Do friends make good business partners?

When people want to be entrepreneurs, they look at friends or buddies to be their business partners. They think that they could hit off well in business too. All is hunky dory in the initial months but the relationship over time breaks and the start-up turns into a big failure. Many of them fail in the first year itself.

Have we ever wondered the friendship that was nurtured over many years suddenly becomes acrimonious?

Let us look at a few reasons that we commonly observe in partnership business failures:

1. The aspiring entrepreneurs never ask these questions – what value my friend brings in? How it is going to help achieve my vision? If the value the friend brings in is substantial, then the focus needs to be on how the inter-personal relations are to be dealt as they move forward so that the close friends become successful business partners too? Never assume that they will not be any issues between friends.

2. The role clarity is never defined for the friends turned into business partners. A start-up needs to have people who are good at matters related to technology, finance and marketing. It so happens that either all of them are good at only one aspect or on all the the aspects. But a clear responsibility matrix has to be in place at the very start of the business. An overlap of responsibilities hinders the decision making process. The team that is working under them gets confused with more than one direction to execute tasks.

3. Vision setting, policy formation and issue resolution must have alternate views to choose the right one for the start-up. Friends tend to carry the personal differences deep into the venture that ultimately become a huge issue to be resolved. They start questioning their loyalty to each other due to their alternate views on matters.

4. The ownership pattern determines the hierarchy of the enterprise for the regulators and the employees. They don’t see it as a major issue in the beginning but over the years it becomes a thorn in their relationship and it becomes a question of who is No.1 or No.2 etc. Cracks start to develop at this stage and that’s the beginning of the slide of the business.

5. Every partner has a need for a remuneration that befits the experience, social status, family size and life style. If they are to be factored in a start-up then the business is on the wrong footing. These are never considered in an equally funded partnership that is founded solely on expertise of each one of them and the remuneration has to be the same, at least in the initial years.

6. The involvement other family members is strictly a No-Go, unless that family member is being hired as a paid employee based on the job skills. A family member having no ownership and also is not an employee should not be allowed to run or help the business. There needs to be a formal arrangement that gets respect from everyone in the organisation.

We have seen some start-ups turning into a huge successes in the last few decades and they are the shining examples of entrepreneurship to every aspiring entrepreneur.

A Good Business Plan gets the investors

Entrepreneurs have brilliant ideas that need to translate into successful ventures. but not all of them turn into successful businessmen. Many of them fail to get the required funds even to kick start their businesses for the simple reason that the business plans don’t speak for them. The depth of the plans don’t convince the investors as they think the plans are not unique or they do not take care of market corrections. They don’t detail the risks to the business due to shift in technology, local laws, regulations, macro – micro environmental factors and how to mitigate them.

A Business Plan is an internal document of an enterprise and it does undergo changes to reflect the change in strategy to achieve the top / bottom lines and customer acquisition. It is not to be shared with the larger entrepreneurial community but the founders of successful organisations have articulated their success formula in public. These have immensely benefited budding entrepreneurs to help redefining their business plans.

The purpose of a business plan is not only to raise funds but the essence of it is focussed on attracting customers, partners and key people to the organisation. The investors know that plans do change but they are more interested in how the founders have thought through and foreseen the risks and included the mitigating measures. Their unstinted commitment to that plan would comfort them to stay invested in the ventures.

There are many components in a business plan. Some of the important aspects are: – the mission and vision of the organisation – details of the product or service on offer. – the competitors and their offerings. – the differentiators of the product or service when compared with that of competitors. – the customer segments that is going to buy the product or service. – How do we reach the market? – what is the structure of the marketing organisation? – what is the pricing and cost structure of the product? – what would be the cash flow for the first 3 years? – what is the capital required – Own investments Vs external investments? – the break even point – year & month? – the staffing plan – the anticipated Organisational risks, how to mitigate them, work around plan ……….

Every point has to be written with details and the business plan needs to be a word document that runs into pages depending on how elaborate the promoters are able to articulate. A power point presentation will never work for a Business plan. Anybody who joins the leadership team should be able to get a complete understanding of the business by reading that document. Over the first few quarters or years, the business may run into rough weathers due to unforeseen road blocks and the plan would need further iterations for course correction and execution.

In short, a good business plan not only gets the funds but a good document to review at periodical intervals to ascertain how the business stays focussed on the growth of the enterprise.

What bananas can tell us about supply chains | MIT Sloan

How complex it is to move the bananas to the stores in the least possible time and least cost ?

A seemingly inconsequential logistics problem is indeed a complex supply chain example.

Interesting read 👏

In a new book, MIT professor Yossi Sheffi examines supply chain complexity, artificial intelligence, and the future of work.
— Read on mitsloan.mit.edu/ideas-made-to-matter/what-bananas-can-tell-us-about-supply-chains

Continuos Learning for a professional

The need for continuous learning in an on-going job or career stems out of the fact that additional degrees or diplomas would stand good in job promotions. A working Executive MBA is today considered a must for those aspiring to be a VP or GM or Head of a business unit.

If you were a CEO or MD, would you hire a person who had done a similar MBA as a full time student and had experience using that knowledge to good use in a previous company or promote a team member who did an Executive MBA? Mostly the first option would be the choice. An outside candidate is expected to bring in some fresh ideas that resulted in success as compared to an insider who is constrained by organization’s operational limitations and hierarchy. It is a challenge for the insider to wriggle out of them and prove himself or herself.

An on-premise management degree is a serious business ( if done in a good university) with exposure to a no.of real time case analyses and mock decision making exercises alongwith stiff competition from peer students, make a candidate better suited for a top job than an insider.

Additional degrees or qualifications do help the insider to go up a notch or two in hierarchy but not right upto the top. Some organisations want the insiders to be made ready for a top role and gets them to be guided / trained by an experienced coach rather than hiring an outsider at high cost. It is somewhat ok to groom a person in this method to encourage inside talent,but the art of right decision making cannot be coached by an expert as he or she cannot be privy to the organisation’s ground realities and tactics. A coach at best can outline the options that lead to the right decision and it is upto the promising leader to make that call. Also the coach offers insights in management decision making process or leadership grooming based on his or her own experience ( either in the same industry or in a different industry) and that is done over a 4-6 month conversational exchange. There is no doubt this coaching exercise makes the insider open the eyes to the realms management methods and improved personal attributes.

If you intend staying in the same job, augmenting your skills is vital to keep your mind engaged with new information. But hoping that it will leap frog you in the corporate ladder of your organisation in the short time then you may have to face disappointment. If getting an additional degree helps you to land on a better job, then go for it.

What is your experience? Feel free to share your views and thoughts 😊

#management #learning #coaching

Are you a leader or a coach or a mentor?

A Leader sets up a vision and leads a team to achieve it. Not everyone matches his / her speed.

A Coach understands a person’s strength and channels it to deliver the objective. He lets you perform on the stage by not being with you.

A Mentor provides valuable inputs at intervals in a person’s journey to realise his or her true potential. He never travels with you but is a lifelong companion.

Choose one or all the three based on your purpose of engagement. If you follow a Guru, don’t bother about choosing one, for he leads you on the right path, helps you if you are struck at a place, he hones your skills and he is a life time companion.

Work Ethics and Personal Ethics – Are they different ?

I don’t think work ethics and personal ethics are different. The way we organise our personal lives is no different than how we do our jobs at the work place and at the public place.

It is a culmination of values that had been told or taught to us in our childhood and adolescence. Moral values and ethical practices are so important that we must pass them onto the younger generation to turn them into responsible adults and citizens. There are plenty of ways to spoil the young minds through cinema, social media but there are only a few ways this could be done right.

This moral education is missing in our school curriculum and teachers too don’t have time to impart the children these values.

A responsible society needs to create avenues of educating adolescents through value educating lectures or debates. This is where the role of social organisations become important to take up the mantle to train young minds.

Wish more people like us ( parent, teacher, educational administrator, social worker and Psychologist) are prepared to contribute to this yeoman service of creating better citizens for tomorrow.

#education #valueeducation # #ethics

Poverty is a creation of politics

More people are getting into murky politics because it is the best way of making huge money irrespective of what you had studied or who your ancestors were. We have seen,for generations, politicians were richer than entrepreneurs and the trend is growing shamelessly unabated.

Every government says it is committed to wean away money from politics but the politicians manage to clandestinely work with government machinery and law enforcement that are supposed to uphold law and justice.

A recent post in this website said there is poverty when politicians are getting richer day by day than industrialists and entrepreneurs. How true this is!

We fancy jobs in governments and are prepared to spend to make our way through the gutters of political boundaries that are controlled by politicians. Agreed there are a few saints in politics but their voices are stifled by the goons that serve the masters.

We spend in thousands and lakhs of rupees to get our work done as ‘ speed money’ and are also one of the root causes as partners in crime in spreading the disease in our community.

#poverty #politics #lawenforcement

Does strategy need to be short sighted or far sighted?

A leader always has this question to the board of directors and it varies with people, business and external environment.

Many decades back, the purpose of a business was to serve the people with a good product or service encompassing the highly valued ethical business practices and corporate governance. The vision or strategy was for a longer period of time that needed sustenance, resilience and concern for the consuming population and in general, the humanity and nature. Over the decades, as the innovations became rapid, new products and services got developed, consumption by population increased and economies grew larger, a long term strategy had to suffer in execution and sustainability of the business. Agility was the need of a business enterprise and that was slow on adoption due to slow technology adoption and execution methods.

Over the succeeding decades, a business strategy had undergone many changes and today we talk about meeting mostly the expectations of business analysts, investors and share holders. That means how to accelerate the growth of the business and maximise the profits. Obviously this has its own challenge as business leaders tend to achieve this singular objective with a strategy that is short sighted in vision and execution. There is nothing wrong in working towards maximising profits but there are methods and ways to realise it in a short term. In fact the emphasis today by many thought leaders is towards building a strategy for short term due to the demands of security, rising competitions, regulations, geo-politics and technology disruptions.

Business leaders, when adopting a short term strategy, must not look at maximising profits alone and rather focus their own energies and that of their boards towards handling the disruptive trends in macro and micro environments. They must ensure they keep the environment, sustainability of business and corporate governance ( ESG) always in sight respecting social and national and global mandates.

This short term strategy needs to be a transformational one to take on the new challenges and opportunities to drive the Next Generation and to offer immediate term benefits. It may be necessary to set a target date to achieve the objective and then work backwards to develop and execute actions in successive steps. These actions would need to be towards transforming the technologies that are in use in the business, understanding ESG mandates and creating capabilities to deliver these transformational changes. The time frame could be 6-8 years depending on the hierarchical nature and the size of the business that is being driven.

In conclusion, a business must now look at strategy in shorter intervals of time and create ( or seek) capability to execute all those actions that satisfy all the stake holders of business.

Anger Management

When you are angry, you are just a character in someone else’s story. But when you let your anger go, you reclaim your own story and become your own protagonist again.

How often we have seen careers or relationships are ruined due to anger that go uncontrolled. It is the primary reason why some people could not achieve what they had set out for. It clouds our thoughts and we don’t think in a rational manner. Consequently the actions we take in those moments may not be the correct ones.

Everyone gets angry at trivial and justifiable things but we know how anger management plays an important element in shaping us what we are and defining our character in dealing with people.

Psychologist prescribes many anger management techniques as a part of a therapy when it is considered as a mental disorder impacting one’s way of life for a longer period of time. But let us dwell on only occasional mood swings due to anger that are not harmful to us and to others. In our day to day professional and personal lives they may help to balance our relationships with colleagues and relatives.

Meditation is one way of practicing anger management and it requires proper guidance from experts. There are other simple techniques as listed below:

Anger Management Techniques

1.Count to 20 before saying anything.

2.Leave the room for several minutes, or hours, if necessary, before discussing sensitive issues that may provoke your anger.

3.Write out a response to a problem before tackling it orally or in debate.
This will give you time to think about the best approach to a problem rather than responding with random anger.

4.Keeping a diary (journal) and writing about negative emotions to get them out of your system.

5.You may also want to keep a pet, since studies show that petting a dog or cat, for example, helps to reduce blood pressure levels and harmful substances in your system that can damage blood vessels if left unchecked.

6. Talking over situations with a trusted friend and venting to a therapist.

Ref: https://lnkd.in/esiZAe-X