“True entrepreneurs don’t start rich”

Stephan Gary Wozniak, Co-founder of Apple Inc., in an exclusive interview with B&E talks about the notable traits of successful entrepreneurs, and how he rates the late Steve Jobs as an entrepreneur-leader

B&E: How do you define “entrepreneurship”, since you were key to creating Apple as a company, and what prime qualities should an entrepreneur possess?

Steve Wozniak (SW): I don’t have a good definition of entrepreneur. I’d go with the popular opinion. It’s usually a young person but could be an older person who is young at heart. It’s a person who wants to start a company and get going on his or her life toward making a lot of money.

B&E: How critical is passion as a success factor for an entrepreneur to succeed?

SW: Some entrepreneurs are motivated by passion to do a particular thing. Others just want any opportunity to have a business of their own. They all want to, at least partly, escape from working for others on this project. Usually entrepreneurship involves creation and engineering. Bright engineers get ideas and become entrepreneurs to bring them to fruit. Often an engineer or scientist creates some sort of working model in their home or garage first.

B&E: And what do you have to say about young graduates who make a mark in the world of entrepreneurship?

SW: These days many graduate from college with entrepreneurship training and they look for ideas or come up with ideas with little or no understanding of what it will take or if it’s possible. They assume that once they get funding for an idea on paper they can find engineering as a resource anywhere in the world. This is the business graduate. The best is when both disciplines, engineering (science) and business, are in the same person.

B&E: How would you rate the late Steve Jobs as an entrepreneur and what were his top qualities (and weakness, if at all) as an entrepreneur and a leader?

SW: Steve was one of the greatest. He didn’t do the engineering but he understood it better than pure business types. He always recognised the importance of it and hired the greatest engineers. I was his key in the early days but he did not make a mistake. In later times it was clear that he understood the importance of all the departments of a large company and insisted on hiring some of the best people in the world in every one of these departments.

B&E: So you say that for Steve Jobs, being around engineers helped him emerge as a successful CEO-leader?

SW: When Steve was young he had a huge spirit to form a company as a way to bring his great ideas to the world. He thought fast and had ideas about everything and he was very outgoing about it. He was around a lot of engineers and knew when gold had struck, with the Apple II.

Read more......

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Indian real estate sector in 2013 and beyond

While the concept of affordable housing is expected to be the real rescuer of Indian real estate sector in 2013 and beyond, its execution still remains a big challenge due to unclear policy framework. Is there a way out?

Even the numbers indicate that “affordable housing” was nothing but a fad. According to a recent research by Lloyds TSB International Global Housing Market Review, “Housing prices in India have witnessed the biggest increase in the world over the last 10 years by a staggering 284%. However, the BSE Realty index has fallen 19% in the last one year and over 55% in the last five years.” As per Mumbai based real estate research firm Liasas Foras, “between Q4 FY2011 and Q4 FY2012, property prices in the National Capital Region (NCR) increased by 33% and in the Mumbai Metropolitan Region (MMR) by 17%. Bangalore and Pune too saw a modest increase of about 8% and 5% respectively during the period. However, interestingly the demand in India’s top six real estate markets - Mumbai, Delhi, Kolkata, Chennai, Pune and Bangalore – has fallen around 40% on an average. This is certainly a situation of low volumes and high prices.

The sector’s prospects too are looking bleak due to a series of interest rate increases since March 2010 affecting demand for real estate, along with rising input costs and mounting debt. Builders blame the rise in construction costs along with tight liquidity for their debt build-up. But the truth is the rising debt levels are more the result of an investor-driven demand. After all, a builder’s cost in constructing a property is not significant. Purchase of the land is actually done with PE investors’ money who are looking for at least 20-30% returns. Since the builder does not want to share his returns with investors, they jack up the prices of property instead. As per a report titled “Capital-driven real estate and its consequences” by Liasas Foras, property prices are raised by as much as 43% to accommodate the interest of the PE investor. Result: End-consumers suffer from unaffordable prices!

Then, there are other issues, too. Take land itself, for instance. It is not easily available and the records are not properly maintained. This makes acquiring land a time consuming, cumbersome and expensive process. “Land should also come with physical infrastructure, such as access to public transport, sewage treatment lines, and water and power supplies. Without these, no project would be saleable,” says Brotin Banerjee, MD & CEO of Tata Housing.

The increase in cost of construction also impacts this segment the most. According to industry estimates, construction costs account for more than 50% of the total price of affordable units, while in the case of luxury projects it is only around 20%. At the customer end, obtaining financing is a key constraint. One main reason for this is that this customer segment is employed largely in the unorganised sector and typically lacks documents that show proof of address, salary and other information that is mandatory for availing loans from the frontline banks.

Considering all this, it’s really tough for a real estate player to provide affordable housing unless and until the government pitches in. Agrees Navin Raheja, Chairman & MD, Raheja Developers Ltd., as he tells B&E, “For affordable housing to soon become reality the government needs to come up with a PPP model, and implement it in letter and spirit.” No doubt, the public-private partnership is a good model to cater to the housing needs at the bottom of the pyramid but not the way it is happening at present. For instance, currently, any builder can approach the government for subsidies in the name of constructing homes for the poor, and while there are stipulations, these are only on paper. The private sector has to be engaged in a manner that results in proper targeting of the housing stock. “You can’t have subsidies and then sell in a non-transparent manner,” say critics.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year

BBA Management Education

“There are too many airlines in India to form a cartel!”

Gordon Bevan, Aviation Expert & VP, UBM Aviation, tells why price-fixing isn’t enough a sign to prove a cartel in progress in the Indian aviation space

B&E: Instead of worrying about cartelisation by airlines in India should a regulator like DGCA or AERA not allow them sufficient time to heal their wounds, whichever way possible?

Gordon Bevan (GB): India must look at what airline competition has produced. Irresponsible market share wars have delivered massive passenger growth, driving down average fares, yet no profits have been made by a majority of India’s airlines. Now uncontrollable external costs are dampening passenger demand. This will hit those airlines that are able to survive low fares through high demand stimulation. Perhaps competition or monopolistic behaviour control needs to be extended to those sectors of industry – like OMCs – that supply the airlines.

B&E: About a month back, former Chief of the erstwhile Air Deccan complained that airlines in India are involved in price fixing and cartelisation, and that the It is quite easy to retell golf club chatter as fact. It is quite another to prove that both cartelisation has been executed in intention and deed, especially in a court of law. Capt. Gopinath’s assertion was that Indian airlines colluded to limit the ‘floor’ on airline ticket pricing. It is entirely possible that airlines would wish to limit the decline of yields and would wish to somehow influence this decline. Whilst this is possibly an aspiration, it is likely to be unenforceable.

B&E: So you don’t think there is a cartel operating?

GB: Cartelisation of an industry requires that all players abide by the informal rules. And there must be a payback. Each of India’s airlines has its own break-even as each airline has a different cost base. Set the floor at Spicejet’s rates and all airlines will lose money, set it at AI’s and everyone will make profits. There are too many airlines in India to conform to a cartel pricing regime.

B&E: In August, the DGCA had observed that the price differential between a FSC like Jet and an LCC like IndiGo is wafer-thin! Isn’t this enough proof of cartelisation?

GB: This gap may be true. It is not proof that cartels exist. It may be the lowest that airlines are prepared to drop their fares to. Wise companies understand their bottomline and know the cost of production. We have experienced the effects of airlines selling below cost in India – clearly a sign that no one was abiding by any commercial sense let alone a price-fixing deal. If cartelisation exists, then it has done a lousy job protecting ailing carriers thus far.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year

BBA Management Education

It's time to get organized

Syria’s disorganized opposition forces cannot make an impact until they stand united to attract international community to a single platform to help them

Syrian opposition activists regularly express disappointment with the level of international support that they receive. Although the last meeting of the so-called “Friends of Syria” (a group of countries that convenes periodically to discuss Syria’s situation outside of the United Nations Security Council) brought more financial aid, the degree of genuine outside commitment to their cause remains questionable.

The US, the EU, Turkey, and most Arab countries agree that Syrian President Bashar al-Assad’s regime is no longer legitimate. They have intensified sanctions against the government, and have provided different kinds of support to opposition groups. Some states have delivered automatic weapons, ammunition, and rocket-propelled grenades. But arms deliveries have dried up, and the rebels’ pleas for anti-aircraft weapons remain unanswered.

Moreover, neither Syria’s neighbors nor Western governments are willing to intervene militarily. Indeed, despite expressions of solidarity, they have refused to establish a protection zone for Syrian civilians along the border of neighboring states, or to impose a no-fly zone for Syrian military aircraft. As a result, Syrian opposition groups believe that they have been left to confront Assad’s brutal regime alone.

But Syrian oppositionists must recognize that the lack of decisive international action is not only the result of Russia and China vetoing any meaningful action in the Security Council, or NATO countries’ unwillingness to enter into another war in the region. In fact, the international community is waiting for Syria’s disorganized opposition to transform itself into a coherent, effective force as much as the opposition is waiting for the international community. This entails forming a common platform that represents all relevant groups, including the Local Coordination Committees, the Syrian Revolution Coordinators Union, and the Free Syrian Army’s military councils.

The Syrian opposition needs to establish an umbrella organization accepted by all, including the de facto civilian and military leaders who have emerged locally over the last year and a half. These groups already share a common goal – to bring down Assad’s regime – and most of them (with a few ultra-militant exceptions) hope to build a peaceful, inclusive, and democratic state.

Influential opposition figures – such as former parliamentarian and political prisoner Riad Seif and the SNC’s former leader, Burhan Ghalioun – have proposed promising strategies for forming such an umbrella organization. For example, a “group of wise persons” who do not seek political positions could oversee the creation of a provisional council that includes all relevant political groups and coalitions, the military councils, the business community, and religious leaders.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Better off 'building tomorrow's enterprise’?

Infosys has disappointed the street with its financials over the last few quarters, and even lost its bellwether status. However, an unperturbed management is banking on much better numbers in the medium to long term with its strategic transformation. Can they pull it off?

As I entered Gate No. 2 of the Infosys headquarters at Electronic City, Bengaluru, I could detect a heightened buzz in the environment, which I am otherwise very familiar with. A number of additional security personnel were combing the area, and no vehicles were being allowed to stop anywhere near the gate; in fact, even visitors were not allowed to stand and wait in the vicinity. Later, I realised that all this was happening because the President of Tajikistan Emomali Rahmon was visiting the campus on that particular day. Visits by heads of state & renowned foreign dignitaries to the Infosys campus is not uncommon, and there is a special area within the campus that has trees planted by these people. Respect was the foremost criteria on which Infosys Chairman N. R. Narayana Murthy built the company and indeed, it continues to be respected for much more than the manner in which it has grown from scratch to a $6.99 billion company in 30 years, and led the industry in absolute profitability for most of them. However, the past few quarters have seen the company miss some of its sheen on the bourses. Investors are particularly peeved with the company’s muted guidance that compares unfavourably to TCS and Cognizant (and to NASSCOM!), while being quite in line with the guidance of Wipro. When you look at the results of the quarter ending June 2012, Infosys posted a revenue of Rs.89.09 billion, a growth by 29.02% yoy and a profit figure of Rs.22.04 billion, a growth by 20.9% yoy. In comparison, TCS posted a revenue of Rs.114.11 billion, a growth by 32.47% yoy and profits of Rs.27.97 billion, a growth by 35.64% yoy. In dollar terms, Cognizant, which overtook Wipro in terms of revenues last year, has even overtaken Infosys with revenue of $1.795 billion as compared to $1.75 billion for the latter. Due to these reasons, TCS has now become the bellwether of the stock market, a position that Infosys held earlier. Moreover, the company’s guidance of around 5% revenue growth for FY 2012-13 has disappointed investors, since NASSCOM has provided a guidance of 10-14% in terms of industry growth.

Infosys maintains that the environment is volatile enough, and there is nothing materially positive to justify a higher guidance for them. Some critics say that the company’s single-minded focus on margins is the reason (making it lose some lucrative deals in a scenario where players are getting too aggressive on price), while some say that the company’s succession plan hasn’t gone well. It’s reluctance to latch on to M&A targets is a debate that certainly wasn’t born yesterday, though the company did manage one acquisition of late (the $350 million acquisition of consulting firm Lodestone) to show that it really is serious about inorganic growth now. To make matters worse, Infosys has delayed increments for its employees, which is all the more disconcerting for company watchers, who feel that this will only lead to an increased attrition of quality manpower.

In an exclusive with B&E, S. D. Shibulal, CEO & MD, Infosys, defends, “People link price and margin directly. Margin is a reflection of the company’s aspirations, philosophy, efficiency in operations, how do you manage, et al.” He asserts that there are as many as ten levers on margins that he can identify, which include things like onsite-offshore ratio, utilisation, pyramid structure and client choices apart from price. Moreover, he asserts that client deals today are strategic, and Infosys doesn’t really walk away from deals just because it has to bring its price points down. However, he also admits that having industry leading margins has remained a long term strategic focus area for Infosys.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

BBA Institute

Reverse innovation/exnovation

All that you wanted to know about the leading principles that drive innovation excellence, from those who created them

While innovation isn’t exactly suited to the short term mentality that affl icts most Indian companies, the impact of innovation on corporate sustainability can hardly be overestimated, as is indicated by numerous studies. Dr.Nam D. Pham, Managing Partner, NDP Consulting, attempted to assess the impact of innovation and IP protection on the US economy and concluded that IP intensive industries “create jobs and spur economic growth as results from high investments in research and development”. They were found to have output and sales that were over twice those of non-IP intensive industries, paid their employees around 60% more; and their R&D spends were around 13 times more than the latter.

Clearly, companies today need to take the innovation challenge head on and meet a variety of challenges right from the product idea to commercialisation to protecting its IP. This cover feature, which is a joint study between the Tuck School of Business (ranked number 1 in the Economist’s ranking of full time MBA programs globally last year), B&E and IIPM Think Tank along with primary research insights from the Indian Council for Market Research (ICMR), presents remarkable insights from global thought leaders on how companies can make innovation a success. Prof. Vijay Govindarajan, Earl C. Daum 1924 Professor of International Business and Founding Director, Tuck’s Center for Global Leadership (who has been ranked 3rd on the Forbes list of “World’s Most Infl uential Business Thinkers, 2011), presents a snapshot of his benchmark research on the phenomenon of Reverse Innovation (a term coined and popularised by him along with his colleague Prof. Chris Trimble, Faculty, Tuck School of Business at Dartmouth). He elaborates on the need for MNCs to start innovating from scratch for emerging markets (which are the new hubs of potential), and then bring these products back to developing and even developed markets; rather than relying too heavily on glocalisation. Prof. Arindam Chaudhuri, Hony. Director, IIPM Think Tank and Editor-in-Chief, Business & Economy, and Prof. A, Sandeep, Group Editorial Director, Planman Media, provide us a glimpse of their rather counter-intuitive, yet immensely relevant philosophy on ‘Exnovation’. They assert that companies, rather than consistently innovating, should instil strong process orientation to ensure maximum impact within the organisation and in the market place beyond for every innovation they do. Looking at the manner in which MNCs are latching on to the Reverse Innovation wave, B&E delves into the various need gaps that these companies are targeting, how they are attempting to commercialise the innovations in new markets and the learnings in that regard for Indian firms.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Mind your language

India’s recent move to ban some Twitter and Facebook accounts to stop hate agenda might be a bark up the wrong tree, but still uses a valid rule

Many would see the Indian government’s recent decision to ban (and later ‘unban’) almost 309 URLs of Facebook, YouTube, Twitter et al in the wake of the unfortunate Assam riots as a blatant ‘violation’ of the freedom of speech ideology. Undoubtedly, the move by the Indian government – which now stands more or less revoked – was nothing but a knee-jerk and shortsighted reaction to contain a rapidly snowballing situation; almost akin to a doctor telling a cancer patient that the best way to cure the disease is to not talk about it to anybody else. Yes, clearly, the Indian government wound itself up trying to first identify which pages were encouraging hate speech, then trying to force foreign based social media sites to block these identified pages, then trying to justify the move to critical commentators and media.

Criticise the government as one may – for not understanding the real reason for riots – but what is quite clear in the midst of all this brouhaha is that the government was legally right in moving against various hate promoting sites. These steps by the government have invited huge criticism from every section of society; but the very intention of the government seems quite clear and unquestionable. India has never witnessed a situation where social media is being misused in such a condemnable manner. Regular hate speech can have a long term effect on sections of the society that are on the web and create negativity in their subconscious mind.

Undoubtedly, the government has taken these steps a bit late in the day, but it has the legal authority and duty to censor content, which might be detrimental to communal harmony. Not only India; the governments of many nations like United States of America, Australia and England have taken similar actions in the past to control violent and hate oriented speech on the web. In US, the House of Representatives recently introduced the “Rogue Websites” Bill that has been supported by many in the house, even though it would force the Service Providers to create a list of banned websites and prevent users of those websites from accessing them. This bill is a version of the Theft of Intellectual Property Act or Protect IP Act introduced in the US Senate earlier.

Minister of State for Communications and IT Sachin Pilot recently said, “India has been pushing for global internet governance at the level of the UN so that control of social media would rest in the hands of UN and its member nations.” But currently, only China supports India on this. In fact, the UN Human Rights Council in Geneva passed its first resolution on Internet freedom with a message for all nations to support individual and human rights online in July. Undoubtedly, freedom of expression is critical, but as is the case with the hate messages spread after the Assam riots, a line has to be drawn somewhere.

Cyber security has remained an area of huge concern for India. Mobiles have penetrated wide and deep in the Indian market, and the rapid rise of smartphones in particular indicates how spreading the right or wrong message has become so much easier. A mobile analytics research firm Flurry has concluded that smartphone adoption today is ten times faster as compared to the PC era in the 1980s. India saw a 171% growth in the number of active smartphone devices for the year ending July 2012 according to the Flurry report. As per eMarketer, social media globally is expected to reach 1.5 billion users in 2012 (1.2 billion in 2011). India is expected to see the fastest growth of51.7% yoy. This underscores the need for these sites to control their content and the government to crack the whip when necessary. The argument obviously gets turned on its head if the government misuses its rights to clamp down legitimate criticism of its own policies/agenda at any time.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face