Winning by Design

Sounds very clichéd and over-used? There are folks who swear by this term and those who question its relevance in today’s rapidly changing world. The average shelf-life of companies is on the decline. As a result, focus has shifted towards higher speed in execution across the board – from strategic planning to product launch to Brand Building to Fulfillment to Growth & Profitability. Along the way, companies are having to make more and more complex decisions in less time and backed by less data. This is the world that we live in. Interestingly, there is enough scientific literature to prove that the human brain get exhausted after making complex decisions. We are more likely to make decisions based on intuition and cognitive bias than logic and data which by nature is time-consuming. The opportunists tend to follow the former while the purists tend to lean towards the latter!!!

Is Design still relevant?

The case for design is very strong. Classic Examples are the plethora of companies that have succeeded through sheer dint of design. I like to think of opportunity-led thinking being complementary to a design-based approach. Here’s how

Design Opportunistic
Step Change in Value for all Stakeholders Capture incremental value at every point
Critical for complex problem solving & avoid pitfalls in longer run (Type-1 decisions) Help remove obvious bottlenecks and win in shorter run (Type-2 decisions)
More applicable in core areas – Technology, Product, Process, People Applies in softer areas – Promotion, Partnerships, Pricing
Creates a significant competitive wedge and sustainability over a longer duration Value & Differentiation – Both are marginal & can be erased quickly

In the longer run, it is design that generates value and drives a differentiation for a firm. This is amply exemplified by the best firms in business – Apple, Google, Salesforce, Baidu, Netflix, Airbnb, Amazon, Alibaba, TripAdvisor, Zapier, DropBox to name a few.

The Design DNA

To win by design, companies need to operate with what I would like to call a “Design DNA” – a fundamental design-led approach towards solving problems, building products, developing process, delighting customers and in the process, creating sustainability in business. The design DNA guides everybody in their choices  – Choice of Products, Markets, Strategies, Business Models, Processes and Brand (Positioning & Communication)

In particular, I wish to call out 3 essential ingredients critical to the design DNA

  1. Clarity in Purpose – As broad as it sounds, Purpose is defined by a strong clarity in thought on what a business seeks to achieve. It answers fundamental (and mostly uncomfortable questions) around a business’ existence – also the part that needs constant evaluation to validate core assumptions. Have borrowed some of these principles from a popular book on multisided platform economics
    • What problem are we trying to solve? How big is the problem and who benefits from solving it?
    • Does our company’s offering solve the problem and do it better than others?
    • How hard is initial adoption and do we have a plan to achieve critical mass?
    • Do we need to rely on partners in the ecosystem to achieve initial adoption? If yes, are we capable of making necessary investments & deal with associated risks to lock in & scale through partners?
    • Do the prices necessary for adoption and growth enable us to make more money?                     

                                                                                                                                    

  2. ‘User First, Product Second’ – This is the brutal reality of our times. Unless you have a breakthrough product like a Tesla or an iPhone, most firms will fall in this category. Once the base value (which is addressing the core problem) is captured, products should be designed to delight users – nothing short of it. If its only an incremental improvement over substitutes, the value will not just be incremental but will be eroded very quickly. With the explosion of web and mobile, users are inclined to window shop for products atleast for the first time. Users are waiting to be delighted for aspects beyond attractive pricing – Features, Ease of Navigation, Utility, Ease of Payment to name a few. Users are expecting a valuable yet premium experience for them to migrate from their existing provider. Once they get hooked onto a platform, the next player is considered only in cases where the base value is not met. 

     

  3. Making Scalable Tradeoffs – This is part of the “ignition phase” of a company – The time when many tradeoffs are made to achieve speed of execution. Now tradeoffs are inevitable but a scalable tradeoff is one that can be seamlessly scaled going forward. For example, customer support in an internet business. This is usually driven by being agile in responding to customers and managing customer escalations on the go. While this solves the problem, inherently, it is not scalable as it is usually people driven. A scalable tradeoff in this scenario will look like this – Document & communicate processes for service delivery and fulfillment and cascade it throughout the organization. In due course, these manual processes get codified into automated systems to track customer journey and product usage, allowing human intervention only to detect & address gaps in servicing the customer. Another tradeoff happens in go-to-market – While it is ideal for every single user to buy our product, it is humanly impossible to reach & service every customer (either directly or through partners). This implies gearing organizational resources to tap your high priority segments even it means losing out on potential business from low value and non-scalable customer segments. While most of these trade-offs are generally reversible, there is a danger of less efficient solutions becoming part of organizational and people DNA as business grows.

So what does it mean for us?

The design rules apply more so in the Indian context where the average customer generally expects everything for free and is willing to switch if the platform or product does not meet their expectations. This is clinically achieved by the likes of Airbnb, Uber, Amazon as compared to their local competition. What these firms may have lacked in local context is more than made up in their design. Sure, they have deeper pockets than their Indian counterparts but their constant endeavour to rule by design separates them from the rest. After the great Indian startup meltdown, it is heartening to see some startups playing by these design rules  – SwiggyCoverfox, Razor Pay – to win in the market. We can expect lots more to follow suit.

Creative Leadership

Over the last 10 years, I have worked across a variety of organizations – from a large International MNC in a steady state industry to a fledgling startup in the Fintech space. The goal of every organization is to maximize profits for its stakeholders. While the pace of change varies with industry, it’s intriguing to look at definite patterns that make certain industries and organizations more suited to disruption than others. I would like to call out Creative Leadership as a key disrupting factor.

In today’s era, every wannabe graduate wants to start the next big venture or be his own boss. For those who join traditional large organizations, the primary goal is to achieve some stability before they take the plunge. While not all may take the plunge, the dream certainly exists. It begins with an idea that can be converted into a product and is marketable in some ways. Now since the golden opportunity is so short-lived, people scramble to make the most of it which has spawned over 4000 startups in India in the last few years. A few of them have achieved unprecedented success while others had a much short-lived tenure. While the media has documented several reasons for the failure of startups from building the wrong product to rapid capital burn, I choose to focus on Creative Leadership as a critical ingredient for success in today’s business environment.

What does Creative Leadership mean? By no means, it precludes building a great product or operating as a monopoly or being reckless in burning cash. It means willing to challenge the norms at every step of your journey. It means imagining the world as it has never been perceived before and building it. It means innovating at a pace that leaves your so called competitors way behind (Case in point – Does anyone even consider Bing or Yahoo to be a competitor to Google search). While many would argue that creativity is an essential ingredient for all, I choose to focus on Leadership as in most businesses, ideation and strategy are the preserve of a few chosen people at the top. So it’s imperative that creativity prospers in this select group first.

Many times, the executives are wary of adopting creativity in leadership. This is particularly true in the Indian context where startups are constantly under the pressure of raising funds or meeting board targets or reducing cash burn. The reality is that creativity does not place any demand on any of this. All it demands is to juxtapose rational business thinking with imagination. The former is very easy to achieve as it’s mostly driven by numbers. The latter isn’t very difficult either but it does not come naturally given the snackable environment we live in. It’s much easier to crunch some numbers and decide on a certain course of action than stepping back and reason the actual problem we are trying to solve.

Recently, I have been reading Creative Confidence where the authors make a very valid argument on how business can grow only when the product design meets all 3 requirements – business viability, technical feasibility and people centricity. My sense is all the 3 requirements have a creative element to decipher. Business viability largely depends on the market where the intended product is to sell – Is it a new market or mere substitution of an existing market? Most executives tend to think their product is so radically innovative that it’s creating a new market (fallacy of positive attribution) whereas it’s merely shifting spends from an already established market. This primarily stems from the core competition that executives use to benchmark against. Does an online business in fashion compete with traditional fashion & luxury stores and other similar online fashion businesses or do they actually compete with other online businesses in food, travel, payments and the lot? The reality is it will be a bit of both. Remember we only have 24 hours in a day and fixed (although growing) amount in our wallet – That won’t change.

Technical feasibility boils down to the development of the product itself. If it is a software product, is it built to scale?  Can it be truly made modular so that organizations outside your own can use your platform to develop new products?  There was a time when we all thought that an engineer’s job is to get shit done (which it still is) but the era has dawned where the creative engineers (ones who keeps the ecosystem in mind) will begin to outdo the traditionalists. One area worth obsessing for the executives is if the so-called product is genuinely a product without any service wrapper or one that needs multiple wrappers to deliver value effectively. It’s not uncommon to see many next gen firms launching products with galore only to realize that the product really cannot survive in the market without extensive servicing support for its customers. No wonder companies are investing in automating their service operations to ensure their core product is able to survive and grow.

Finally, People centricity is an area that is more likely to get compromised once executives plough through the first two requirements. What makes a certain product appeal  to users – How much friction does it reduce for those who use the product? Which features really help to reduce this friction? Are these features part of version 1 or parked until later?  So if the product is designed to ensure all its features function properly but misses the larger point of reducing friction for its users, it will lose its value. It may have little to do with feature or functionality changes but more to do with actually governing the users’ product experience. Now, an online business can do little if the telco network doesn’t load the website fast enough but users will drop off for that very reason. For an online business delivering products and services remotely, it becomes critical to build trust with users at the point of consumption. We are entering an era where people trust the words of those who have used the product or their own experience. This is particularly true for very complex digital products. Push marketing can help place your product in front of the masses but scaling it will depend a lot on your users. It requires executives to think imaginatively about their product and brand – What do we really stand for and care for? Are we trying to outdo or worse match the nearest competitor in their claim or are we serving unmatched experiences to our users?

These are very exciting times indeed with so many young leaders entering the market from very prestigious backgrounds leading companies that will drive the future of India. With the government willing to put its weight behind Startup India, the stage is set for the next generation of entrepreneurs and young leaders to make their mark. They have the opportunity to create a huge impact in our nation, create jobs and lead thousands of young people in the future. There could have never been a better time to inspire and invoke Creative Leadership.

The Freedom Revolution – Part II

It has been nearly 70 years since we became free from British Raj. We have progressed ahead since then – The Green revolution, economic liberalization and more recently, the technological wave that is markedly changing the lives of every single India from the white collared professional to the rural farmer. Yes, India with its 1 billion population is all set to live out the economic downturn that has hit the world – It is among the last frontiers left for western economies to participate in and fuelling their own growth

Over the last few years, the key question that has vexed me – What do Indians really want? It must be sounding naive as there is no straight or one answer to this question. But nevertheless, this is the very question whose answer all of us should be seeking and working towards – Politicians, bureaucrats, Media, corporates, start-ups, industrialists, farmers and everyone else. The real answers lay hidden not in political speeches or media uprisings about inconsequential issues but in coffee chats with colleagues or visiting the rural hinterland and talking to the villager about the real issues faced by them. We should aim to get honest answers backed by facts keeping aside political idealogies or media stories. After many discussions, I have been able to describe this in few words – A Valued and Happy Life. Sounds too obvious, na? Yeah..

Continue reading “The Freedom Revolution – Part II”

Live the Change

Our country witnessed two historic events over last year – (1) The overwhelming victory of BJP in the Parliament and (2) almost exclusive mandate for AAP to lead Delhi for 5 years. This is clearly a sign of people want to place their faith and belief in people who can deliver. Hence, my open letter to Arvind Kejriwal

———————————————————————————————————————————————————-

Arvind,

I have a lot of respect and regard for you. I really admire your guts to come and form a political party to deliver change for the people of this country. Your crusade against corruption is impeccable to say the least. To me, AAP coming to power in Delhi is probably the single most important event since our freedom from British – it is a clear sign of change from the two old parties which have long since outlived their legacy and more importantly, people’s faith and trust. It also marks a remarkable shift in the mindset of youth towards politics. Despite the hiccups along the way, I wish you the very best to govern and deliver for change. Having said that, I wish to provide you few humble suggestions that you should focus amidst all the media and political distractions

1) Abandon traditional political philosophies if you sincerely wish to drive change in your language and minds. Words like “Party”, “High Command”, “Committee” etc. which are frequently used by your colleagues in the media demonstrate a 19th century attitude to solve the problems of the 21st century. This country has 70% of people under the age of 35 yrs – they have different value systems, attitude, ambition, aspiration. These are the people who are watching your colleagues on TV. Respect and embrace that. Else AAP is in danger of becoming another Congress or BJP in 10 years from now

2) Focus on delivering a better standard of living to the people of this country as they deserve it as much as the citizens in any developed country. We deserve better roads, better education, better transportation, better housing, 24×7 power, better jobs, better broadband connectivity, more green areas, better lifespaces and a better lifestyle irrespective of which strata of society we belong to. Countries like Japan were ravaged by a nuclear bomb during the 2nd world war while South Korea got freedom as late as 1945. And look at where they are today – this could not have happened if the govt did not believe its citizens deserved the best standard of living. The minimum standard of living in even the best cities in India leaves a lot to be desired – forget about rural areas. South Korea has ~50 mn population and they have infrastructure that can service atleast 3-4x that population. India’s infrastructure is not enough to provide a decent standard of living to 10% of India’s population. We need to build a 120 feet road instead of a 30 feet road. Visit other countries to understand how nuclear power can be harnessed in a safe and cost-efficient manner to generate electricity rather than abandoning it altogether and allowing our citizens to live in darkness. A lot of social evils (caste, religion, gender based) & citizen apathy towards state can be alleviated if the government can just consistently focus on this one problem – without political distraction and otherwise.

3) Continue your focus on eradicating corruption – Cost of living in India is now comparable to developed markets primarily due to the cost of corruption. Corruption is not simply about taking bribes but also about making bad economic decisions which can impact the lives of millions of people. This needs to follow a scientific & professional approach – fact based, transparent and open to criticism / validation. Somewhere, the leaders of the country wish the country continues to remain “poor” & “divided” so that they can always play the role of the messiah. By eradicating corruption, automatically the governance of the country is transferred from the hands of the politicians into the hands of the Aam aadmi – this will also mean politicians can focus on developing this country rather than waste time with meaningless discussions in the House.

4) Focus on valuable job creation across the board. Only when household income is impacted in any meaningful manner can we expect to bring about change. Corruption drives price higher and takes people below the poverty line – as much as valuable job creation moves people out of it. Let every job command the right price in the market so that quality of service improves across the board. The people of India deserve better quality of service – from education, healthcare, power – even it means it has to come at a higher price. A highway should never have to be dug again!! Subsidies cannot solve problems in the long run – Only improvement in productivity and ensuring the right quality of service (delivered at the right price) can ensure this. If this requires privatization, so be it – people have families to feed and take care of. Honestly, I still think government can bridge a huge gap here before private sector is onboarded

Please treat anything else as a distraction – You have only 5 years in power. Please do not get caught in political and bureaucratic wrangles. Nobody will remember how many morchas & rallies you held. This is the time to deliver so make it count. Make the most of it by impacting the lives of people. People will remember you only and only for that – If you achieve that, AAP won’t need to canvas for another election.

Thanking you,

Best Regards,

Arvind Shastry

———————————————————————————————————————————————————

Of Friendship

Returning back to Bangalore after completing the formalities of one of most difficult decisions in my life. It did not seem as difficult now as it seemed few months back.  But in my heart, I know it was the right decision to make. A lot of people advised me – Marriages are meant to be an adjustment, compromise between two individuals. The love that burns initially dies down after some time and partners learn to adjust with each other. A few are fortunate to find their partners complementing them very well. But what people tell me – 99% of marriages are otherwise. And they wanted me to continue with that reality of life instead of wishing for something more beautiful. After a long time, I decided to live for happiness instead of for society. Sometimes, in life, we just need to reverse some bad decisions to give ourselves an opportunity to live again.

Continue reading “Of Friendship”

Rock On!!

Good time to restart blogging. Have been waiting for a long time to do this but sometimes it was the lack of ideas but mostly the lack of inclination that held me back. Ultimately, I found the inspiration to write again while watching a rerun of “Rock On” – sort of a cult movie..

Ten Years ago, I was in IIT, figuring on what to do in life. I was equally vociferous about my opinions on various issues – everything from secularism to ragging to college reservation to Bomb Blasts – on various discussion forums….I honestly don’t know and probably care less if I still hold onto those opinions. But it demonstrated an sense of passion for what went around me. I was immensely inspired to serve the nation and felt a responsibility to do so studying in the most premier college in the country. When I look back it, I feel proud of myself…

Here, I got in touch with few people who were equally driven by the fire like I was. It was the time when a few movies like Swades and Rang De Basanti awakened the entire nation. There was a sense of unity and aspiration among people like never before – an air of enthusiasm and optimism. It was just fantastic to exchange your ideas and passion with friends who shared the same enthusiasm as you. Still remember watching the first day show of RDB with few such friends…Honestly, I am not in touch with most of them but after such a long, I feel very happy to have such fond memories. Three such friends – PS, AS and NS – left an indelible mark on me. Now that I mention their initials, I finally realize they all shared the same last initial as mine!! 🙂

We came together to be part of an elite club – TeamSwades – a mission for change. Driving change in educational system was our common purpose as we all believed that the current system has its inadequacies and did not prepare children to pursue their interests. Instead, we ended up creating a bunch of engineers and MBAs who probably never wanted to become one…I still am amazed by this coincidence – it took a movie discussion forum and an All-India discussion event at Reliance Web World that brought us together.

PS and AS were from the same city so it was easier to meet them – infact they attended a special screening of Swades that I organized at IIT Bombay. I am simply amazed by their extent of passion – PS is extremely passionate about movies and how India needs a sustainable future using green energy. AS is spearheading a movement to drive leadership among youth through a series of social programs. He has been doing it for the last 4 years but I have never seen him lose a drop of enthusiasm. My meeting with NS happened a year later – It was at my convocation at IITB. We had become very good friends and I was simply blown away by the passion this girl had. From covering news beats for TOI or working for a youth magazine to campaigning for BJP, she has done everything. She whole-heartedly participated in anti-reservation protests which rocked the nation nearly 10 yrs back.

Honestly, compared to these people, I had done very little – But I was happy to be the force that brought us all together. It’s hard that 4 strangers could come together driven a common sense of purpose and become good friends who could share, discuss, talk and dream like no one else….

The thought came back to me when I saw “Magik” perform at Rock On after 10 years of separation. Today, PS is working his way through a corporate career. AS derives a sense of fulfillment through his work but is finding hard to reconnect. NS is married and happily settled but separated from the rest of the group. As for me, I am picking up pieces of my life which have come apart over the last year.I know that Magik happens when the team comes together but like KD, there has to be someone who can bring the gang together. It’s this incredible and powerful thought which provoked me to write this. Honestly, I just feel so energetic and I am sure this energy will recycle through me again and again. After all, success is nothing but moving from one failure to another without loss of enthusiasm…

I know this is the start of a long & difficult yet beautiful journey. Look forward to it. It’s time to feel proud again!!

Lesson in Leadership

Although my interest in cricket has significantly declined since the advent of T20 cricket, the events of the last few days prompted me to sit up & take notice. Nothing new actually happened. It was all circa 1999 where Azhar, Prabhakar and others were caught in match fixing and banned for life by the Board. And to add to it, Indian cricket was going through its worst phase in terms of performance – losing 3-0 to Australia in Australia followed by a test series loss to South Africa at home in 2000. Heroes had fallen, a new team was under formation and cricket fans were gutted to say the least..

In early 2001, the average cricket fan was losing patience. India lost the Mumbai test to Australia by 10 wickets and it was hard to see how this team could even draw let alone win against arguably the best Australian side to have ever played the game. It seemed that way till day 2 of the Kolkata test by when Indian cricket’s obituaries were being written in the media. What was to happen – no one could have every imagined….

I always felt Indian cricket was in safe hands as long as the fab four – Sachin, Sourav, Rahul & Laxman – played in the squad, not to mention the legendary Anil Kumble. However, as always, only one of these legends stood tall at a time when Indian cricket is in crisis – Rahul Sharad Dravid. As captain of the Rajasthan Royals in IPL 2013, Rahul once again exemplified why he is the leader than Dhoni or Sachin or Gavaskar could never be. As his players got arrested for all the wrong reasons, Rahul stood up not just to media but also to the people of this country to express his hurt and disappointment. Throughout his career, Rahul hasn’t just been an accomplished cricketer but also a very honourable gentleman. His biography, his famous MCC lecture and articles published on him all highlight his love and respect for the game. I saw Indian cricket’s fortunes change when Rahul Dravid played for India..

http://www.youtube.com/watch?v=20o6n2nP9Pc

On the other hand, it was reproachable to see the silence of Dhoni as the India team embarked on its journey to England for the Champions Trophy. The grin on his face smacks of scant respect for Indian cricket let alone the Indian cricket fan.

http://www.youtube.com/watch?v=r71FOL2DPcs

His post-match comments after India suffered whitewashes against England & Australia away followed by the test series loss to England @ home proved how money has come to dominate this beautiful game. With the powers-that-be colluding at the top, it’s hard to see how the nexus can be broken. And the only good that can happen to Indian cricket now is for India to lose a few series & for sponsors to back out. It seems unlikely but I do hope we will see a leader like Dravid emerge at the end of this dark phase for Indian cricket..