the commitment of their own towards customer excellence. The staff can adopt all the things which they need to motivate them and development of those standards will truly help them in getting more committed towards customer service excellence.

Explaining the importance of customer care throughout the organization and spreading the word!

As a customer service manager you need to support the importance of customer care in words as well as your deeds. Take the use of all the opportunities you get to share this message through electronic communications, print and through meetings, special events and other media. Take the opportunities of publishing the success stories of staff and employees who went “beyond and above” to achieve customer service excellence. This approach is very important and will spread the awareness as well as sense of achievement in your staff for customer service.

There have been a number of successful strategies taken up by customer service oriented companies. One big financial company had words “Think like the customer” printed all over the doorways to spread the words for customer empathy. Some companies have messages inlaid in the floor “Customer focus: exceeding the expectations of every customer”. While there are some companies which have customer service messages on the back of ID badges of every employee!

Reinforcing Customer Importance through special events:

Customer appreciation type events are also very helpful for winning the commitment of your staff towards customer excellence. These activities are not just limited to profits. The U.S census bureau organizes customer service week every October and many creative ways to honor the special events are explored. Field offices take part and create customer focused displays which is judged by peers. The customer service week happenings are published in books and distributed to all the staff including customer service success stories submitted by staff and customers.

Take a workshop-based approach:

Staff commitment towards better customer service can be increased by following a workshop-based approach. Take your team offsite for some days and conduct a workshop taking them through a syndicate-based process in which they can do the following things:

Analyze their good or bad experiences of customer service
Understand and define what a good customer service is
Applying all the analysis and definitions to the own organization environment
Asking a customer to present a presentation on “What type of service I expect from you” and followed by Q & A
Get the staff members to produce an action plan which can be followed up on the workshop
In order to make sure that all output from the workshops is conveyed to management and supported by them, appoint a follow up manager. The progress on all actions is also communicated to everyone by the follow up manager

Your staff’s commitment towards better customer service is the foundation of your organizational growth. A happy and motivated staff member will not only give a better customer service but also will spread the sense of satisfaction and motivation to the other peers and management. By adopting all the approaches mentioned above you can definitely find yourself good in the role of a customer service manager and bring a sense of commitment and quality in the working of your staff.

Contributed by Ashish Singh Parihar ( Class of 2008, IBS PUNE )

Art and Architecture of listening

Posted on April 13, 2015 by IBS India

How many times people have lectured you on how well do you listen? Did you know the difference between hearing and listening? How many of us practice active listening? Have you ever imagine, a setup of a call center, they can’t not see the clients who call them, they had to rely on their listening skills to hear and understand what the caller wanted us to do for them. Sometimes due to network problem many of them are not able to understand us, but because of their active listening skill they help us around and crack revenue for the company.

All of us need to be good listeners and more importantly to be an active listener in all aspects of our lives; I believe MBA institute is the platform to imbibe this skill as people from diverse culture background, different intensity, and passion comes together to make it big. We often forget to learn from each other and when we grow older in life we don’t understand what others (spouse, kids, parents, friends, coworkers and leaders) are asking of us.

When we look at our professional lives and career paths, we seldom consider listening as part of the equation. Our performance reviews may touch on presentation skills, but rarely do our leaders rate listening effective-ness. These days business leaders carefully evaluate: What kind of ROI will this project deliver? What are the tradeoffs? But, I rarely hear decision-makers ask: How well are you listening, and to whom?

If we consider some basic facts around listening, the picture gets dimmer. To quote- Last year, a Wall Street Journal article reported that researchers suspect listening skills are in decline due to the multi-tasking distractions of our world. Amazingly, the article’s point of reference is a 1987 study that showed people could recall “only around 10% of what was said in a face-to-face conversation after a brief distraction.” This same article pointed to a more recent study from 2011 that found the “more powerful the listener, the more likely he is to judge or dismiss advice from others.”

From my perspective, these are risky findings. Listening is a critical business skill which from a very early stage of a professional life a MBA student should imbibe. Unfortunately, it’s often perceived as something passive or easily done. However, listening needs to be encouraged practiced and honed; it needs to be built into the architecture of our MBA program as well and I’m glad that professor at IBS works on it. Here are three reasons why everyone should emphasize on their listening skills:

In today’s troublesome business environment, organization weights that we listen in order to understand its intricacies and energetic forces to succeed.

The pace of change is hurrying exponentially. New and emerging technologies are constantly revolutionizing the way we consume things from home energy to personal shopping; from healthcare to security; from savings to security, from privacy to socializing. It is critical for business leaders to understand the implications of our interconnected, digital society. What are our customers’ pain points of today and tomorrow? What is the next big thing? What are its associated benefits; and risks? These answers come from listening carefully across our entire organization and to external sources; which can help individual and organization to grow.

Through effective listening we could connect the dots, spot the trends and understand the signals.

In today’s job setup managers continually seek ways to more efficiently and effectively listen to our surrounding landscape. To expand their operation, e-commerce companies meets daily with venture capitalists to share their ideas and understand the challenges they’re passionate about solving. They speak with customers and colleagues, with other companies, large and small, with investors, incubators and academics. By, engaging across a broad set of relevant audiences, focus group and market research, businesses gets empowered and make decision to notice patterns and understand tomorrow’s trends, potential challenges and new possibilities. This exercise isn’t easy; it re-quires rigor, openness to what you’re hearing and, most importantly, practicing good listening.

Good listening opens organization to new potentials, and transfers them beyond traditional management restraints.

In traditional organizational structures, leaders seldom work across silos. Consequently it’s often the same people delivering updates and recommendations. Now days many companies are taking steps to move away from this approach to a structured pyramid approach. I advise young MBA graduates to join companies, by evaluating how information and in-sights; flows across the organization. Are there better ways you can be listening? Are there different teams you should be working with? Opening yourself up to new ideas can help you discover a new and valuable perspective for your future.

So often we want to feel like we have all the answers. As our world changes more and more dramatically, one reaction is to hold on tighter and tighter to our beliefs. However, if we find the courage to pause and listen, if we open ourselves up to understanding our landscape more deeply, we can make better decisions. Here are the “5 Traits of Good Listening” that I’m focused on cultivating:

Be Present – It’s impossible to be a good listener if you’re thinking about your “to do” list or your next meeting. Focus on hearing what the other person has shared. Try summarizing what you’ve heard to ensure you‘ve absorbed it.
Practice – Practice leaving your inclinations behind. Practice not immediately offering a solution or a suggestion to what you’ve heard. Practice listening, and be comfortable with silence if someone pauses give time. Good listening requires continual practice.
Ask Questions – Cultivate your inner curiosity-ty and seek to learn more. Ask questions – not in a way that shows off your knowledge – but more to really understand what someone is sharing and to demonstrate that you’re interested in what they’re sharing.
Be Open – Embrace a willingness to hear from different and unexpected sources; don’t ignore someone you aren’t familiar with. Determine if you’re discounting something that’s difficult to hear, or selectively editing details – we’re all guilty of this sometimes.
Pause – Take a moment and try listening to your intuition, to your gut. Is there some-thing you’ve picked up on, a signal that you need to pay more attention to, evaluate and understand? Is there something missing? Try listening for what hasn’t been said

Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.

All the best

Contributed by Vaibhav Chandra (Class of 2009, IBS HYDERABAD)

Branding Too Much And Too Many

Posted on April 13, 2015 by IBS India

Branding Too Much And Too Many An Ankita Verma Article by the Author Ankita Verma

Ankita Verma, Class of 2009, IBS Hyderabad

Now doesn’t that sound a little absurd? This is an example of branding gone overboard.

Standing out from a competitive crowd requires bravery, brains and the art of branding. Without one or the other there is very little chance of creating a memorable impression which is also favorable.

There is an old joke popular in marketing circles, which goes like this:-

Cruising through Texas, a tourist asks a cattleman the name of his ranch.

“It’s the Bar Seven, Double-O, Rocking J, Flying M,” said the rancher.

The tourist responded, “Do you have a lot of cattle?”

“Nope’’, he said, “Not too many survive the branding.”

Branding, a noble concept by origin, is habitually (and often unintentionally) abused by companies which mishmash too many brand elements or create excessively complex brand systems. Additionally, we observe brand extensions budding relentlessly in such markets due to technological advances and R&D breakthroughs.

These constantly altering systems of brands can confuse and isolate the customers, ensuing in the decline of brand value.

Overbranding: Branding Too Much

If the product name is mentioned more than once in a sound bite and in the narration, you’ve more than likely overbranded it. Don’t overburden your expert. – Neil Henry

It is all too very easy for a company to pour money into absurd advertising in their pursuit to build higher brand awareness and revenue. The company’s unique value is likely to get diluted in the process, causing loss of brand supporters. Such issues arise because Branding though an essential practice is unfortunately not an exact science.

What is more, overbranding also stems from fear; fear of not getting acknowledged, fear of being ignored, or worse yet, the fear of not being seen at all.

The media reports many incidences of television/movie actors falling into this trap, keenly attending every event and taking up any work just to stay in the limelight.

Bombarding your customer with your brand will, very possibly, result in resentment and negative word-of-mouth. The displeasure that the overexposure of a brand creates, undoes any good-will amassed by it till-date.

The TV audience has been subjected to Interruption Advertising to the extent that it is openly mocked as Irritation Advertising. Is there really a need to obscure the content being voluntarily received with frustrating reminders of the privilege on offer?

Any publicity is good publicity, you say? Perhaps.

But is it really worth it, given the practically guaranteed damage to the image?

Let us avoid that channel with the maddening pop-ups, such brands will soon hear their patrons say.

The key is to have faith in your product and create awareness with focused planning and contained enthusiasm. Communicate too loud and you become an annoyance. We witness this at most hotels, restaurants and malls. With an establishment’s over-zealous attempts at branding, the bathroom alone is duly capable of inducing a case of logo-claustrophobia.

The companies, who do not understand their customers, end up overlooking their needs.

Some luxury brands intentionally underbrand in order to keep the associated mystique intact. This technique, however, cannot always be successfully duplicated by a brand which is still learning to walk and hoping to outrun the more athletic brands. Using the law of scarcity as a branding strategy can backfire if your lack of presence is perceived as snobbery. So precarious is the branding balance!

Over-Branding: Branding Too Many

Psychologists are saying that too much choice doesn’t free us, it numbs us. We cope by opting out, making disinterested decisions. – Graham Button

Today, the customer is over-served and over-whelmed. ‘Consumers are stuffed to the gills with logos’. The market-place is saturated with the abundance of choices available.

An average grocery store carries so many varieties of the same product, that it boggles the mind to select just one. Precious time goes on making yet another trivial choice. Take Sunsilk for example. You get more than a dozen hair-shampoo variants alone. Too many options, where one would suffice, not only produce anxiety but also drag down the quality of life.

We see brands and sub-brands being regularly punched out by companies like Dell and MTV, on the weak support of slight incremental tweaks in the main product.

Retailers may feel more versions of their product will ensure greater sales. That ‘more brands’ equals ‘more profit’.

Yet, it is the opposite that has proved true. Many successful companies have realized that less is indeed more.

When P&G cut their Head and Shoulders portfolio from 25 to 16 products their profits rose by an astounding 10%.

The creativity that a company channels into its processes is far superior to its product portfolio in terms of benefits accrued. Innovation just for the sake of revenue can end up degrading the core brand value instead of strengthening it. Any interest previously acquired wanes quickly when the “New and Improved’’ continue to churn out.

Such overshooting alienates the target audience. What the customers are getting is quantity, when what they really need is quality.

There is frequently a greater focus on the transactional profits which are achieved from purely promotional behavior. Author Frederick Reichheld calls these ‘bad profits’. There should be a consideration on generating ‘good profits’ as well, which create customer loyalty. In good service, lies the answer.

Keeping Branding On Track

Strategists have suggested a few things which can help prevent the branding process from going haywire and corrupting the brand value. They tell the companies to:-

Concentrate on customer’s needs and feedback

Instead of assailing the customers with constant in-your-face communication techniques, give them some credit. Do not treat them as fools. Listen to them. Have a good understanding of their needs. Give them the opportunity to provide feedback. It will almost always prove invaluable.

Keep a small Product Portfolio

In order to make the decision-process and brand perception as uncomplicated as you can for your customers, consider trimming the amount of products and the related overhead costs.

Focus on Quality

Statistically, people are willing to pay a premium for good quality and service. Focusing only on quantity can drive down the quality protocols in a company. Quality in a brand talks and can inspire your customers to spread the word and fashion a loyal following.

Be creative

Your brand must have some unique selling proposition in order for it to appeal to customers. Pushing a product without a compelling characteristic won’t make it truly stand out in the market. An innovative aspect to your product, which is relevant to the customer, is more likely to occupy a larger mind-space.

Offer a Consistent Message

To maximize brand recollection, make an effort to offer the same message (and similar language and imagery) with clarity every time you promote.

Branding is an art but not all marketers are good artists. A well-designed and well-executed plan is vital to shape a well-defined brand. Proper attention has to be paid to strategic planning before embarking down the path of brand promotion. Focusing on the core business process and service and allowing the work to talk for itself is more likely to ensure a sustainable growth in a company’s brand equity.

With the right set of tools and inclination, branding is sure to paint a masterpiece.

Contributed by Ankita Verma (Class of 2009, IBS Hyderabad)

ICFAI Business School Blog

Author Archives: IBS India

Effective use of emotional intelligence in Leadership

“Base Year Change And Its Impact On Future Economy Of Country”

How to remain at top of your career!

A Brief Analysis of Union Budget 2015

Top 5 Case Studies for Indian Management

5 people around MBA College to learn from

Role of English in MBA

How to win the commitment of your staff towards excellent customer service?

Art and Architecture of listening

Branding Too Much And Too Many