On Evolution: Change Happens

It has been around 200 years since the birth of Charles Darwin, and about 150 years since the publication of his and Alfred Wallace’s thoughts on evolution by natural selection. In their honour, let us remind ourselves of the basic theory that all of us learn at school.

(1) Species differ from each other, but individuals within a species also differ from each other quite a bit.

(2) These differences are due to changes to the basic genetic framework of the organism (mutations) which can get passed on to following generations.

(3) The environment keeps changing physically, climatically and biologically.

(4) In the new (changed) environment some of the mutations survive better than others (“natural selection”).

(5) The effect of these changes over several generation results in the evolution of species, and the rise of new species.

The primary reason I am highlighting this theory is because, to my mind, businesses are like living beings. Businesses are conceived, given birth to, they grow, and most of them die after a few years or a few decades. During their life some businesses get married (merged or acquired), and sometimes they give birth to other businesses.

About 2-3 years ago, the business climate seemed predictable and only looking upwards – the biggest challenges seemed to be whether your ambition was bigger than your competitor’s. Many predictions were made about how the large – more “organised” – businesses would quickly kill the small.

However, with much turmoil in the business environment in the last year or so, it is evident now that it is not just the small companies that are vulnerable. The change in the environment is also giving new growth opportunities to the smaller or younger, previously vulnerable, businesses. While some of the larger businesses have died or are in the process of dying, some of the smaller businesses are mutating even more to survive better in the changed surroundings.

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Business Travel and Class Distinctions

Spending policies are being reconsidered by companies, including cutbacks on travel and perks for executives. Some of these cutbacks can create severe dissonance amongst the team.

A good guiding principle is “frugality” (not stinginess). It is a time tested principle and goes long in building and sustaining an organization’s culture and values. What does this translate into in terms of the guidelines for senior management and organizational leaders?

  • Travel as you deem fit for the purpose of that journey – train, bus, car, air-economy, air-business, air-economy and business (for multiple legs) and combinations that make (common, good) sense.
  • Travel in a manner that is sustainable – be conscious of the carbon footprint that it creates and help minimize that.
  • Be aware of global macros and their outlook in future months and quarters. Take a call which is coherent to what you would like to communicate within and outside of the organization.
  • Above all: Lead by example across every sphere as leaders of your organization and community at large.

If you think this only applies to small companies or start-ups, how about some inspiration from a company with over US$ 3 billion in sales and a team of over 8,000 people? NetApp is #1 on Fortune’s list of the “Best Companies to Work For”.

According to Fortune: What makes it so great? Employee enthusiasm for the legendary egalitarian culture helped catapult NetApp to No. 1 after six years on our list. Typical of its down-to-earth management ethos, NetApp early on ditched a travel policy a dozen ­pages long in favor of this maxim: “We are a frugal company. But don’t show up dog-tired to save a few bucks. Use your common sense……………” 

As Fortune states even in these tough times the company has gained market share, hasn’t laid-off people, and has more than $2 billion in cash in hand.

More at – http://money.cnn.com/magazines/fortune/bestcompanies/2009/snapshots/1.html

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Hullabaloo over everything – Part 1

While we write this (10th March 2009), the next weeks would possibly be marked by “newer concerns” about deflation. China has reported deflation the first time since 2002, there are whispers about India heading to it too, soon.

Are these real concerns? NO! There is something called the base effect – inflation is calculated as a percentage increase/decrease over the last period (week, month, quarter or a year) – and the last few years have been unprecedented for record increases in prices of food, energy, commodities. Much of that has been seen as an “opportunity” to make profits in trading them.

The buck stopped (does it not everytime!!) and the world shall witness low inflation and possible deflation over the next 1-2 quarters followed by rising inflation due to rising deficit financing globally. And then possibly stagflation – rising prices and depressed growth. The cycle shall continue…

Sounds scary? Yes, it does.

So what are the choices to make as entrepreneurs/investors/consumers?

We take this as an opportunity to open up discussions/debates/contributions in the coming few weeks and shall be keenly looking forward to your views. Just click on the “Comment” link below and leave us your messages and let the discussion unfold!

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The Art of Business

Possibly one of the most important barriers for a would-be entrepreneur to overcome is the fear that she/he can’t really match up to the reigning titans of business. One way to overcome it is to ask: why do I want to set up and run a business?

If you’re already an entrepreneur, you may have been asked, or may have asked yourself at some point in time the reason or reasons for being in business. Even after the business is up, you may find yourself questioning the motivation to continue.

The answers – depending on who is asked, by whom and at what time – may range from gaining (money, fame, power, security, goodwill, etc. etc.), to giving (employment, security, dignity etc. etc.).

However, all of these are on the surface. And they change.

The underlying motivation, to my mind, is: to give expression to yourself. Just as a painting is to an artist, a piece of music to a composer, a book to an author, business is a method of expressing one’s personality. And just as moods change, expressions change – with the changing expression the surface motivations mentioned above may also grow or decline.

And just as we wouldn’t (or shouldn’t) use a cookie-cutter approach to deciding good art, neither should we use the lowest common denominators of financial or scale metrics alone to judge a business as good. (In fact, look where the cookie-cutters got investors!)

So, here’s to finding your expression!

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Growth in Recession

I’ve just spent a few (grim) days at the National Retail Federation’s conference in New York – the NRF Annual Big Show. (After all that grimness, I hope you’ll pardon my play on words in the title!)

However, the key message from several conversations is that this is an ideal time for the better companies to use this opportunity to take tough decisions, and to create change that is hard to push when the business is doing well.

I think that is sound advice to not just get through these recessionary times, but also to pull far ahead of the competition.

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