Digital Revolution: Are you Part of it?

The other day I went to a local sweets vendor near my office and I found a playcard pasted in front stating "Now you can find us on Google" . The owner was a young guy in the mid 30's and when asked about the playcard told that " Now we are visible from anywhere in the world and smiled".

This experience made me think of the digital revolution we are witnessing here in India at three levels ie individual ,organisation and country level.

Individual Level

Today we cannot imagine life without Facebook, Linkedin, twitter, Google etc . We define our digital image by sharing our thoughts with others. Even organisations are allowing their employees to access these tools from their workstations. These digital channels are taking Engagement to a different level altogether. Recruiters are active on social channels like Linkedin, Facebook etc and Digital Image consultants have come up suggesting ways to improve your digital image. Out buying behavour too is changing as we are buying more on Flipcart, Snapdeal etc. Any leader who is still not active on these channels is loosing out.

Organisation level 

Today even a small street vendor is aware of the power of internet- Google My Business is free and you can use it to give public identity to your business.Organisations are becoming aware that they need to have a Digital Marketing starategy in place. In fact for banks and Financial services the traditional routes marketing and sales are giving way to digital routes as they are more cost efficient and new tech savy customers are more used to them. Even traditional IT companies like Infosys, TCS etc are having a Digital Marketing consulting practice within their organisations.

Country Level

Our new government has come up with a Digital india Project which aims to offer a one stop shop for government services. There are resources like Khan Academy which are enabling  A free world class education irrespective of your country of origin. Isn't it amazing !!

India as a country is changing fast and with the promise of new government in enbling new IT infrastructure and more and more people using internet we are bound to emerge as leaders globally. 

A Business Idea: Company Run By Retired Employees

This idea came to me when my dad retired and slowly saw him slip to boredom. I always wanted to do something for the retired. Taking example of a teacher whose skill peaks when he/she retires and in most of the cases this skill goes waste as he/she never continues to teach and even in some cases when he/she teaches as a guest lecturer the money which he/she makes is not enough. What if there is an organization started by retired persons and for the retired persons.

As far as I know there are self help groups for the old people but there is no profitable venture for them here in India. I hope someone in India should really start such venture as I am sure that such venture would be profitable and will also help thousands of elderly and will give them a reason to share their skills and contribute.

An Overdraft Option

Where can you get a cheap loan with flexible disbursement and repayment schedules? If something like that existed, it would be as perfect a loan as you could conceive. The reality is, such a product does exist. It is what we call an ‘overdraft/loan against securities’. If you want periodic liquidity for some reason such as a cash flow mismatch or for a contingency then... it may be prudent to borrow against the securities.

A secured overdraft 

This is effectively a type of secured loan extended against a financial security. Rather than give a loan of a specified amount, it sanctions a credit line in your current account, through which you can withdraw the money according to your need and up to the approved limit. And you pay interest only on the amount you withdraw. Such a facility is efficient too in that it lets your assets earn their returns without disruption.

The overdraft facility provides customers the flexibility to structure their interest payments and repay their outstanding debt in parts based on their cash flows. Further, the repaid amount is again available as a credit line, which can be drawn down if the need arises. A lot of savvy customers utilize this facility as it is the cheapest and very flexible.

Securities you can pledge

 Dematerialized Shares ,  Mutual Funds,  Fixed Maturity Plans (FMP), Exchange Traded Funds (ETF) , Insurance Policies  ,Bonds, NSC / KVP etc

Costs Involved

Since a security reduces the risk for the lender, it can price this credit line at a lower rate than an unsecured loan.

While an overdraft facility may appear to be more expensive than a term loan, the flexibility of repayment when there is liquidity and, thus, the capability to reduce interest rates, is a huge benefit. Since you will have to pay the comparable processing fees for both lines of credit, we cannot say that overdraft is a more expensive product than a term loan. In a term loan, the interest liability is uniform on the loan amount sanctioned while in overdraft one pays interest based on his utilization.

Another benefit is that an overdraft facility can be foreclosed without any penalty, while you could have to pay 2-4 per cent of the outstanding principal as penalty when you foreclose a term loan.


Processing Time

Before issuing the credit line, banks have to establish a right over the asset through a mortgage-creation or lien-marking process. With improvements in technology and processing, across both the stock market and the mutual fund platform, processing normally takes a couple of days. The time taken is essentially in establishing contact with the depository participant and mutual fund registrar as we need the confirmation that we have an effective lien in our favour. For shares, you need to contact your depository participant and instruct them to mark a lien in the bank’s favour.

Conclusion
 

So, if you just need the money to tide over some swings in your cash flow, why liquidate your assets? Keep it simple and cheap and just go for an overdraft instead.

The Right Transition

In one’s professional life one always faces transition where one may be asked to lead a new project within a strategic business unit or you may be transitioning from a smaller role in a bigger organization to a bigger role in a startup company. How one approaches such transitions become very important for one’s success or failure.

In a startup situation the challenge is to build the structures, systems and strategy from scratch without any clear framework, recruiting and building a high performance team and all but with limited resources. In a situation where you have been told to save a business acknowledged being in deep trouble the challenges are to re-energize the demoralized employees and stakeholders, making effective decisions under time pressure and going deep enough with painful cuts and difficult choices. In case of managing a rapidly expanding business the challenges are to put structures and systems in place for effective scaling and integrating many new employees. In case of re-energizing a previous successful organization that now faces problems the challenge is to convince employees that change is necessary and carefully restructuring the organization. And in case you are in a situation where you have to sustain success where you are told to hold a position by a very successful leader then the challenge is to manage the team the leader has created and also have to find the ways to take the company to the next level. In many cases the challenges may be a mix of the above for which the challenges and to-do list will vary.

Is there any right way to downsize?

It is a well known fact that organizations who have not treated their employees well during the downturn are now finding difficult to recruit good people and in fact have started loosing people who are leaving them for greener pastures. So much is written about this topic but still very few manage this well. I firmly believe that employees should always be treated with dignity, fairness and respect. Management should be more visible in such situations and should not go into hiding. They should help people find new jobs by leveraging their personal networks and should avoid doing only a lip service. Downsizing if not done properly, will definitely dent the long term prospects of an organization.

Do we know our Vocation?

Many people who are just starting their careers simply don’t have any vision for themselves. Does it not make sense for us to visualize what we intend to do before we start our professional careers? Vocation is the biggest concept which incorporates our purpose, mission, and calling or is something unique to each one of us which will define our legacy. It is the beacon in our life that keeps us headed in the right direction even when we are being tossed around by fate. Then comes your career which is a subset of your vocation. If we understand our calling, we can have different calling along the way without redirecting our paths. For example if you have a desire to help others then you can fully embrace that as a teacher, author, politician etc. Job is the smallest of the three concepts and the least significant. It describes how we earn a living and perhaps what we are currently doing between 9:00am to 6:00pm. We tend to focus too narrowly on our jobs. Thus, if the job disappears, the immediate response can be that of diminished self-worth and questioned identity. However if we are paying attention, times of change can wake us up to our dreams. Life experience is a wonderful teacher and clarifier. The key is not to loose sight of your vocation.

Is it value for money?

Smart companies perceive not just threats in recession but also opportunities. In fact during the great depression companies like GE, Kellogg and P&G outmaneuvered their rivals. They grew by delivering products/services that enabled hard hit customers to do more with the same resources. Cost innovation and not cost cutting is the order of the day. The idea of innovating to provide offerings that provide greater or same functionality but at a lower price is unconventional. However smart companies in emerging markets are doing that to appeal to the great mass of value conscious customers by selling high tech products at mass market prices, by offering choice and customization to value customers and turning premium niches into mass market. All conventional wisdom has been turned upside down.

Provocation based selling

Sales professionals generally wonder what they need to do to sell their products or services in a downturn when companies are not ready to spend any extra money. In fact in these circumstances the influencers would have changed and may not be the same people with whom you are in touch with. To begin a provocation based sale you need to do three things. Identify a problem that will resonate with the line executive in the target organization. Develop a provocative point of view of that problem that naturally links to your solution and lodge that provocation with the decision maker who can take the necessary action. The problem should have sufficient weight so that money can be spent to fix it. This problem should bother the CEO and must be keeping him awake all night. The above steps if done properly will even lessen the sales cycle. The above method has been taken from a management consultant approach who is trained to look for problems which are so complex that clients remained challenged by them and then develop original points of view about them.

Can we define Innovative organization?

What makes an organization innovative is debatable but there are some attributes which can differentiate an innovative organization from others. Some of these are as under:-

1. Freedom which is visible when a team member is empowered to try new approach to his/her work.
2. Trust which shows when members share their ideas with one another with openness.
3. Humor when people do their work and have fun too.
4. Idea support when members encourage each other ideas.
5. Debate when they constructively challenge each other ideas and approaches.
6. When there is less of conflict and interpersonal issues.
7. When members have time to think about new ideas and new ways to problem solving.
8. When members can take action in case of risk

It is the responsibility of the leader to oversee the change towards innovation and to use all his resources to make his organization more innovative. He can choose persons with potential and can make them attend leadership trainings which can be arranged in-house or from outside to instill a culture of innovation. One should always remember that when we are talking about culture change the time frame most certainly goes up from days to years and this becomes most important factor to gauge a CEO’s performance.

The Right Transition

In one’s professional life one always faces transition where one may be asked to lead a new project within a strategic business unit or you may be transitioning from a smaller role in a bigger organization to a bigger role in a startup company. How one approaches such transitions become very important for one’s success or failure.

In a startup situation the challenge is to build the structures, systems and strategy from scratch without any clear framework, recruiting and building a high performance team and all but with limited resources. In a situation where you have been told to save a business acknowledged being in deep trouble the challenges are to re-energize the demoralized employees and stakeholders, making effective decisions under time pressure and going deep enough with painful cuts and difficult choices. In case of managing a rapidly expanding business the challenges are to put structures and systems in place for effective scaling and integrating many new employees. In case of re-energizing a previous successful organization that now faces problems the challenge is to convince employees that change is necessary and carefully restructuring the organization. And in case you are in a situation where you have to sustain success where you are told to hold a position by a very successful leader then the challenge is to manage the team the leader has created and also have to find the ways to take the company to the next level. In many cases the challenges may be a mix of the above for which the challenges and to-do list will vary