APRIL/MAY 2012
NEW RESEARCH:
What Entrepreneurs Really Want
Page 44
Outstanding Workplace Values
The Magazine for Growing Companies
Cover Story
Outstanding
HOW TO BE AN EFFICIENT LEADER
Workplace
Page 56
Values Diversity | Feedback | Personal Touch | Rewards & Recognition
The Way We Work
Cracking the partnership code
Learn from four award-winning companies inlcuding:
MakeMyTrip BrickRed
The magazine for growing companies
Two buddies on how they achieved hyper-growth
Page 28
Must-Have web Tools
Page 56
Hitesh Dhingra (front) and Amanpreet Bajaj, co-founders of LetsBuy.com, are confident they can work as well with Flipkart which recently acquired LetsBuy.
to engage customers on your website
Special Coverage:
April/May 2012 | `150 | Volume 03 | Issue 03 A 9.9 Media Publication | inc.com Facebook.com/Inc
@incmagazine
3rd Annual Inc. India 500 Awards
Page 18
NEW!
Enterprise finalists from across South East Asia
April 12-13 Taj Lands End Mumbai, India
Register today!
The annual Sankalp Summit is one of Asia’s largest collaborative platforms, bringing together social enterprises, impact investors, policy makers, academicians, and other market makers. It connects over 400 social enterprises, over 400 investors and funders, and 10,000 other stakeholders from across the world.
Visit www.sankalpforum.com or email sankalpforum@intellecap.net
Featured Speakers
Featured Sectors
Vikram Akula
Founder and Ex-Chairman, SKS Microfinance
Vijay Mahajan
Clean Energy/Clean Technology Agriculture, Food and Rural Business
Chairman, Basix Microfinance President of MFIN
Education/ Vocational Training
Ronnie Screwvala
Technology for Development
CEO, UTV Group
Health, Water and Sanitation
Intellecap S H A P I N G
O U T C O M E S
Sankalp Forum is an Intellecap initiative. Learn more at www.intellecap.net
April/May 2012
contents
28 Good Values, Healthy Companies You need more than a fat pay
cheque to keep employees happy. Four companies tell us how to create great workplaces with values that make both business and people sense. by ira swasti
30 MakeMyTrip 33 Cactus Communications 34 BrickRed 38 Claris Lifesciences
40 How I Did It S. Ramakrishna Karuturi
Serendipity led Ramakrishna Karuturi to a rose plantation in Israel in the mid-90s. Fascinated, he set up his own cultivation business. Today, Karuturi Global produces 650 million rose stems a year. as told to meenakshi kumar
56 The Way We Work
photograph by jiten gandhi
A New World Tomoyo Yasuda works at Cactus Communications, which has people from seven nations in its Mumbai office.
on the cover
Hitesh Dhingra and Amanpreet Bajaj, co-founders of LetsBuy.com. Photographed by Subhojit Paul in Gurgaon. Cover design by Anil VK. This edition of Inc. magazine is published under license from Mansueto Ventures LLC, New York, New York. Editorial items appearing on pages 21, 52-60 were all originally published in the United States edition of Inc. mwagazine and are the copyright property of Mansueto Ventures, LLC, which reserves all rights. Copyright © 2009 and 2010 Mansueto Ventures, LLC. The following are trademarks of Mansueto Ventures, LLC: Inc., Inc. 500.
Hitesh Dhingra relies on instinct. Amanpreet Bajaj on details and precision. This “data-gut” combination has helped their company LetsBuy.com click its way to business glory. as told to shreyasi singh
44 The Motivation Matrix
A new study sheds light on what company founders value most, and how an understanding of your priorities can help you in business. by leigh buchanan
april/May 2012 | INC. | 1
contents
April/May 2012
47
06 16 26
05 Editor’s Letter
16 Mind Roots
Strategy
A low-cost detector for eye ailments
By Shayamal Vallabhjee Creativity in business is all about seeing connections in the unconnected.
47 hiring How one firm gets new hires on board, and up to speed—fast
09 Launch
18 Special Coverage
49 finance American start-ups find funding from a surprisinging source—ad agencies
06 Innovation
Viewpoints: Why you should hire technical managers A big night: Inc. India 500 award ceremony Social enterprises: On their way to glory? The Inc. Data Bank Skimmer’s Guide to The Power of Habit, by Charles Duhigg
13 Get Real
By Jason Fried Creating a company culture when your employees are scattered across the map
14 The Dressing Room
By Krishna Kumar A difference of opinion among your teammates is good for the organisation. Let them speak up
2 | INC. | april/May 2012
The legacy, the celebration and the people behind the third annual Inc. India 500 awards
Guidebook, No. 3
How to establish a code of ethics for your company. Find the guidebook following Page 24.
25 The Goods
Tools for engaging customers on your company website Must-Haves: A way to tap social networks for travel tips Gadgets for mobile workers Cloud-based services to store and sync data Tech Trends, by Soham Raninga: Is the ultrabook right for you?
50 leadership Everyone knows leaders need to be tough and decisive. But elegant? Really? 52 design A website is reborn 54 elevator pitch Building Blocks sets up science labs for schools and colleges. Will investors show up with `8 crore?
60 I Wish I Knew Then...
Over-confidence never pays in business, believes Alufit founder Pankaj Keswani. A recent rocky expansion plan has taught him the importance of detailed research.
Inspiring Stories
Your magazine is appealing because it highlights entrepreneurs’ achievements. Every issue is a collector’s issue, and your articles must be inspiring our youth to become entrepreneurs. I loved the write-up on Printo’s Manish Sharma. In my 35 years in HR, I’ve seen very few instances of people like Manish. In fact, I shared the story with my children too. — Chandraprabha Venkatagiri, via e-mail
Looks good I liked both your anniversary special issue and the book on the Inc. India 500 awardees. They are both very informative and the presentation is very imaginative and attractive. shubha singh, company secretary, Dhanuka Agritech
Really a worthy story? While going through the second anniversary issue which covers the 2nd gen biz
MANAGING DIRECTOR: Dr Pramath Raj Sinha Printer & Publisher: Anuradha Das Mathur Editorial managing Editor: shreyasi singh assistant features editor: rohini banerjee feature writer: ira swasti Copy Desk Managing Editor: Sangita Thakur Varma DEsign Sr Creative Director: Jayan K Narayanan Art Director: Anil VK Associate Art DirectorS: PC Anoop & Atul Deshmukh Visualisers: Prasanth TR Anil T & Shokeen Saifi Sr Designers: Sristi Maurya & NV Baiju Designers: Suneesh K, Shigil N, Charu Dwivedi Raj Verma, Prince Antony, Binu MP, Peterson & Prameesh Purushothaman C Chief Photographer: Subhojit Paul Photographer: Jiten Gandhi
4 | INC. | april/may 2012
kids, a mixture of thoughts came up. I can understand the theme of two which leads to their inclusion. It was a great idea, and I’m sure the young people featured in the story will eventually prove to be worthy heirs to their legacy. But as a first-generation entrepreneur, I think that these guys had it easy. I wonder if they would have done as well without the parental aashirwaad. I know they’ve worked hard, went to the top schools internationally, and have learnt their ropes, but my nagging
doubts don’t go away. As I moved on and read about the Lemon Tree founder Patu Keswani, there was immediately a 180-degree transformation in my perception. Now, that’s a self-made entrepreneur whose story is a great inspiration.
community team product manager: mahesh ravi assistant product manager: Rajat gupta associate: deepika sharma
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tarun bangari, founder and ceo, janta khoj
To submit a letter, or alert us to an error, write to us at inc.india@9dot9.in. Letters may be edited for space and style. Submission constitutes permission to use.
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editor’s letter
Beyond Pay Hikes and Promotions... A significant part of my childhood was spent in Jamshedpur, a town in Jharkhand and the headquarters of Tata Steel. Leafy, clean and self-sufficient, the Steel City (as it is known) was an oasis of an urban centre. There, the Tatas managed to create a township where employees could be insulated from the inefficiencies that plagued Indian cities. Jamshedpur had uninterrupted power, good schools, hospitals, entertainment facilities and ample parks. And, it was built on a core value—of really engaging with the community. Employees reciprocated with a loyalty and “stickiness” most companies today will find impossible to match despite handing out big bucks and bigger frills. The Jamshedpur model also demonstrated that generous employee perks and financial prudence were not natural adversaries. In fact, they married well together. Our cover story this time has more contemporary examples of a similar effort. All four companies in our package on outstanding workplaces have effectively blended Things I Learnt people benefits with corporate In This Issue objectives—mostly with the help of a Be perennially unique value both relevant to their paranoid. It’s a good state of mind for needs, and personally championed achievers to be in, says by the entrepreneur in charge. Ramakrishna Karuturi. Take Cactus Communications, Begin to worry when for example. Though it is Mumbaiyour team members agree based, the academic editing comwith you all the time. It’s pany has more than 30,000 clients unhelpful for both you and your company. across the globe. A truly global
workforce might have been a necessity for Cactus, but the company went beyond that. It seeded its culture with a vibrant diversity—the head office has employees from seven countries, and you only have to look at the photographs on Page 32 to see what I mean. This focus has helped Cactus bring together a medley of different ideas, perspectives and ways of working. There’s also MakeMyTrip, where CEO Deep Kalra believes “you can’t over-recognise effort or achievement”. MakeMyTrip has robust rewards programmes that recognise not only employees who net in the highest sales, or bring in the most business, but also those who uphold company values or go beyond the call of duty to help peers out. We believe these stories make for good reading in today’s age of talent crunch and wars, and crippling attrition rates. I hope you find them useful as you craft your own people policies. Much like the employees at these companies, I’ve benefitted from an exciting organisational value at 9.9 Media—this magazine’s publisher. Our business might be about specialty publications, but an important part of the management aim has been to create new media leaders—almost all our publications are helmed by first-time editors. For me, bringing out Inc. India has definitely been a wonderful opportunity. As always, I look forward to hearing from you. Do tell us what you thought of this story.
Shreyasi Singh shreyasi.singh@9dot9.in april/May 2012 | INC. | 5
6 | INC. | april/May 2012 —K Chandrasekhar, Founder, Forus Healthcare
“The device makes it possible for people in rural areas to get diagnosis at their footstep.”
In a country where the ophthalmologist to patient ratio is approximately 1: 70000, 3nethra facilitates remote diagnosis and eye-care treatment outside the hospital environment. A portable screening device, it can detect major ailments of the eye such as cataract, glaucoma, diabetic retina and cornea problems. It also provides accurate refractive index measurements. The automatic screening algorithm provides an “OK” or “See a Doctor” display on the screen to report problems. The device’s reasonable price (` 5-6 lakh) helps it become more accessible to the rural population. “The current vision care system needs expensive diagnostic devices and highly-skilled ophthalmologists. This device solves those problems,” says K Chandrasekhar, founder, Forus Healthcare. Already, 3nethra sits in 20 hospitals, diabetic and telemedicine centres across India.
Easy Spotter
innovation Companies on the Cutting Edge
Photograph by s. radhakrishna
Field Of View: 45 degrees
Minimum Pupil Diameter: 4mm
Specifications Image Dimensions:Â 1024x768 pixels, 24 bits per pixel
Detailed View The device includes all functions of a slit lamp and fundus camera that are essential for pre-scanning
3nethra Forus Healthcare
reported by TEAM INC INDIA
News. Ideas. People.
launch
viewpoints
Leading by Example
“ Hire people who like to get their hands dirty rather than those who just want to manage.” Swapnil Shinde, co-founder and COO of Dhingana, a social music streaming site that makes downloading and listening to Indian music legal, and free, recently tweeted: “There’s a reason why people should be managed by people who have done the work before—a clear way to evaluate talent and performance.” In his Punebased firm founded in 2007, he ensures he hires technical managers who can do a good job of managing people, instead of hiring just people managers. This tip is clearly tuning in great results at Dhingana. More than 3.5 million people across Asia, North America and Europe access the music platform each month.
Photograph by jiten gandhi
april/May 2012 | INC. | 9
launch
Leadership Get the scalability DNA
Winning Moments Sanjeev Bikhchandani (left) and Pramath Raj Sinha releasing the special book
Celebrating the Rising Stars of India Inc. An evening of celebration and camaraderie February 29, 2012, saw the culmination of the third annual Inc. India 500 Awards at Assocham House, New Delhi. It was a special night for us as more than 100 founder-owners and senior leaders of India’s fastest-growing mid-sized companies—as listed in our annual rankings—came together to celebrate the spirit of entrepreneurship. The event took off with a keynote address by Sanjeev Bikhchandani, founder and executive vice-chairman, InfoEdge India, who talked about the qualities high-potential entrepreneurs must internalise as they scale. As Mr Bikhchandani’s engrossing address came to an end, it was time to release a special coffee-table book on the Inc. India 500. Pramath Raj Sinha, managing director, 9.9 Media, and Mr Bikhchandani did the honours. It was then time to recognise our awardees’ entrepreneurial contributions to India. Amidst the rapturous applause, our rankholders went onto the stage to receive their certificates from our guest of honour. The myriad colours embellishing the stage were reminiscent of the variety and distinctiveness of our winning companies that cut across geographies and sectors. As the evening wore on, it was time to show our guests a good time. The next few minutes witnessed waves of laughter rippling through our esteemed gathering as Nitin Gupta, stand-up comedian and founder of Entertainment Engineers, a Mumbai-based firm that organises stand-up comedy acts, took centre stage. From what success means to how people interact on Facebook, everything was fair game for Gupta. The laughter that the event ended on was a great pointer to the future— and the perfect way for us to celebrate our winners. We wish them bigger successes ahead. ***To see more event action, turn to page 18.
10 | INC. | april/May 2012
One of India’s most successful internet entrepreneurs, Sanjeev Bikhchandani, the founder and executive vice chairman of InfoEdge India, the country’s premier online classifieds company, was the keynote speaker at the Inc. India 500 awards. An Inc. India 500 winner himself in our first ranking in 2009, Bikhchandani’s journey perfectly embodies what gritty entrepreneurship is like. It’s a tale he recounted with great ease at the award ceremony. His early experiences—of starting out in his parents’ servant quarters, or having little access to capital— found perfect resonance in our gathering of entrepreneurs. But more than looking back, Bikhchandani chose to look ahead by introducing the winners to what he termed the “DNA of Scalability”. According to him, founder-owners need to embrace and live the changes their organisations bring forth. Bikhchandani put forth five key pointers—give your company the first-mover’s advantage by solving an unsolved problem, base your idea on detailed, continuous customer insight, become a personal magnet for talent, make sure you continue to engage with the customer, and put in place impressive corporate governance standards. —Inc. India
Good Advice Sanjeev Bikhchandani celebrated the winners’ achievements with a few tips of his own
launch
Do Good, Get Big? Report says India’s social enterprises are young, but raring to go India is an active crucible for market-based solutions to poverty. These social enterprises (socents) are
demonstrating that profitable business models can be worked out to tackle problems of livelihood, agriculture and education. The social enterprise industry in India has experienced dramatic growth over the last five years, with the greatest spike occurring in energy and agriculture. Health, livelihood development and water/sanitation have also witnessed a surge, while education has just taken off. Social Enterprise Landscape Report, a study brought out by Intellecap, a consulting and investment firm focussed on social enterprises, recently highlighted interesting findings on the growth, profitability, geographic distribution and social impact of these companies. —S.S. 11+ Years
11%
6-10 Years
3-6
10%
15%
Both
Rural
35%
0-2 Years
46%
41%
3-5
27%
3-5 Years
33%
1-2 years
58%
Urban
24%
Years in Operation
Rural vs. Urban Market
Years to Profitability
The socents landscape is a young but fastgrowing industry. Nearly half of today’s enterprises have been in operation for less than two years, and a huge 80 per cent for five years or less. The industry appears to have taken off in 2005-06 around the time that microfinance got global recognition as a market-based strategy. In the last five years, there has been a continued and dramatic growth, straight through the global recessions, and likely spurred in the last two years by investors turning away from microfinance towards other investment opportunities.
Forty per cent of social enterprises target only rural markets, and another 35 per cent target rural and urban markets. A high concentration of headquarter locations are in the southern and western regions but nearly 60 per cent of enterprises are operating in at least one low-income state (LIS). This suggests that while socents are typically based in regions where they have better access to human resources, infrastructure and networks, this does not prevent them from working in underserved regions.
More than half of the surveyed social enterprises are break-even or profitable. One quarter of surveyed social enterprises report being profitable while another 28 per cent report they are breaking even. As with total revenue and revenue growth, profitability is closely linked to enterprise age in our survey results. Over time, an increasing portion of enterprises reach break-even and profitability milestones. Profitable socents emerge quickly. Of the socents who have reached profitability, 60 per cent reported doing so within the first two years after funding.
Pure Profit
4%
SOURCE: Social Enterprise Landscape Report
Profit First
Impact First
27%
34%
Impact/Profit Balance
35%
Roughly two-thirds of enterprises treat the social motive as equally if not more important than the profit motive. Approximately one-third prioritise maximising social impact over profit maximisation. This finding suggests that most social entrepreneurs are using business as a tool to achieve a social goal rather than viewing the social impact as a positive outcome that will naturally flow from a certain type of business as usual. There is a trend towards emphasis on profit over impact in younger socents. This could be a result of the growing amount of funding available in the space, leading more profit-driven entrepreneurs into the space as well as a cultural shift occurring in which society is becoming more accepting of a combined profit and social impact motive.
Balance Between Profit and Impact april/May 2012 | INC. | 11
launch
Crunching the numbers
Work-Life Balance
Global Entrepreneurship
Share of small-business owners who say the poor business climate had a negative effect on their health in 2011:
Portion of citizens who say entrepreneurs are highly valued in their country:
The book: The Power of Habit: Why We Do What We Do in Life and Business, by Charles Duhigg; Random House.
55% 51% 27% egypt
russia
37% germany
united kingdom
kenya
india
united states
33%
67% 66% 62% 60%
china
Portion who exercised less in 2011:
indonesia
44%
75%
Portion who gained weight:
22% Manta
Portion of citizens who say they have had an idea for a new business:
79%
Resolutions
Small-business owners’ top goals for 2012:
1. Grow the business
62% 67%
51%
2. Improve relationships
39%
with friends and family 3. Eat healthier 4. Work out more 5. Work less Manta
37%
29% 27% 28%
BBC World Service; GlobeScan
Success
Word of Mouth
The most important measure of success, according to small-business owners:
Portion of U.S. consumers who use the following methods to discuss products and services:
24% Earn enough to live comfortably
9% other 4% Sell the
business for a big profit
6% Pass the business
to a family member
23% Do something I enjoy
18% Increase
profitability from year to year
9% Pay employees enough to live comfortably
7% Have free time to do what I want
The Hartford Small Business Success Study
12 | INC. | april/May 2012
A skimmer’s guide to the latest business books
In-person conversations: 84% E-mail: 58% Mobile phone: 50% Social networking sites: 35% Instant messaging: 22% Online product reviews: 17% Personal blog: 14%
Average rating given in online reviews:
4.3 out of 5 eMarketer; Word of Mouth Marketing Association
—Compiled by Andrew Shafer
The big idea: Habits can be our making or our undoing. Either way, they are powerful. Canny marketers use cues to activate consumer spending habits, and wise leaders create strong institutional habits. The backstory: New York Times journalist Duhigg has won numerous awards for his reporting. Your business on autopilot: Duhigg reminds us that business processes and routines are nothing more than habits practiced on an organisation-wide scale. If you can get your kids to brush their teeth every night, you can get your employees to provide great customer service. If you read nothing else: Chapter Four recounts Paul O’Neill’s turnaround of aluminum company Alcoa. Duhigg uses the example to illustrate how improving a single habit— practicing safety, in Alcoa’s case—ripples out to improve an entire organisation. If all companies followed Starbucks’s lead and trained employees in self-discipline, as described in Chapter Five, customer service and productivity would soar. Rigour rating: 9 (1=Who Moved My Cheese?; 10=Good to Great). Duhigg interviewed more than 300 scientists and executives and consulted many academic studies. Sixty pages of concluding notes offer a window into the sausage-making process, complete with responses to fact-checking queries. —Leigh Buchanan
kelly kollar
inc. data bank
Get Real
BY
Jason Fried
Jason Fried is co-founder of 37signals, a Chicago-based software company. He is perfectly happy working remotely.
Out of Sight, Top of Mind How to keep a business on track when your top performers are scattered across the map Caldwell, Idaho. Edmond, Oklahoma. Phoenix,
Arizona. Rapid City, South Dakota. What do these places have in common? Someone who works at 37signals lives in each of them. Our home base is Chicago, but more than half of our 32 employees live somewhere else. When someone asks me where we’re based, I like to answer that 37signals is everywhere. These are not peripheral workers. They are core people, the ones who design our products and keep our customers happy. Our lead system administrator (the guy who keeps the servers running and our applications online) lives in Florida. A designer is in Colorado. We have programmers on both sides of the country. Key customer service people live in Texas and Tennessee. In fact, David Heinemeier Hansson, my business partner, is from Copenhagen. We started working together remotely before we’d even met in person. For years, we worked seven time zones apart. Today, he splits his time between Chicago and the south of Spain. I never planned on building a company like this; it just sort of turned out that way. But I’m not complaining. Our willingness to hire remote workers gives us some key advantages—and has led to surprising revelations about what it means to work together when you aren’t together in the traditional sense. One upside to having a company spread across many locations is that you typically get more work coverage during the day. Because of time-zone spreads, a business can be effectively open for 12 to 15 hours, instead of just eight or 10. This means you’re more available to your customers. Sure, you could stagger workers into separate shifts, but that often segregates people and isn’t worth the trouble. Another, more important, advantage: By not getting hung up on geography, we can hire the best people we can find. This has become more important than ever. Unemployment may be stubbornly high, but talk to ILLUSTRATION by Shigil N
anyone in the media and technology industries, and there’s a good chance she will complain about how hard it is to find talented people. Why limit yourself? Great people are better than close people. Great and close, of course, are ideal—but ideal is tough to find these days. Of course, not everyone can work remotely. Not everyone does his best while working from his home, a co-working space, or a café. As a result, we usually try to hire people who’ve had experience working away from the mother ship. Another issue is culture. Can you create a cohesive, healthy company when staff members rarely see one another face to face? I think so. The key is not to let two cultures emerge. You can’t treat the locals and remote workers differently. Everyone has to play by the same rules and communicate the same way—no matter how far away people’s desks are. You will need a place where everyone, regardless of location, talks, shares work, and discusses ideas. It could be a cloudbased chat room, a project-management tool, a teleconferencing system like WebEx, or a wiki. The key is to find a way to make your virtual workspace the place where everyone communicates, not just the people you can’t see. It can take some getting used to, but eventually, employing such tools becomes second nature. At our office, even people who sit next to one another communicate using our collaboration tool, Campfire. There’s one question I hear from entrepreneurs all the time: “How do you know work is getting done if you can’t see people doing it?” My response? Observing work take place is not the same as seeing work get done. In fact, I have found that it’s easier to know if people are getting work done when they’re remote. That’s because their work has to speak for itself. When you don’t have just being there at the office to hide behind, it becomes all about the work. And it’s hard to argue with that. Follow Jason Fried on Twitter: @jasonfried. april/May 2012 | INC. | 13
THE DRESSING ROOM BY
KRISHNA KUMAR
Krishna Kumar is the founder of Kinesis Sports, a Bengaluru-based tennis training institute. He is also a professional coach specialising in transformational leadership. He likes a difference of opinion.
Captain disparate opinions. Surround yourself with advisors and team members who think differently from you, and from each other Prize-winning American publicist and political commentator who coined the term “Cold War” once said, “When all think alike, no one is thinking.” Nearly four decades after his death, we continue to see the ill-effects of “structured” thinking, most so in the world of business where creativity and innovation are critical to success. Over the years, honchos of small, medium and large businesses have confided in me about feeling rudderless in their corporate journey. “My business is not going anywhere in particular,” is a refrain I’ve heard several times in interactions with CEOs and other decision makers across the country. At a recent conference, for example, the CEO of a mid-sized company sidled up to me during a coffee break and asked if we could discuss a problem he was facing. He began by telling me that though his business was booming across traditional product lines, he knew his company was unable to cash in on all the opportunities available. He gave his diagnosis of where the problem began—in team meetings his managers were high on enthusiasm when it came to implementing ideas, especially if they came from him. “But they rarely contribute ideas of their own and seldom contradict my words during team discussions,” he added. He had a
14 | INC. | april/May 2012
talented and experienced team at work, he said. So, he was finding it difficult to understand this palpable lack of creativity and innovation within his teams. I curbed my instinct to begin dishing out advice, and instead asked my friend if he had heard the story of the “Naked Emperor”. As legend goes, there was once an emperor who was known to be deeply narcissistic,
photos.com
Walter Lippmann, the Pulitzer
THE DRESSING ROOM
and cared only about showing off and indulging preferences for expensive clothes. Two con-men who visited the kingdom heard of the king’s penchant and decided to exploit this weakness. They went to the palace and offered to stitch the king the finest outfit he would have ever set his eyes on. They told him they used a cloth so special that only a few people with a very high intellect and refined taste could see it. Not confident about his own ability to judge this fabric right, the king decided to try out the new outfit before two of his trusted lieutenants. The con-men had planned the ultimate deceit. The costume was nothing at all—the con-men had convinced the king that an invisible outfit was the special one. So, the king was basically in the buff after he thought he’d tried the new outfit on. His trusted lieutenants were shocked to see their master naked but were scared to admit it. They not only praised the king’s costume but also invited other courtiers to take a glimpse of the amazing cloth that was invisible to those who did not deserve to see it. Soon, the entire kingdom turned out to witness a grand procession where the emperor would showcase his new dress. The crowd praised the magnificent clothes of the emperor, each more afraid than the other to admit that they weren’t “good enough” to see the dress material. At this juncture, a small child, who did not understand shame or fear, shouted out naively, “The king isn’t wearing anything.” The crowd caught on and people started discussing the king’s nude procession, first in hushed tones that got louder as the truth dawned on more people. Undeterred, the emperor continued his procession with his head held high but without a shred of clothing on his body. After patiently hearing the story, my CEO friend asked whether I thought he was behaving like this emperor. Well, maybe not. It would be more appropriate to say that the company’s core philosophy was to implement one person’s desire while putting the lid on new ideas and innovation. They were functioning in an environment where the management team preferred to demonstrate collective ignorance. Individ-
ual opinion never came out during discussions and nobody thought it fit to critique the leader’s opinions and ideas. In all fairness, I believe that my CEO friend had sensed this situation but was unable to pinpoint where the fault was. It lay in his style of leadership! Most first-generation entrepreneurs face similar situations in their journeys, especially those that have built their business up from scratch. During this period, they transfer the core values and ethics to the business and often unconsciously handpick a management team that mirrors these beliefs and values. The team, on its part, slides into a comfort zone, a major constraint to creative thinking. But my friend was not ready to give up without another fight. It wasn’t just his lead-
Vulcan married to a life in logic and Dr McCoy, who was driven solely by compassion and scientific curiosity. Both these characters are frequently at odds and suggest different courses of action based on their subjective view of the situation. The captain hears both his advisors and often comes up with a third option, built entirely from his perspective. The fact that the leader has advisors around him with a world view vastly different from each other and from himself provides a clear insight into the captain’s confidence as a leader. A weak leader always surrounds himself with people who are loath to express their opinions. Any organisation that fosters such a behaviour ends up stifling creativity and innovation. This eventually results in a situation where deci-
A weak leader always surrounds himself with people who are loath to express their opinions. ership style, he claimed. He told me in no uncertain terms that his frustration stemmed from the knowledge that his business growth demands frequent doses of innovation. He thought he was in the classic “What Got You Here, Won’t Get You There” phase, to borrow from executive coach Marshall Goldsmith’s bestselling book of the same phrase. That was his problem, he asserted, and he needed to figure out the steps he should take to overcome this entrepreneurial ennui. I wasn’t about to get sidetracked from my diagnosis though. I harked back to Star Trek, the super-hit television serial of the 1970s. James T. Kirk, the iconic commander of the Space Ship Enterprise, once told his close confidante and friend Dr Leonard McCoy—the advantage of being a captain is being able to ask for advice without necessarily having to use it. I also reminded my CEO friend of Captain Kirk’s closest confidants—Mr. Spock, a
sion-making and problem solving is centralised and the company is seldom able to change course mid-stream. On the other hand, enterprises that allow diverse opinions to be aired support greater innovation and prove to be better at solving problems. They avoid group-think and team meetings and discussion forums become genuine platforms for sharing ideas. This is where a Mr Spock or Dr. McCoy can be of help—they fuel creativity and innovation by airing their views and forcing the leadership to think. As noted American educationist and philosopher George F. Kneller said: “Creativity, as has been said, consists largely of rearranging what we know in order to find out what we do not know. Hence, to think creatively, we must be able to look afresh at what we normally take for granted.” Krishna Kumar can be reached at kk@intradconsult.com april/May 2012 | INC. | 15
Mind Roots BY
Shayamal Vallabhjee
Shayamal Vallabhjee is an EQ consultant who has worked with the world’s best athletes and businessmen. He’s also authored several books. He uses the Emotional Quotient to unlock creativity and productivity in business.
The art of creative thinking. Don’t choose between two opposing ideas. Fusing them separates the best from the rest in business
Meet Isadore Sharp—the hotelier who
opened the first Four Season motor hotel (or, motel) in 1961, with 125 rooms in downtown Toronto, Canada. Would-be hoteliers at that time had two choices. They could build a small hotel with fewer than 200 rooms and offer guests modest amenities, sometimes nothing more than a television set or an ice machine in the hall. The other alternative was the “few frills” option—a large hotel of 700-plus rooms that catered to business travellers and had extensive amenities, much like the second Four Seasons hotel Sharp opened just outside Toronto. Each option had its own unique advantages—the small hotel offered comfort and intimacy but lacked
16 | INC. | april/May 2012
the amenities that attracted the business traveller. The larger hotels could afford fancy frills but were cold and impersonal. By early 1970s, Isadore Sharp had opened three Four Seasons motels but on the brink of opening his fourth, he found himself at a crossroad. He loved cozy motels but they could not generate the revenue required to maintain the amenities his target market of business executives expected. His guests loved the amenities at his second hotel, but its sheer scale could never really provide that homely feel that was unique to the motel. With three properties running, Sharp already had two contrasting and existing models. Both had advantages and disadvantages but neither
was a model concrete enough for successful and sustainable expansion. Rather than choosing one of the existing models, Isadore Sharp used his “opposable” mind to hold both models in his head, roll them together and create a new model that incorporated the benefits of each—he combined the best of the small hotel with the best of the large hotel, into a medium size hotel that could offer the amenities with a sense of intimacy and personalised service. Economics didn’t allow for this model to be successful because costs were spread over fewer rooms. Sharp though refused to be bound by conventional economics. He reasoned that if Four Seasons offered distinctly better service than its competitors, it could charge illustration by Shigil N
Mind Roots
a substantially higher premium. That’s how the exclusive Four Seasons chain was born. And, it revolutionised the hotel industry. Isadore Sharp is an example of brilliant Integrative Thinking—the ability to hold in one’s mind two opposing ideas and merge those ideas into a third idea that encompasses the benefits of each individual idea. Integrative Thinking and Emotional Intelligence (EI) are two of the most important skills in business. They single-handedly separate the best from the rest, because they allow an individual to be creative and innovative within the realm of his business. And creativity is the key to staying ahead. The art of thinking creatively has forever been shrouded in mystery but like Thomas Edison, many others geniuses like Charles Darwin, Pablo Picasso, Leonardo da Vinci and Albert Einstein have all proven to be exceptionally extraordinary thinkers. They were the geniuses whose unorthodox approach to thinking gave birth to ideas that shaped the world we see it today. Creative thinking isn’t problem solving. It’s the ability to generate new ideas or alternatives from nothing or by integrating two existing models or theories. The process can be pinned down to simply tackling things from a different perspective, which is actually harder than it seems because our brains have been hardwired to think in a certain way. So much so that if I remove a word from a sentence, you probably will not notice at first because your brain will automatically fill ‘in the gap’ with data that already exists. If there is one particular thing that stands out about geniuses, it is their ability to make juxtapositions between similar subjects—a facility to connect the unconnected enables them to see things to which others are blind. If we look at some of the greatest minds, what they did best was to force relationships: · Leonardo da Vinci forced a relationship between the sound of a bell and the ripples a pebble makes when hitting water, to connect that sound travels in waves. · Nikola Tesla forced a connection between a setting sun and a motor that resulted in the modern day AC motor. · Albert Einstein did not invent the concepts of mass, energy or speed of light
but forced them together to come up with the equation E=mc2. I was once said that, “imagination is our greatest renewable resource and one that cannot be outsourced”. There can be no truer statement. Our imagination allows us to remove every conceivable boundary and
or overreaction. Or, when we are happy, there is a positive pattern of events. Trying to re-programme the end result isn’t possible. But, if we can understand our triggers, we would have unlocked the ability to transition to the ideal state of mind—the birthplace of creativity.
Creativity is an application of imagination by which we push our limits and overcome adversity. ask the most powerful question: What if? Creativity is nothing but an application of imagination. It is the process by which we push our limits, remove boundaries, overcome adversity and rediscover our sense of awe. In business terms, it’s how we come up with perfect strategies, brilliant innovations, world-class marketing ideas and unbeatable formulae for success. But, first, one needs to unlock the power of possibility by removing the imaginary limitations we have created. Up until now, I have given you examples of geniuses who managed to “innovate” two opposing ideas into one. Needless to say, this is easier said than done mainly because our emotions might cloud our judgment and prevent us from actually determining the salient points critical to the development of the idea and choosing the best ideas to pursue. This is where EI comes in. Essentially, EI is the capacity to recognise our own feelings and those of others, manage those feelings, and learn to motivate ourselves. To me, EI is the foundation of all learning. Everything we do stems from a thought, which invokes a feeling, that in turn, triggers off a sequence of events. The end result of each specific emotion, although unique in each individual, is set and ingrained into our personality very early. Emotional triggers always set off a sequence of events—the end result of which is the same. For example, when we are angry, it’s likely that our subsequent actions are driven by aggression
Our world is overflowing with ideas. Grasping them is a faculty of our conscious mind but the ability to synergise them into something new and creative is a faculty of the subconscious mind. EI is the key to transporting the mind to a place where our conscious thoughts and deliberations can merge. Thomas Edison, the inventor of the light bulb, had a brilliant method of transitioning between consciousness and subconsciousness. He would sit in what he referred to as his “thinking chair” with a metal ball in his hand. On the floor directly beneath his hand, he would place a metal pan. Edison would then allow his body and mind to completely relax. At some point between consciousness and subconsciousness, his hand muscles would relax involuntarily, allowing the metal ball to fall onto the metal pan. He would then wake up and note down whatever he was thinking about. This process allowed him to activate and create thoughts that were unhindered by his conscious mind. Creativity is the future of business. Being able to understand the demands of your environment and to successfully compensate for them in your industry will ultimately steer your business to the pinnacle of your industry. You can be a market leader through the process of integrative thinking and emotional intelligence, because the next big thing in business is going to be a combination of two existing ideas. april/May 2012 | INC. | 17
“This award is special because I used to read about it in college, and when I started the company. Now, I have it.” Vijay Shekhar Sharma chairman and managing director One97 Communications
“The strength of the Indian economy during the global recession has been the SME sector, and Inc. India has taken the right direction towards recognising these companies.” Amarjit Singh chairman and managing director AG Aerovision
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“It is a big motivating factor to work even harder in the coming times because you want your name to be listed every year.” Vikas Garg director, Vikas Global One
“It is indeed a proud moment for the entire BS team to be honoured with the Inc. India 500 Award.” Rajesh Agarwal managing director, BS TransComm
“Inc. India 500 is a definitive ranking of the best-performing corporates in the country today.” B. Venkatramana, executive director, VMC Systems
“It’s an amazing feeling to be a part of ‘The List’. It’s a huge confidence building measure for our customers and employees.” Pankaj Ratra director, Path Infotech
april/May 2012 | INC. | 19
Journey of Inc. India 500
Inc. India 500 is a toast to the emerging order of the new India Inc. It celebrates the stellar contribution of the underserved and under-recognised mid-sized community in India. The annual Inc. India 500 ranking is a testimony to heroic journeys and winning performances by the hidden gems and rising superstars of our business landscape.
Story The galaxy of winners gathered at Assocham House for the award ceremony
30 year old legacy
Inc. India 500 is an offshoot of the annual Inc. 500 Awards which were established in 1982 to identify fast-growing american COMPANIES
Sanjeev Bikhchandani, vice chairman, InfoEdge and Pramath Raj Sinha, MD, 9.9 Media, honouring the winners
iconic winners Amarjit Singh, managing director, A G Aerovision with his wife and daughter
Past honourees of the inc. 500 include founders of companies like Microsoft, Oracle, SAS and domino’s Pizza
The Methodology SALUTING INDIAN ICONS
Only three years old, The Inc. India 500 Club is already a window to india’s iconic leaders and future superstars
2 0 | INC. | april/May 2012
3,500 companies across 35 sectors made their way to public unlisted companies and privately-held busines group turnover exceeds `1,500 crore. These companie the following: Digital presence: Each company was subjectively and availability of company information online. Leadership: The leadership was assessed on inform information on top management is regarded as “not k Year of incorporation and line of business After this subjective assessment, we assessed net sal the compound annual growth rates (CAGR) of net sal companies, 200 unlisted public companies and 100
y Through Pictures
o a master list—one each for public listed companies, sses. We excluded BFSIs, PSUs and companies whose ies were then assessed by Inc. India’s research team on
y assessed on a scale of 1 to 5 on company website
mation available online. In this digital world, absence of keeping up with the Joneses”, and hence penalised.
ales data of the last four financial years, and calculated les. The final Inc. India 500 consists of 200 listed 0 privately-held businesses.
Stand-up comedian Nitin Gupta gives the winners much to laugh about
Shreyasi Singh, managing editor, Inc. India, addressing the gathering
Anuradha Das Mathur, publisher, Inc. India, talking to the guests
Resources For more about the third annual Inc. India 500 Awards, visit the below link: http://www.growthinstitute. in:81/incindia500/ For photographs:
http://tiny.cc/ovp3aw
2012
REGISTRATION OPEN!
Our annual exercise begins in April 2012. The rankings are out every year in our special September-October double issue. Don’t miss the chance to register your company!
Please get in touch with Rajat Gupta at rajat.gupta@9dot9.in or at 0120-4010914 Remove photograph along dotted Line
imaging by Peterson
Your Business Toolbox
The Goods
Reeling Them In Tools to engage customers online A lot of business owners are focussed on interacting with customers on social networks. But how about your plain old company website? These new tools offer innovative ways to engage people who visit your site—and to keep them coming back. —Abram Brown
launchrock
Intercom
punchtab
Olark
Best For: Building Buzz
Best For: A personal touch
Best For: Rewarding loyalty
Best For: chatting
Looking to generate some prelaunch excitement? This service helps you create a Coming Soon page for your website. After creating an account on LaunchRock.com, select a background design or upload your own, then add information about your business. A box will appear on the homepage encouraging people to sign up to receive e-mails with company news and earn incentives for spreading the word via e-mail or on Facebook, Tumblr, Twitter, and other websites. Go to your LaunchRock dashboard to track a variety of information, including daily sign-ups and page views. cost: Free
When people register on your website, Intercom adds their information to an online database, along with information culled from social networks and other websites. You can sign on to your Intercom dashboard to view user profiles and see when they signed up and the last time they visited. Then, you can compose messages for specific people and the notes will pop up automatically the next time they come to the site. On your dashboard, you can see a list of open replies and respond to them. Intercom rates the strength of your relationships based on how often you interact with visitors. cost: Free during beta testing
PunchTab’s loyalty programme lets you reward people for coming to your website every day, making comments, and sharing your content on social networks. After you set up the programme using a wizard, visitors can click on a Rewards ribbon on your homepage and log in to earn points, which they can redeem for gift cards in a PunchTab catalogue on your site. You can use PunchTab’s standard rewards guidelines— for instance, the service recommends doling out 100 points for each visit—or create your own. Log on to PunchTab.com to check out user profiles and leaderboards. cost: Free for a standard programme with up to 10,000 users
This service makes it easy to add a web chat function to your site. After pasting in a line of code, go to your Olark account to choose a design and size for the chat box, stipulate where it should appear, and link it to an instant-messaging program. You can also customise a welcome message and offline notification. When customers click on the box, a message opens in your IM program, where the chat takes place. You can view transcripts on Olark.com and export them to customer relationship management programmesincluding Salesforce. cost: Starting at $17 a month for one user
ILLUSTRATIONs by Shigil N
april/May 2012 | INC. | 2 5
the goods
Products + Services
Away We Go New gadgets for mobile workers More people are working outside the office, whether they are on the road or at
My favourite tool for making travel plans
home in their pajamas. Here are five new products designed to make mobile workers more productive. —John Brandon A
jake kloberdanz founder and ceo onehope irvine, california
My company does branding and marketing for different causes, including autism and AIDS awareness, and I travel often to meet with investors, partners, and celebrities. When I’m planning trips, I don’t like relying on online reviews written by strangers. A few months ago, I started using Trippy, a free service that helps me get travel recommendations from trusted social-media contacts. Here’s how it works: Before a trip, I log on to Trippy’s website or iPhone app and enter my destination and travel dates. The service pulls up a list of Facebook friends who are likely to know about my destination based on their profiles. Next, it prompts me to ask them for advice by sending a message to them on Facebook or writing on their Walls. My friends can click on a link in the message to enter suggestions on my Trippy account. Then, I can add the ones I like to my itinerary, which I can pull up on my iPhone as I travel. I can also share my itinerary with employees visiting the same city using Trippy’s Copy Trip feature. So far, I’ve used Trippy, which also works with LinkedIn and Twitter, to plan about 20 trips. Thanks to the service, I no longer waste time reading tonnes of anonymous reviews. Instead, I get meaningful input from a handful of people I trust. —As told to J.J. McCorvey
2 6 | INC. | april/May 2012
b
c
d
e
A. Lantronix xPrintServer
This handy 9.6-ounce device uses an Ethernet connection to find nearby printers, then lets you print documents from your iPhone or iPad. During our test, it found an HP printer in just 10 seconds, and we easily printed several e-mails, including some with complex graphics, from an iPad 2 and iPhone 4S. cost: $150 B. BiKN
BiKN’s thumb-size tags help you keep track of valuables using your iPhone. Attach them to any object and snap your phone into the BiKN case, which communicates with the tags via a radio signal. Using the myBiKN app, you can view a map on your iPhone of tagged items within a distance of several hundred feet, page them so they beep, or set an alarm to go off if a tag leaves a preset
perimeter. The tags worked perfectly during testing, sounding an alarm even when our iPhone was off. cost: Starting at $100 for one tag and an iPhone case C. HP Compaq L2311c Notebook Docking Monitor
This HP device is a laptop docking station and monitor in one. Plug in your notebook with a USB cable to connect to the 23-inch monitor, which pivots from side to side, tilts, and switches to portrait mode. The monitor has a built-in HD webcam for videoconferencing, jacks for headphones and microphones, and two ports for peripherals. cost: $319 D. Powerbag Instant Messenger
This messenger bag has a built-in rechargeable bat-
tery pack that can charge most smartphones up to four times and tablets once (sorry, no laptops). The 2.7pound bag is made from tear-resistant nylon and has a padded pouch for a tablet or laptop. It fully charged our tablet in six hours and a smartphone in one hour. cost: $180 E. Plantronics Blackwire 435
Ideal for videoconferences, this corded USB headset has two separate over-theear headphones, one of which has a noise-canceling microphone boom. You can use both earpieces for stereo sound or one for mono sound. During our test, Skype calls sounded crisp. Another plus: The headset comes with a protective travel case. cost: $100
FROM LEFT: COURTESY SUBJECT; COURTESY COMPANY (5)
Must-Haves
Products + Services
tech trends soham raninga
Does Ultra Cool=Ultra Useful? Ultrabooks are definitely in. But, are they right for you?
I wouldn’t blame you for lusting over an ultrabook. It’s curvy and slim as hell—a “size zero” right on your desktop! For those of you who didn’t know what an ultrabook is, go back and read the previous line again. That’s an ultrabook in a nutshell. Of course, it comes with a few technical advantages. But nobody buys the ultrabook for its technical prowess. In this case, external beauty is the name of the game. But, is the ultrabook the perfect weapon of choice for road warriors who want their business class notebooks to come both with great portability and performance efficiency? Let’s stack up the pros and cons.
Where they don’t… If you crave for raw performance in processing and graphics, the ultrabook doesn’t score too well. The core processing and graphics chips in these machines are tuned more towards energy efficiency, to ensure longer battery life and to control the heat generation. The ultra slim form does not allow enough room to fit the mainstream notebook platforms inside the ultrabooks. They aren’t rich in features either. Also, the slim design prevents them from having multiple ports and connectivity options that are normally found in notebooks. Typically, you’ll get two or at best three USB ports instead of the four on most notebooks. Other “standard” connectivity options like HDMI, Ethernet port, card reader aren’t a necessity in case of ultrabooks. It’s a good idea to check which ones are available in the ultrabook model you’ve chosen. Most importantly, with the current market pricing, especially in India, ultrabooks don’t give you the best value for money. Priced `50,000 and upwards, these machines are expensive in terms of a pure features + performance to price ratio. The same money can get you a notebook that is at least twice as fast, and offers all the latest features and connectivity options. But, fret not. Ultrabooks are the future of mobile computing, and will evolve rapidly— eventually catching up on the performance and features front while improving further in power efficiency. What we have now is the first generation of ultrabooks. The new models—probably out in the second half of 2012—promise to score well on all aspects. So, if you’re not in the immediate hurry to go “size zero” on your notebook, I’d suggest you hold on. It’s unlikely to be a long wait.
It’s sexy, curvy and slim as hell—a “size zero” right on your desktop.
Where Ultrabooks Score… There’s no beating the ultrabooks on portability and style. With a 13.3inch screen size, these notebooks weigh 1.2-1.7 kg—almost half the load of a standard 14 or 15-inch notebook. On thickness too, the ultrabooks, at their slim 2 cms, are half the size of regular notebooks. These dimensions allow you to travel really light. As opposed to the battery-guzzling slim, touchscreen smartphones, ultrabooks are a power-efficient lot with a battery life in the range of five to eight hours on full charge. Most average notebooks only tot up three to four hours at best. But perhaps the most significant advantage in technical terms is the storage technology used in ultrabooks. With flash memory-based solid state drives (SSDs); these machines offer zippy boot-up and data access times, robust storage (lesser chances of drives failing due to their non mechanical nature compared to regular hard disk drives) and superior power efficiency, thanks to lower operating temperatures. If those are your top traits for a good notebook, an ultrabook is definitely a good fit.
the goods
file cabinet
New ways to sync and store Once geared toward consumers, cloud-based services for storing and syncing files are now targeting business users. Here’s the skinny on two of them. —J.B. Dropbox for Teams
Like the original Dropbox, this service lets you place documents in a folder on your desktop and access them on the Dropbox site, mobile devices, and other computers linked to your account. It also offers business-friendly features, including centralised billing for multiple accounts and the ability to add and delete users. Another plus: You can store unlimited versions of files. Cost: $795 a year for five users and 1,000 GB of storage Insync
A good option for Google Docs loyalists, Insync downloads Google Docs files to a folder on your desktop so you can work on them in Microsoft Office and other programs. You can upload files to Google by dropping them in the folder. When you make changes to the files, the service updates the Google Docs version. You can also access files on other computers linked to your account and on the Insync site. The service does not have a mobile app. Cost: Insync’s service is free; Google Docs is free up to 1 GB of storage, then starts at $5 a year for 20 GB of storage april/May 2012 | INC. | 2 7
GValues, D
Compani :) workplaces you will never want to leave
2 8 | INC. | april/May 2012
What makes a business successful? Innovative ideas. Sound finances. Great strategy. But are any of these achievable without the right people? And yet, do companies value their employees enough? While it’s not difficult to find companies that lay a strong emphasis (and puts in place a rigorous screening mechanism) to find the right people, spotting companies that manage to retain their star employees over long stints is quite another story. Harder still, is to find organisations where employees feel pride in being a part of them. We found four companies who live up to this virtue at The Great Place to Work Institute, an independent agency that ranks the best companies to work for. Each of these workplaces has won an award for being a great employer, and we decided to dig deeper to zero in on the core values that make these workplaces special. Entrepreneurs running these great workplaces don’t just have flourishing balance sheets and expanding client rosters, they also feel their employees’ pulse. So, if you’re wondering why you’re having such a hard time retaining yours, even as the global market recedes, these gems may give you some pointers. A great workplace isn’t just a dream. It exists.
nies...
By Ira Swasti
april/May 2012 | INC. | 2 9
Makemytrip
Core Value: Rewards and Recognition
Don’t worry, be reward-happy Why rewards and recognition?
MakeMyTrip.com is one of India’s leading online travel companies with 20 branches across the country, and international offices in New York and San Francisco. A poster boy for India’s new-age entrepreneurship, MakeMyTrip had a blockbuster IPO debut on the Nasdaq in August 2010. But, travelling these highs wasn’t a breeze. Deep Kalra, the company’s founder and CEO, believes a great, driven team has scripted this success. Operating in a highly competitive online market for a decade, the travel giant has come to be known for its people-centric workplace—moulded by an enthusiastic rewards and recognition programme to beat competition, says Kalra. His team confesses they err on the side of over recognising employees—not just for actual achievement but even for genuine efforts to keep the work environment positive.
3 0 | INC. | april/May 2012
Good Values healthy companies
lying High F Monthly star performers brand their workstations with winning paraphernalia.
“Our honeymoon in Europe went really well. Everything worked like a clock as per the itinerary you’d provided us. It was all well planned right from the VISA and EURAIL tickets to the hotel bookings and sightseeing. A splendid effort from your end and your constant help over the phone was truly remarkable...” This was an e-mail Ankush Jamadagni sent MakeMyTrip after returning from his holiday in Europe in November 2011. But the Jamadagnis weren’t the only ones to have a great time. Their e-mail won Chandni Monga Singhal, a travel coordinator Photographs by Subhojit Paul
senior vice president, human resources. “So we create a big deal about the winners so that others would want to be a part of that elite group.” Take the Halcompany dashboard laBol award, for example. It’s a Founded in: 2000 coveted recognition, given out Turnover: monthly to sales executives `3490 crore with the highest sales for the No. of employees: month or for non-sales staff 1150 who have made a significant contribution to the organisation in their function. Apart from a big round of applause when the award is announced at the employee’s desk—the winner takes home cash rewards, a flag and some stars to brand their work stations. The HallaBol scheme is well-planned—about 10 per cent of employees in the company’s different operational regions like North, South, East, West and Gujarat get rewarded. More than the company-wide communication, the physical branding of being awarded has played a big part in making this an award employees aspire for. In fact, this focus is apparent the moment you enter MakeMyTrip’s spacious, open-plan office in Gurgaon. Employee workstations are bedecked with colourful flags, stars and certificates won as part of the wide range of R&R schemes in place here. “The cash rewards we give may not be that sig MakeMyTrip nificant but it is the feeling of being recoghas won many nised in front of peers and leaders that awards itself. It likes passing really motivates people,” she adds. on the joy. There’s an entire galaxy of rewards to choose from including the Star Performer, Star Extraordinaire and Star Leader which are all given out during the bi-annual town at MakeMyTrip, a trophy and a certificate. hall meetings—attended by everybody from Part of what is called the CustoMore Award, the CEO to the support staff. But can winthis recognition is given out to sales and cusning so many awards lead to complacency tomer service executives who receive the best and overconfidence among workers? fan (read: customer) mail each month. MakeMyTrip dismisses those concerns, It’s just one of the many reward tactics saying the winning culture has had the MakeMyTrip has put in place to motivate desired impact—increased productivity. employees to beat their targets—whether it Many winners have been nominated more is the number of transactions sealed or the than once proving they want to stay on the amount of profit made. top, points out Misra. “If you want employees to repeat good “It’s an unbelievable feeling to receive it in behaviour, you have to let them know their front of the entire organisation. It really motibehaviour was good,” says Purva Misra, vates you to be there again,” says V. Archana, a april/May 2012 | INC. | 3 1
Good Values healthy companies
senior international holiday consultant at MakeMyTrip’s Chennai office, who has won the star performer award twice. There are other recognitions with equally quirky names like the Raving Fans scheme. Here, employees keep a scorecard for the customer feedback they receive—three points for every positive one and two minus points for every negative feedback. Once they toll up 100 to 300 points, they can redeem them to buy iPods, DVD players, wrist watches or cell phones. Similarly, points from the Peer-toPeer scheme, instituted to promote teamwork can also be added up to buy these goodies. There are more exciting prizes up for the takes too—like the grand prize of a fully-paid for trip to Europe for two given to the Query Champion award (an employee who manages customer queries the best). Although CEO Deep Kalra’s involvement with these R&R initiatives has reduced over the years, several of these traditions were launched when MakeMyTrip was just a 200-people startup in 2005. Even today, Kalra sends out appreciation e-mails in troves—for business achievements like beating a sales target, and little things like sharing a good article with fellow “trippers”, as employees here call themselves. Kalra believes recognition cannot merely be performance-based. It should cover all achievements of employees from day-to-day activities to high-impact events. “You can’t over-do recognition—the more, the better,” he says. The HR department marks his e-mails to everybody in the company to demonstrate what behaviour or actions are appreciated by the senior management. Setting a high-performance, high-reward culture can lead to the proverbial corporate dog-eat-dog world. To ensure the race to achieve sales revenue and bring more business in doesn’t come at the cost of compromising the company’s values, MakeMyTrip has also introduced schemes that reward employees who demonstrate company values in their daily work. “Our recognition policies help maintain a healthy atmosphere in the competitive corporate environment reinstating a feel good, “am-part-of-it” factor,” says founder and CEO Deep Kalra. Clearly, MakeMyTrip has worked out a formula where everybody wins—and that too, all the time! 3 2 | INC. | april/May 2012
Cactus Communications
Core Value: Diversity
Good Values healthy companies
Great minds think alike. Happily, that’s not true here Why diversity?
With more than 30,000 clients across 93 countries, it was important for Cactus Communications to employ a workforce that was truly global. “Our markets are such that we needed to localise and get natives from client countries to understand different perspectives and deliver services that lived up to client expectations,” says Anurag Goel, the company’s co-founder and CEO. Cactus Communications provides services such as academic editing, translation and research writing. The company has offices in five countries but its head office in Mumbai best reflects this global texture—as seven nationalities make up its workforce. The benefits are as easily tabulated. “The quality of solutions that come up during problem-solving sessions would not have been the same if we’d adopted a single-minded approach,” explains Goel. When Ai Kanoh flew from Japan to Cactus for the first time in
United Colours of Hiring Cactus Communications’ Mumbai office has team members from seven different countries. It’s made their workplace a fascinating crucible for exchange of ideas and perspectives.
Photographs by Jiten gandhi
2007: “almost ten people came to greet me and gave me their contact numbers for emergency”, she recalls. Kanoh is senior marketing manager (Japan) at Cactus, and has been working in its main office in Mumbai for the past five years. Despite a Cactus office in Japan, Kanoh opted to work in Mumbai, to experience the diversity and open culture that she “wouldn’t find in Japan”. “Here, I not only feel like I’m being listened to and treated equally irrespective of my nationality or gender, but I also feel accepted and appreciated for the person I am,” she says. She’s one of the 237 full-time employees at Cactus Communications, who belong to seven nationalities, and work in tandem april/May 2012 | INC. | 3 3
Good Values healthy companies
company
dashboard with 500-odd freelancers from 40 countries around grammes. In the Mumbai office, for example, each Founded in: 2002 the globe (from Israel to New Zealand) and deal international Cactizen is assigned an Indian Turnover: with several international clients every day. “buddy” who helps them ease into the country— Undisclosed Managing such a diverse group of individuals teaching them to take a bus or a local train, helping No. of employees: 237 is unlikely to be an easy task, and one usually them set up their company apartments or taking ignored by corporates. Usually, the workforce is them out to popular hang-outs in the city. To make treated as a homogenous mix of people believed to this relationship non-work in essence, the company have similar goals and working styles. As a result, innovamakes sure this buddy does not belong to the same team. tive solutions that can often only emerge from contrasting viewBoth the holiday and cafeteria lists are multi-cultural too. points are lost to the organisation. The office pantry menu was fixed through a survey among all But not at Cactus. Here, the approach towards diversity has employees, and the company follows an open holiday policy. evolved with the size of the workforce. During the early years of There are no fixed offs even for Diwali or Christmas. A Korean the company, the organisation was founder-driven with a small employee can opt to take his/her allotted leaves for the Korean team of 25. The well-travelled Goel—he studied at the Wharton New Year, an Indian on August 15, and anyone can choose to School, the University of Pennsylvania, and then worked in take a day off on his/her birthday. Amsterdam for McKinsey & Co.—would personally mentor and Communicating with team mates in such a diverse train his people on cultural nuances. workplace has its own challenges though, confess employees at “But as we grew from 25 to 237, we got so busy with business Cactus. Most of them don’t use their mother tongue to interact that we forgot about with each other. And the same business concepts are diversity. That is when it understood and perceived differently by different started to hurt more than nationalities. But, it’s this discomfort that leads to the best help,” he says. Since its ideas. “It may take longer to put your point forward but the inception in 2002, Cactus trade-off is that about a hundred ideas bounce off in our Communications has brainstorming sessions,” says Igor Rodrigues, Cactus’ spread to six offices marketing manager. “It forces you to think out of the box as across five countries. you deal with a variety of international clients.” This Nobody really felt at smartly-planned freedom has also led to key business home though. The Interbenefits. Since the diversity initiatives were introduced, national Cactizens or ICs the average tenure of an IC in India has gone up from one (as non-Indian employees to more than two-and-a-half years, according to Gupta. are called here) felt Beyond nationalities, Cactus has mixed a wide range of neglected—an outsider in employee professions an Indian company. And, into its melting pot. As Indian employees an academic editing “Cactus doesn’t have believed company policies were tilted towards the Japanese company, it has any one culture, not because a majority of Cactus’ clients were from Japan. key eligibility even Indian. It’s “We were losing a lot of knowledge with our International requirements—good Cactizens. Their average tenure in India had reduced to about written English skills, international.” a year,” says Susanne Gupta, associate vice president, HR. This knowledge of your —Ai Kanoh Cactus employee diversity was imperative to Cactus because of its global base, subject and the right and because clients felt reassured when they knew somebody mix of the company’s from their country worked in the company, who could be an six cultural values important communication bridge. (integrity, trust, innovation, excellence, communication and fun.) In 2007, Goel and his team put diversity at the forefront of So, there are doctors, engineers, teachers, accountants and web company initiatives. Posters and banners extolled their designers working together in the same function, unlike say, only philosophy—“Seven nations. Seven religions. Many accountants working together in finance. Any Cactus team then Professions. One common thread” to celebrate this focus. is a great blend of different skills, mindsets and working styles There were weekly quizzes on the company intranet to educate which both balance out and complement each other—say, people about various cultures. creativity and subjectivity from literature and art graduates “A diverse workforce keeps the environment dynamic and meeting analytical viewpoints put forward by mathematicians exciting and we wanted to nurture that,” explains Gupta. and engineers. “Working with different kinds of employees Injecting diversity into the workforce cannot be a stand-alone teaches you to customise your communication, says CEO Goel. activity. At Cactus, it’s backed by supporting policies and pro“You pick up ways to talk to different kinds of clients.”
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Good Values healthy companies
BrickRed
Core Value: Feedback Listening Hard Employees often find their suggestions turn into actions at BrickRed. A game room, for instance.
Where the suggestion box never goes empty Why feedback?
BrickRed designs offshore strategies for ISVs and software-enabled companies. Since its merger with Inc. 500 winner Three Pillar in August 2011, it has grown to a strength of 550 employees across five countries. Even amidst such big changes, some things have remained the same at the newly-minted BrickRedThree Pillar entity, such as continuous, honest feedback. Integrated into the company’s DNA since its inception in 2002, Raj Singhal, one of BrickRed’s four co-founders, says their feedback mechanism has now become structured to keep in pace with a larger employee base. Employees are an extension of a company’s client base, and must be treated as a vital group for feedback, he adds. “They help us identify our strengths as a company—qualities we can market better—and point out the weaknesses we need to improve upon.” Photographs by subhojit paul
Hotel baron J.W. Marriott used to say,
“The seven most important words in business are…‘I don’t know. What do you think?’” It’s a question BrickRed, a Noidaheadquartered software outsourcing firm, has asked its employees a lot since it was founded in 2002. Feedback is serious business at BrickRed. The company has put in place a april/May 2012 | INC. | 3 5
Good Values healthy companies
his pool table was installed in T BrickRed’s Noida office on an employee suggestion. The BrickRed cafeteria decked with wall posters that urge employees not to waste food.
continuous, buzzing system to capture employee thoughts and ideas. They are asked for feedback—on issues as big as their overall compensation and appraisal methods to ideas on small, everyday concerns like their workstations—not just once a year, or once every quarter, but a number of times in between. Merely getting feedback isn’t enough though. BrickRed has closed the feedback-action loop by ensuring that the ideas they’ve
where employees are asked to assess how “engaged” they feel with the company and how satisfied they are working for it. As part of its 2011 Engagement Study, BrickRed found that employees gave its performance appraisal systems lowest marks (86 %). The management got to work, and came up instead with a matrix-model to measure people’s performance which minimised the subjectivity in the process. “Because it’s a less subjective appraisal system, employees perceive it as more fair and transparent. The fact that the ideas come from them helps build trust too,” says Rakesh Arora, vice president, human resources. Apart from the annual engagement study, there is also an all-hands open meeting every quarter in BrickRed’s Noida office. At these allhands meeting, all employees come together to get a low down on everything that is happening, and raise issues that concern them. Employees just need to raise their hands to bring up an issue. Every concern raised is discussed and debated before the senior management
“Employees feel more engaged when they see the company cares about things that matter to them, even if they are small issues.” sought are translated into change. Teams are formed to take corrective actions on the insights thrown up, and employees are kept up-to-speed with how the issues they raised are being resolved. Sample the company’s engagement study, for instance. Much like what large corporates do with their brands, BrickRed conducts an engagement study annually, 3 6 | INC. | april/May 2012
present there. These concerns are then divided into three action-plan categories— immediate attention, to be resolved within a month, and those that will take longer than even a quarter to address. Timelines are subsequently set to work out solutions. And, the scorecard reads pretty well. “I had once asked the management team to install a pool table and some play station games. And, it was done,” says solution architect and ardent gamer, Nitin Gupta. Employees feel more engaged when they see the company cares about things that matter to them. When their feedback is taken seriously and acted upon, a high level of trust and confidence is established between employees and the management, believes Raj Singhal, one of the company’s four co-founders. Plus, it’s a fundamental tool for improvement. “It’s difficult to say feedback would have reduced the attrition but the feedback process has certainly helped us act on some possible reasons of attrition,” he says. The company is currently in the midst of its most ambitious feedback project till date. Grandly titled Mission 2012, this two-year campaign began in 2010 with an
Good Values healthy companies
BrickRed employees wanted a gym—and they got it.
The nap room where people can doze off after lunch, another employee idea taken up.
all-hands session. Each employee was asked what BrickRed should be like, or look like in two years. Areas that needed improvement were focused on. Once again, ideas were divided into three categories—committed (suggestions that the organisation was committed to implementing within a specific time line), tentative (suggestions that were dependent on certain conditions being met) and rejected (suggestions that could not be implemented whatsoever). In case of the last category, reasons for rejecting those suggestions were comprehensively discussed and clarified with employees so that they know they got a fair hearing. All committed and tentative changes suggested were assigned to teams that were formed to tackle each of these tasks. Teams were given deadlines to meet, and the master deadline was set for December 2012. Apart from quarterly updates on the progress made, every fact and figure of the change process was documented on a dashboard on the office intranet to help employees keep track of what was going on. “The reporting pattern was practically reversed—instead of people reporting to
going waste was brought down from 40 managers, managers were now reporting kgs a month to 5 kgs, says Arora. to people for all assignments given to He believes these initiatives have them,” explains Arora. ensured that their employees stay with A lot—policy issues, infrastructural them longer. “People stick to the obstacles and conveniences offered—has organisation because they want to see how been already achieved as part of Mission the problems they had raised are solved. 2012. For example, many employees That’s an investment they’ve made in wanted a speed breaker to be built outBrickRed,” he stresses. side the Noida office because the office But is it possible that too much feedwas situated at a crossroad and people back may sometimes prove to be found it difficult to cross the road. counter-productive as Within three months, the speed company employees tire of the probreaker was constructed after dashboard cess, and lose interest? It taking the requisite municipal Founded in: 2002 Turnover: surely doesn’t look that authority permissions and `36 crore way, so far. The citizens of building clearances. No. of employees: 550 BrickRed seem to enjoy Employees had also raised being listened to, and are concerns about the amount of food already looking forward to an that would go to waste in the office encore. “I’d like Mission 2015 to get off canteen every day. The team that was put in place to reduce food wastage launched a the ground next year,” says Prateek Sharma, a senior tech lead and cricket powerful, activist-genre communications campaign to bring about change. Large buff at BrickRed, who marshalled the posters—asking provocative questions like management to build a company cricket “how many people in the world don’t get team some two years back. “We have a lot one meal a day”—were put up strategically of new issues to take up,” he says. Someon the cafeteria walls to urge people to times, there can really never be too much introspect. Within five months, the food of a good thing. april/May 2012 | INC. | 3 7
claris lifesciences
Core Value: Personal Touch
Family Bonding Claris’ HR manager Maulik Patel sharing a joke with an employee and his familiy.
It’s all about loving your family Why the personal touch?
Family buy-in is an integral component of the career decisions an individual takes. Sometimes, people change jobs, or move cities for their loved ones. It’s a realisation that Arjun Handa, the CEO of Claris Lifesciences, a pharmaceutical company, encountered head-on in 2002-03. During one-on-one appraisal sessions with several of his 600-odd employees at that time, Handa was surprised to find several of them confessing that they were ready to work hard and build their careers in his company but their families believed they were stunting their growth by staying on in one job for too long. “Families often question why an employee works so hard, and if they do, they should capitalise on that and jump salaries and designations every few years,” says Handa. It was a learning key to Claris’ growth, felt Handa. So, over the last 10 years, the company’s management has deployed the soft power of familial bonds.
3 8 | INC. | april/May 2012
Photograph by Suresh Mistry
Good Values healthy companies
photo Courtesy subject
In this age of collaborative leadership and talent
us for a job that might pay `20,000 or 30,000 more but crunch, employees must be aligned with company will not have this support from the company,” MacFounded in: 1999 goals to achieve better business results. But, Claris wan says confidently. Turnover: Lifesciences, the Ahmedabad-based manufacturer of When conventional logic is that the personal and `738.7 crore No. of employees: generic drugs believes getting through to employees is professional must never mix, is the Claris method an 1330 just the first step. To really have an engaged and overkill? Arjun Handa, the 33-year-old CEO, waves involved workforce, you need to get through to the away such management gyaan. With rapid strides in employees’ families. technology, and the all-pervasive BlackBerry or iPhone, peoHere, that bonding begins even before a new recruit joins the ple spend more and more time “at work”. Often, it’s at the cost of company. Families of potential employees are invited to spend a eating into an individual’s personal life. “So we try to help families day with the HR team in Claris’ 78-acre campus in Ahmedabad share a little bit of their loved ones’ work lives to compensate for (that houses their five manufacturing plants) to get a sense of the that,” Handa elaborates. company’s values, facilities and work processes. “We want the His insights seem to be spot-on. Every quarter, Claris organfamily to experience first-hand the life and the work their ises an optional factory visit for employees and their families. spouse, son or daughter is likely to have at our company,” says Groups are invited turn by turn, and the turnout is usually a Denis Macwan, manager, human resources. After a meal at their whopping 95 per cent, according to the company. canteen, the family Families of the nearly 400 senior employees are also invited to is taken on a city all major company events such as the Uttarayan kite flying festival CEO Arjun Handa (wearing the tour of Ahmedcelebrated on campus, or the garbha and dandiya nights during hat) flying kites with families abad—to visit the Navratri. On the company’s foundation day, the families’ achieveduring the Uttarayan festival. Akshardham temments—a new PhD degree earned by the spouse, academic excelple, Sabarmati Ashlence of the daughter or other positive developments—are ram or go shopping celebrated with gifts and awards.“There are three things employees for Gujarati bandlook for at the workplace—job security, a sense of belonging and a hani—especially good trajectory for their careers in the company,” says Handa. “By when the candidate including the family, we create that sense of belonging.” is busy in interClaris also adeptly channels the goodwill created. The comviews. “This initial pany has market presence in over across 91 countries, and before relationship builds every international audit, the senior leadership team visits temtrust. Usually, fami- ples to pray. Families are encouraged and invited to join in. After lies are more than a successful audit, the Claris HR team sends thank-you letters happy and supporthome with a box of sweets as a token of gratitude. ive of the candiThere are other business benefits as well—including a thriving date’s decision to employee referral scheme called Family First that was introduced in join the company,” 2010. Unlike other corporates where husband-wife teams, or blood Macwan adds. relations are discouraged to work in the same office, employees at But factory visits Claris can refer members of their immediate family—wife, siblings are just a beginning and children—for job openings. It’s a win-win situation, says Macwan, of the company’s as the company gets access to good talent, builds better relationships efforts to interact with families of employees. Once a new employee with employees, and families find it convenient to work in the same joins, and moves base to Ahmedabad, the company helps them set- workplace as their loved ones. tle in by looking for apartments in the right locality, providing Dhara Makadia is a good example. Her husband has been workguidance on school admissions, and helping spouses who’ve ing in Claris since April 2006. He referred her, and it’s been a year uprooted themselves to find new jobs. since she was hired as an officer in the process quality assurance N Kumari, deputy general manager, was apprehensive about department. “I knew a lot about the company already, thanks to the shifting base from Delhi to Ahmedabad to join Claris six months regular company events I attended over the years. Now, I plan to back. But the company pitched in with loads of help, she refer my sister for a job,” she says. To prevent any bias or favouritism says.“They were with me till we finalised the accommodation and at the workplace, the company ensures relatives are not placed in my children got admission in school.” the same team or function. And to keep the selection process fair, These issues greatly impact employee productivity at work. they have to go through the same rigourous screening as everyone When people have personal problems, they can’t concentrate. else. As a result, around 12 out of 45 referrerals have been recruited Beyond aiding productivity, the connections established this way so far and the HR team hopes more would join the ranks soon. Yes, are a powerful anti-attrition tool. “People think twice before leaving it’s all in the family for Claris Lifesciences. company dashboard
april/May 2012 | INC. | 3 9
HOW I DID IT
Ramakrishna Karuturi Sweet Smell of Success
Entrepreneurship runs in my blood. My father, Surya Rao Karuturi, was a first-generation entrepreneur who started as a small rice trader, went on to become a large-scale farmer and eventually became a manufacturer of cable and transmission towers. While growing up in Bengaluru, I was greatly influenced by him. His foresight and never-say-die attitude have been my inspiration all along. I always knew I would join the family business. After graduating in mechanical engineering from Bangalore University in 1988, I went to Case Western Reserve University in the US to pursue an MBA. Back to India in 1990, I joined the business as technical director. It was a great experience; I was young and full of dreams. I really worked hard at Deepak Cables (India) Ltd, the familyowned power transmission towers business. Entering into the Far-Eastern market was one of the decisions I took there. Chancing upon a rose garden was a serendipitous moment for me.
After working at Deepak Cables for four years, I had started feeling the need to do something else. I took a break and visited Israel
4 0 | INC. | april/May 2012
For Sai Ramakrishna Karuturi, life is quite literally a bed of roses as the world’s largest producer of the beautiful, red flower. A mechanical engineer by training, Karuturi began his company with `5 crore and three employees in 1994. Cut to today where just in the last quarter, Karuturi Global’s revenues were `633 crore. The company produces 650 million rose stems annually and exports 1.5 million every day, mostly from their farms in Ethiopia and Kenya. Now, Karuturi is hoping his new focus—agriculture—will reap even greater harvests. He’s acquired vast tracts of land in Africa, and aims to produce three million tonnes of food annually by 2020.
as told to Meenakshi Kumar photograph by s.Radhakrishna
The Perfect Stem Ramakrishna Karuturi believes glory comes with ambition, and being “perennially paranoid�.
how I did it
to explore new transmission tower business opportunities. For some time, I had wanted to build greenhouses so that we could combine our power tower business with our large agricultural assets. I was not prepared for what was going to come next. When I went to see greenhouses in Israel, I was struck by the variety of roses being cultivated. It was a fascinating sight, and I couldn’t get it out of my mind even after I returned home from that trip. I was so struck by it that I decided to take up rose cultivation in India. I spent nearly one-and-a-half years just researching how to grow roses. My family was sceptical. They thought it was a momentary fancy and would soon pass. But I was certain that I wanted to be in the business of roses. I was in love with
aged to cut costs by almost 30 per cent because of that. We were the lowest cost farm in Bengaluru when we set up. Unlike other farms in the area, we didn’t have too many fancy equipment or high overhead costs. We were producing roses with limited resources at a very low price. In fact, when the vice president of a bank visited our farm, he called it “primitive”. I wasn’t offended. It was a compliment. I dreamt really big. In the mid-90s, the flower export market was in the early stages. We didn’t have the wherewithal to compete with the international market and nobody expected that India could be successful one day. But I had a gut feeling that we could be big. I knew it was about hanging in there. We began to expand. Between 1996-2000, we developed Singa-
“Even today, I cannot forget the day when I saw a Boeing 737, take off from Bengaluru airport with our homegrown roses. It was surreal, almost.” them and nothing could stop me from fulfilling my dream. At that point I didn’t think how it would turn out or whether I would succeed at all. Our cultivation beginnings were humble. I acquired 18.6 acres of land outside Bengaluru and started growing roses on it. Karuturi Floritech was incorporated in 1994 and was renamed Karuturi Global in 2004, when we entered Africa. I invested `5 crore, part of which was loaned from a bank. Our turnover was in the range of `2-3 crore in the first year itself. I had grown nine varieties of roses. At that time, most other cultivators were importing roses from Netherlands, because of which the costs were high. Our roses were all homegrown, and we man-
4 2 | INC. | april/May 2012
pore, Australia, Middle-East and Japan as our markets. These were not traditionally on the radar of big flower cultivators but it was a good time to go global and tap these markets. Markets across the world were on an upswing and people were spending more. We were successful in most markets we entered other than South Africa. That didn’t work though—somehow we didn’t find too many buyers in the South African market. It’s not like business was a bed of roses. Yes, we were growing but we faced our share of challenges. Ironically, we found success in these challenges. In February 1999, just before Valentine’s Day, the flight taking our roses to Europe was cancelled. Other local rose cultivators panicked and
sold their produce at whatever price they could fetch. I bought all their roses, negotiated for a flight to Europe from Chennai and sent the consignment of roses by road to Chennai. I had bought the flowers for `4 per piece and sold them on Valentine’s Day for `48 per stem. Similarly, in 200708, when Kenya erupted in violence and it was tough to find labour for the farms, I refused to abandon my operations. Instead I continued with rose cultivation, exporting nearly a million roses annually. I provided housing, food and blankets to over 6,000 labourers and children in schools and hospitals that were part of the company’s complex. By 2000, I had set up the Indian market, and
was doing well in other global markets. Our turnover now was `12-13 crore. Around then, I managed a personal coup of sorts. I started a chartered flight from Bengaluru which began flying out roses to Amsterdam. It was a major decision for us. We were still small players in the business but it meant a lot to me. Even today, I cannot forget the day when I saw a Boeing 737 take off from Bengaluru airport with our homegrown roses. It was surreal, almost. It marked a turning point in the business. Today, we operate several chartered flights every week to ship our roses to Netherlands, the hub of Europe’s flower business.
Things were going fine with the business. But, slowly, it was clear that the biggest threat to our business was competition from Africa. My best people started leaving for cultivators in Africa. Sometime in 2004, an employee of mine, and somebody I consider a guru, told me I should look at Africa as a potential base for rose cultivation. He had left Karuturi to work for an African company. I laughed off his suggestions at first. But later as we were driving to our farm outside Bengaluru, he kept at it. And, the facts he listed—high yield of roses and high profits—were astounding. I was stunned by the potential for what Africa could do for us. I immediately turned back to Bengaluru and booked myself on the first available flight to Africa.
how I did it
“I’m very competitive. In hindsight, being perennially paranoid has helped.”
Blooming Profits Going to Africa—and buying tracts of land to produce roses in Ethiopia and Kenya—was the main turning point for Karuturi Global.
It was the second turning point for Karu-
turi Global. Once there, I discovered how they were miles ahead of us. Their air freight was cheaper; they had duty-free access to Europe and were shipping roses round the year. Their scale of operations was phenomenal. On the other hand, we were playing to the seasons. We moved from one season to another, from one country to another. We were moving between six markets in a year and as a result, there was no stickiness with the brand. That made me enter the Africa market. By then, I knew what I wanted. I had to be the rose grower for the world.
photo Courtesy subject
A bit of prudence and pragmatism paid. It
wasn’t easy to break into a world inhabited by seasoned players. The African growers saw me as a Johnny-come-lately breaking into their stronghold. I decided against going to Kenya, where all the major rose growers were. Instead, I went to Ethiopia where the government was offering free land and cheaper air freights. Once we got a foothold in the African
market, we bought large farms in Kenya. We bought 188 hectares for $67 million in Kenya to take on the global competition. In the last seven years, we have grown to become the world’s largest producer of cut roses with an annual production of 650 million stems. We export 1.5 million roses every day. I don’t have much of an appetite for tak-
ing risks. People tell me that I took risks when I decided to set up farms in Africa. But I don’t see it that way. I felt that I was going into a market where my overhead costs would be much less and I would gain access to the world market. I am not scared of perceived risks but of actual ones. Business can throw up some very tough times. For example, last year, we lost our maize crop and incurred a loss of $15 million due to flash floods in Ethiopia. You have to take it in your stride. I’ve always believed that when it’s high tide, you’ve got to sail and when the tide is low, you’ve got to make sure that you don’t get sand-banked.
Most of all, it’s important to look
after one’s employees. I started with only three. Today, there are 10,000 across our offices in Africa, India, Holland and Dubai. Soon, we are looking at increasing that to 25,000. Essentially, everybody is a human being first and so it’s important to relate to them at that level. There’s nothing that a smile can’t solve.
Over the last year or so, I realised there aren’t too many peaks left to conquer in the rose business. I have diversified into agriculture. We have leased 3,000 sq km land in Ethiopia and are growing rice, maize, sugarcane and palm oil. In total, we have 100,000 hectares of land in Africa. By 2014, I plan to acquire a million hectares. And, produce three million tonnes of food by 2020. My vision is to help convert Africa into the food basket of the world Expanding in India is also a priority. We started a food processing business plant at Tumkur, 85 kms from Bengaluru. It has a capacity of 6,000 tonnes per annum and we are processing and bottling gherkins for exports to Europe and the US. I hope to be a substantial player in the global gherkin market soon. We’ve have acquired a flower retail chain Florista and renamed it Flower Express. We operate 25 stores across India, and are in the process of opening 50 more. In addition, we have entered into a public-private partnership with the government of Karnataka to manage 1,500 acres of farmland for a long-term lease to grow vegetables for its captive consumption. As an entrepreneur, you can’t let yourself
perish. You have to be at it—that’s my sole philosophy. When things get really tough, they egg you on to be better and more successful. I’m very competitive that way. In hindsight, being perennially paranoid has helped. It’s that level of passion you bring to what you do that I think differentiates the successful from the also-rans. april/May 2012 | INC. | 4 3
The Motivati on M atrix Why people start businesses, what they want out of the entrepreneurial life, and how their values change over time
Men
Autonomy
The No. 1, definitive motivation for entrepreneurs of all ages and both genders. The only distinction is between the independent and the fiercely independent. In general, the motivations of company founders change less over time than do the motivations of other professionals. Not surprisingly, founders’ motivations are also the inverse of non-entrepreneurs’.
Financial Gain
Men see money as a symbol of success, though money matters less as they age— perhaps because they already have enough of it. Women want to be independent and powerful but don’t care as much about getting rich.
4 4 | INC. | april/May 2012
Altruism
20s
30s
40s +
Au Autonomy
Au Autonomy
Au
Pi
Pi
Pi
Mp
Mp Managing People
Altruism
Fg
Fg
V
Power and Influence
Managing People
Financial Gain
Power and Influence
Financial Gain
Autonomy
Altruism is more important to men later in life, perhaps as they begin to consider their legacies. By their 40s, men are willing to sacrifice money for the chance to be of service to others. After two decades focused on financial gain, they may also be satisfied with what they have amassed.
Power and Influence
A Variety
Variety
Variety grows more important as older entrepreneurs— male and female— graduate from constantly fighting fires and begin to recognise the myriad opportunities to sculpt their roles within their businesses.
Ask entrepreneurs ABOUT their companies, and they answer with alacrity and specificity. Ask why they wanted to start those companies, and they grow vague: “It’s in my DNA.” “I have a passion for it.” “No one else would hire me.” But entrepreneurs’ true motivations are more nuanced than that. They are also important. Founders who understand what matters most to them are more likely to create ventures that satisfy them emotionally as well as materially, according to Noam Wasserman, an associate professor at Harvard Business School. “One of the key things about entrepreneurs is that they have far more potential to make decisions with both head and heart,” says Wasserman. “When you’re taking the world on your shoul-
ders, you have to ask yourself, Why am I doing this? If you only listen to your head, the decisions you make at every fork in the road can drive you farther from your personal promised land.” Wasserman’s book The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup will be published this month. Based on his popular Harvard Business School class, Founders’ Dilemmas, the book helps aspiring entrepreneurs think through the crucial decisions about when and how to launch. It also urges people already running businesses to conduct a little soul searching about what they want from the experience. Wasserman and Timothy Butler, senior fellow and director of career development programmes at Harvard Business School,
Women Power and Influence
Entrepreneurs care almost as much about being the boss as about not having a boss. They want to be leaders. The exception is older women, who may feel they have already proved themselves and are looking for ways to make the work itself more meaningful.
20s
30s
40s +
Au Autonomy
Au
Au
Pi
Pi Power and Influence
Intellectual Challenge
Mp
V Variety
V
A
Altruism
A
Altruism
Power and Influence
Managing People
Young entrepreneurs may conflate managing people with another early motivation: power. As leadership experience teaches them the joys of inspiring rather than directing, their interest in pure management wanes.
Managing People
Altruism
Autonomy
Autonomy
Ic Variety
A
Intellectual Challenge
Female entrepreneurs, like their male counterparts, are often financially comfortable in their 40s, which makes room in their lives for seeking satisfaction elsewhere. Many women may have been forced to put intellectual growth on hold while they struggled to build companies and raise children at the same time.
Altruism
More so than men, women of every age view their companies as vehicles for making a difference.
april/May 2012 | INC. | 4 5
the motivation matrix
surveyed roughly 2,000 founders about their motivations. They carved out results for men and women in their 20s, 30s, and 40s-andbeyond, and compared the results with those for thousands of non-entrepreneurs who completed the same survey. Among their findings: Entrepreneurs are from Mars; non-entrepreneurs are from Venus. When respondents were asked to rank 13 motivations, entrepreneurs gave priority to things such as autonomy and power. Non-entrepreneurs, by contrast, valued security and a congenial work environment. The study also showed that motivations change with age, with women’s motivations shifting more than men’s. Theoretically, entrepreneurs who anticipate shifts in their needs can structure organisations that change along with them. Of course, human beings are driven by multiple desires, and so founders have to weigh sometimes conflicting motivations when making such crucial decisions as how much equity to take, what to delegate to the senior team, and whether to sell or stick. The motivations survey is part of a larger selfassessment tool called CareerLeader, co-developed by Butler and used by hundreds of universities and business schools around the world. You can find a modified version at www.inc. com/motivation. Use it to rank your motivations, then look to the right for Wasserman’s and Butler’s thoughts on how what makes you tick might make you act. —Leigh Buchanan 4 6 | INC. | april/May 2012
Now You Know
You’ve gone to Inc.com and gained some insight into your motivations. Here’s how to use what you’ve learnt The top-ran ked motivation s, in or der:
If your chief motivation is AUTONOMY, consider flying solo, without partners or significant investors. That may mean settling for slower growth or a smaller-scale business. A lifestyle company may be a good choice. This advice applies to founders who cherish their independence fiercely, far above such potentially conflicting motivations as FINANCIAL GAIN.
Au
If your chief motivation is POWER AND INFLUENCE, be wary of teaming up with likeminded partners. Co-founder discussions can get ugly when everyone is gunning to be CEO. Likewise, VC money jeopardises the crown. Power also comes into play when the company starts hiring senior staff. Founders say they want the best talent available, but sometimes, in areas near and dear to them, they have trouble letting people do their jobs.
Pi
If your chief motivation is MANAGING PEOPLE, prepare to feel frustrated as distance grows between you and your troops. Fortunately, this is a motivation that scales as you go from being the doer to managing the doer to managing the manager of the doer. Still, if your true love is hiring, counselling, evaluating, and rewarding, the answer may be the same as for autonomy huggers: Keep the business small.
Mp
If your chief motivation is FINANCIAL GAIN, you may have to surrender some control. It’s a consideration when bringing on co-founders or professional investors. According to Noam Wasserman, founders who retained full control of their board and CEO roles ended
Fg
up with an equity stake 52 per cent less valuable, on average, than that of those who ceded significant decision making to others. Wasserman calls the clash between AUTONOMY/POWER AND INFLUENCE and FINANCIAL GAIN the “rich versus king” dilemma. If your chief motivation is ALTRUISM, the non-profit or socially responsible routes naturally beckon. But there are also plenty of ways to scratch that itch within a traditional company. You do so whenever you base decisions first on what’s best for other people and second on what’s best for the bottom line.
A
If your chief motivation is VARIETY, the obvious decision is to start lots of companies. Alternatively, you can stick with your existing business and explore unfamiliar product lines and markets, or encourage employees to develop new ventures in-house. Variety becomes more important to entrepreneurs as they age, so consider developing a strong No. 2 whom you can trust with crucial functions if, at a later time, you find your attention wandering.
V
If your chief motivation is INTELLECTUAL CHALLENGE, then, as with VARIETY, you should seek opportunities to diversify. Even if intellectual challenge doesn’t matter much to you now, be aware that (for women, anyway) it will probably become more important later in life. So consider launching special projects related to your next generation of products or extensions of the business—projects that will give your expanding curiosity space to roam.
Ic
Hiring How to help a new hire ease in, and feel at home this page Finance Why advertising agencies in the US are investing in media and technology start-ups page 49 Leadership Achieve maximum effect through minimum means, by being an elegant leader
page 50
Design A website makeover can bring back your online
business page 52 The Way We Work Hitesh Dhingra and Amanpreet Bajaj, co-founders of LetsBuy.com, lay out their partnership formula— complementary skills and personalities. page 56
Elevator Pitch
Will investors experiment with `8 crore for Building Blocks? page 54
strategy Hiring C’mon, stay a while How to fight turnover? Create a system to help new employees find their way Over the past year, Big Fuel has seen its reve-
nue more than triple, to $40 million, and its head count swell, from 70 employees to 140. But with growth, comes growing pains. Like many start-ups, the New York City-based social-media marketing agency had never bothered with a formal orientation programme and was finding it difficult to train all these new staff members—many of whom came from disparate industries and lacked experience in social media. As a result, Big Fuel began to experience a problem it never had: employee turnover. As the churn mounted, Avi Savar, the company’s founder and chief creative officer, grew concerned that the company would lose its competitive edge when pitching clients. “It’s a matter of staying ahead of the curve,” he says. So last June, Big Fuel unveiled an onboarding process for new Illustration by Anil T
april/May 2012 | INC. | 47
strategy
hires. Here’s how the system worked for one recent hire. Step 1: Meet your colleagues Taylor VanAllen joined Big Fuel in November from PicsCliq, an online sales platform for photographers, where she managed the company’s content on Facebook, Twitter, and YouTube. She was hired as a community manager to work on Big Fuel’s T-Mobile account. VanAllen’s first day at Big Fuel began with a visit to human resources, where she met with Yashira Guzman, the company’s HR generalist. But VanAllen was quickly handed off to her new colleagues on the T-Mobile team, who walked her through the client’s current projects and explained Big Fuel’s best practices and communications processes. VanAllen, who was accustomed to the largely unstructured work environments of start-ups, appreciated the rigour of the orientation. “It helped me feel comfortable working with people from so many departments,” she says. Step 2: Back to school VanAllen’s orientation didn’t end there. Because Big Fuel’s employees come from a range of industries—from public relations to television production—they often bring vastly different approaches to social media. To get people on the same page as quickly as possible, the company developed a curriculum for new hires called Big Fuel University, which is designed to teach the company’s approaches to social media, business and client strategy, and values. In November, the curriculum was expanded to a series of 12 courses and made available online. It now includes videos from each of the company’s department heads and case studies of clients, as well as short quizzes at the end of some units. Employees go through the curriculum at their own pace; it takes most people about a week and a half to complete it. VanAllen still finds herself going back to the material during breaks in the workday. It has helped her quickly understand the workflow between departments, she says. For instance, she may work with someone from analytics or strategy to evaluate selected content on T-Mobile’s Facebook 4 8 | INC. | april/May 2012
why people leave
about how to apply Big Fuel’s three core values—humanity, innovation, and collaboration— Limited career advancement/ in the real world and ask Lack of job promotional employees about their experisecurity opportunities ences at Big Fuel. They try to Lack of keep it informal; the sessions are flexibility/ scheduling usually held off-site, at restaurants. “We’re still a people-based company,” Savar says. “We want Management/ general work to make sure the human conenvironment nection is still there.” Unsatisfied with pay and Because of the company’s benefits brisk pace of hiring, it has taken Lack of fit to job some time to get around to every employee. VanAllen, for Source: Gallup instance, has yet to “drink the fuel.” Even so, she says, she hasn’t had any problems getting access to the company’ s leadership team. “They page. “It’s a great social media dictionary have a true open-door policy here,” she says. to have on hand,” VanAllen says. Employee turnover has been falling over the past five years, and it’s no surprise
Step 3: Watch and learn The company also has begun an informal apprenticeship programme, in which senior employees mentor new hires within their departments and on their project teams, which include staff members from a number of departments. VanAllen has been working closely with Ross Sheingold, one of the company’s channel managers, who leads brand management for T-Mobile’s account. Under his wing, she says, she has become more aware of new platforms—such as Pinterest, a site on which users can compile and share clippings from other websites—and their impact on social media strategy. Plus, VanAllen says, consistently working alongside senior employees has given her more opportunities for career development. “I wanted to do community management from a different angle,” she says. “This is not only a professional match but a personal match.” Step 4: Face time with the bigwigs As Big Fuel’s head count rises, the company’s senior partners have fewer day-to-day interactions with rank-and-file employees. So the firm’s three partners take turns leading a monthly session known as “drinking the fuel,” in which they meet with a randomly chosen group of eight to 10 employees, both new and old. The partners generally talk
Step 5: Tell us how you really feel After a month or so on the job, new hires meet with the company’s vice president of talent and operations, Anthony Onesto. He hasn’t had a chance to debrief VanAllen, but Onesto says the feedback he receives goes right back into the orientation process. Several employees suggested periodic refresher courses in Big Fuel University. Others asked for more in-person discussions with senior employees—something the company plans to initiate. “This is an iterative process,” Onesto says. “We’re always building more into it.” and the verdict?
Although it is too soon to assess the onboarding process’s impact, Onesto says the company’s turnover rate fell to about 10 per cent in 2011, compared with 15 per cent in the previous year. And employee response has been so favourable that Big Fuel is developing additional courses that will cover each of the company’s functions in more depth. The process has also impressed would-be clients and potential employees, says Big Fuel’s CEO, Jon Bond. “Social media is a very complicated subspecialty, and there’s a lot to learn,” Bond says. “Formalising a training programme been very valuable for us.” —April Joyner
strategy
Finance The angels of Madison Avenue Tech start-ups get a helping hand from an unlikely source—ad agencies As marketers struggle to keep up with the next big mobile platform or device, advertising agencies now need to be as proficient in new technologies as they are in pitching clever ideas. Rather than wait for new technology to come to them, a few innovative ad firms have gone straight to the source and taken an equity stake in promising young tech companies. Ad firms such as Ignited, Rockfish Interactive, and kbs+p have recently begun investing in media and technology start-ups. It makes sense, given that they already spend a good deal of time scouting media and tech start-ups to stay hip to the latest marketing technology. By investing in these businesses, agencies not only stand to make some money should they discover the next Twitter, but they can also tailor the new technology to the needs of their larger clients. “Ad people are famous for making promises and then running back to the office and saying, ‘How do we do that?’, ” says Eric Johnson, CEO of the El Segundo, California-based ad agency Ignited, which launched its investing arm, Ignited Labs, in 2010. “Now when I’m in a meeting with potential clients, I can say, ‘Not only can we do that, but we’ve actually invested in a company that’s making this technology.’ ” Ignited has invested in six start-ups so far, selecting companies based on word-of-mouth recommendations or from pitches it has received from aspiring businesses. One of Ignited’s first investments was in PixelMags, a Los Angeles–based business that makes a platform that allows magazines, catalogs, and advertisers to publish digital content on smartphones and tablet computers. Partnering illustration by Prince Antony
Pitching ad firms is much the same as pitching VCs, although there are some nuances.
with Ignited “was a strategic move for us,” says PixelMags co-founder Ryan Marquis, a software-industry veteran and founder of two previous start-ups. “The ads we publish inside each magazine are a major part of our platform. We thought,
if we could tap into Ignited’s experience with advertisers and get some funding, it’d be a perfect fit for us.” To make that happen, Marquis and his co-founder, Mark Stubbs, submitted their financial statements to Ignited’s Johnson and met with him to demonstrate PixelMags’ technology. Johnson and his COO, Bill Rosenthal, evaluated PixelMags as an angel investor would, using criteria such as the founders’ prior business experience, scalability of the company, and quality of the prototype. They also considered whether PixelMags would align with the needs of Ignited’s customers, which april/May 2012 | INC. | 49
strategy
5 0 | INC. | april/May 2012
Leadership When less is more Forceful? Sure. Agile? Of course. But elegant? Really? Most leaders seek to boost their performance by becoming more: more decisive, more communicative, more masterful of complexity. Matthew E. May prefers the opposite approach. A former consultant for Toyota, May sums up much of what he learned there about the art of simplification in the word elegance, which he applied to products, processes, and problem solving in his 2009 book, In Pursuit Addition by Subtraction of Elegance. (A new book, The Laws Matthew E. May suggests that action isn’t always necessary of Subtraction, will be published this fall.) In a recent conversation with editor-at-large Leigh Buchanan, May discussed how elegance applies to leadership. Let’s start by defining elegance.
Elegance is the ability to achieve the maximum effect or impact through the minimum means. One of the best examples is the Google interface. There’s a box; there’s a lot of white space; you enter a term and search for it. What’s the leadership analogue of the Google interface?
Elegant leaders would be very accessible and easy to connect with. There would be nothing excessive about them. They would do nothing wasteful. Someone asks a simple question, and they get a simple, meaningful answer. Bill Bratton had an elegant way of leading at the New York Police Department. Doug Conant, who recently stepped down as CEO of Campbell’s Soup, had the strategy of using small, informal points of daily contact to deliver meaningful messages about the company.
Courtesy subject
include NBC Universal and the NFL. “If three of our clients can use the product, there are probably a lot of other people who can do the same,” Johnson says. PixelMags has raised two rounds of funding from Ignited Labs, totalling a few hundred thousand dollars. (In similar deals, Ignited has taken a 20 per cent stake in the companies it has invested in. The investments have ranged from $50,000 to $500,000.) In addition to cash, Ignited also provides office space, manpower, and, most important, industry contacts. One of the first companies to run an advertisement on PixelMags’ platform was Princess Cruise Lines, a former Ignited client. “We would have had a way harder time going to that client on our own,” Marquis says. “Our relationship with Ignited got us in with them and gave our platform credibility.” For start-ups looking for funding, the protocol for pitching ad firms is much the same as for pitching traditional VCs, although there are some nuances. “Just like when entrepreneurs present to a VC and know what other start-ups they’ve invested in, it would serve entrepreneurs well to know who our customers are and the industries we’re working in,” says Dave Knox, chief marketing officer for Rockfish Interactive, which launched its investment arm, Rockfish Brand Ventures, last year. “If they can walk in and show us how it’s immediately applicable to our partners, that’s a plus in their column.” Obviously, not every start-up is a good fit for this kind of funding. Both Rockfish and Ignited have a narrow list of industries they are interested in. Mobile technology, digital commerce, and location-based technology rank high on Rockfish’s list, while Ignited wants startups that are working on next-generation research, Facebook apps, tablet computing, and video technology. Businesses that do fit those moulds should be prepared to teach as well. “We ask ourselves, ‘By working with this team, can we learn something new about this space?’ ” Johnson says. “That’s the X factor.” —Issie Lapowsky
How does one become an elegant leader?
Elegance requires that you subtract. Leaders should ask themselves two questions: One: What would the people in my organisation like me to reduce or stop doing? Two: What would my competitors hate for me to reduce or stop doing? This is challenging, of course, because adding is a human inclination. A couple of days ago, my wife and I were at Costco, watching people walk out with big, happy smiles because they got 36 rolls of toilet paper and enough meat to feed an army. We love to accumulate. That’s what business leaders do in terms of staffing and building their companies. And all of a sudden, growth becomes the strategy, and you wake up and, lo and behold, you realise we’re a lot slower than we were a few years ago. What kinds of things might leaders subtract?
In the case of what employees want you to stop doing, subtract anything that complicates an organisation or how its people work. Leaders like to put structures in place, but a very structured organisation can be extremely inelegant. Small companies tend to be much more elegant than large companies, because they are simple, agile, and resourceful, with a clear focus. Entrepreneurs often start out as quite elegant leaders. What about in terms of competitors?
Competitors would hate it if you stopped doing things that get in your own way. Google’s leaders would hate it if Microsoft’s leaders stopped adding features the engineers think are cool but people have no use for. What does elegant leadership look like in action?
It’s the difference between karate and aikido. Karate is hitting and kicking. It’s meeting force with force. Aikido is using the momentum of your opponent to your advantage. It’s meeting force with give. If you were to watch aikido in action, you would see very, very little movement on the part of the aikido master. You would see a lot of movement
on the part of the attacker. So it’s the ability to use external forces in a way that moves us forward. Yes, the world is getting far more complicated. Things are changing faster than ever. How do you exploit that? How do you make it invisible to customers? Are there things leaders are told to do that are inelegant?
Immediate action is supposed to be a sign of a forceful leader. But I remember what Boyd Matson, a longtime journalist for National Geographic, once told me: If the hippos charge at you, stand still. If you’re on a safari and come across a watering hole with Mama Hippo and her calf, and she doesn’t like the way your camera
Is it possible to be a Zen leader?
Did Steve Jobs qualify as a Zen leader? He was certainly into it. I don’t know how he came out to be such a toxic individual. A Zen leader would embrace the notion of masterful work and constantly get better at it. He would do what he did for a worthy reason and in a noble way. That constant pursuit of perfection while understanding perfection will never be achieved flies in the face of how we think. If we can’t achieve something, then why pursue it? Well, because we have to. That’s what Jobs did so well and Jeff Bezos does so well. Leaders are always being told to communicate. Is too much communication antithetical to elegance?
“Small companies tend to be much more elegant than large companies, because they are simple, agile, and resourceful, with a clear focus.” sounds and decides to charge, you can’t fight her, and you will die if you run. The only way to survive is to stand still. Leaders of businesses face 2,000-pound beasts every day—they’re called competitors or the economy. When they’re pressing down on you, doing something isn’t always better than doing nothing. Surely doing nothing is dangerous.
It’s not dangerous if you develop a skill set around two important things: observation and reflection. In the Western world, we are driven by shortterm cycles: the 10-day sales report, the monthly close, the quarterly stock report. In the East, they take the long view. First, you observe the problem and try to understand it from the perspective of others: the user, the employee, the customer. Only then do you begin the design or the decision-making process. If you don’t take time to observe and reflect, you risk making things worse.
You have to think about where that advice comes from. Some leaders don’t communicate at all. Study after study shows that the two extremes—radio silence and TMI— don’t work. So instead, use the Goldilocks principle of straight down the middle. Communicate just enough, just in time, and in such a way that you intrigue employees enough that they want to learn more. You want them leaning forward rather than sitting back with their arms folded. Should the CEO also be a CSO—chief simplification officer?
No. Because, though all elegant things are simple, all simple things aren’t elegant. You could make the case that “Chainsaw Al” Dunlap was all about simplicity, because all he wanted to do was cut, cut, cut. Jack Welch wanted to neutron-bomb businesses that weren’t one or two in their markets. A leader must bring artfulness and emotional intelligence to how he thinks about simplifying. april/May 2012 | INC. | 51
strategy
Design Butch & Harold’s wholesale business was thriving. The online business? Not so much
logo The company is named after a pair of pretend pooches Gold and her sister played with as kids. She briefly considered a canine-oriented logo, but she was concerned that Butch & Harold would be mistaken for a pet care company. “In the end,” says Gold, “we liked this logo’s simple, clean lines and colour combination.” Gold also came up with the tag line peel…stick…love…repeat and placed it below the logo.
before
Butch & Harold’s peel-and-
the copy Flash back to 2007, when the site was launched. Twitter was just a year old, Facebook was just three years old, and search-engine marketing was a mystery to many. That accounts for this description of the company, which Gold admits is not geared toward turning up on Google searches. “We were smart enough to know we needed a website,” she says. “But back then, we were clueless about online marketing.”
background A cousin of Gold’s husband’s built the original site for free. Gold’s main goal was that the site reflect the brand’s style. So the designer used patterns from Butch & Harold’s first line of wall decorations to create a striped background. Gold found the homepage attractive but admits that she forgot to add crucial elements: pictures of the products. “We were more concerned about aesthetic and whether the colours worked together,” she says. “We were totally off on what the point of an e-commerce site is.”
Expert opinion What’s for sale? When I look at a website, I should know what it’s selling in about five seconds. I don’t find that here. Instead of Peel ’n Stick, the site should say Wall Stickers. Then Butch & Harold needs a defined call to action. The little Post-it that says original stickr looks like a call to action, but I try to click on it and can’t. Since it’s not adding any value, I’d take it out and make the Shop Now button stand out more. Pete Juratovic, president, Clikzy Creative, Washington, D.C.
5 2 | INC. | april/May 2012
Pay more attention to SEO I think Butch & Harold dropped the ball on its SEO work. The whole section that says Peel ’n Stick is currently an unreadable image, but it could have been done with CSS or Webfonts, which would have enabled it to be read by Google. That way, it would have had an SEO and visual impact—and lost that ugly font in the middle of the page. Andi Graham, principal, Big Sea Design, St. Petersburg, Florida
Spread: Image Source: Blue Fountain Media; Experts: Courtesy Subject (4)
stick wall art, dry-erase boards, and sticker picture frames were a hit with wholesalers and retailers. But online sales were virtually nil. Michele Gold, who founded the company in 2007, wasn’t surprised: Butch & Harold’s website didn’t make it particularly easy for would-be shoppers to make a purchase. She gave Blue Fountain Media, a web design and marketing agency in New York City, a limited budget, just $15,000, and asked what it could do. The revamped site debuted in April 2011. —Issie Lapowsky
strategy tag line Gold wanted the new homepage to be more direct about what Butch & Harold sells—and both she and Blue Fountain’s team agreed that amplifying the tag line would help. “That line describes what our product is. Butch & Harold doesn’t,” Gold says. So Blue Fountain’s team changed the line’s font, size, and colour to make it as prominent as the logo and as lively as the rest of the page.
AFTER
q&A
Jeffrey Zeldman, on the right way to retool
Video Posting photos of the stickers was a start, but Gold wanted to show customers how to use the product as well. The 58-second video tutorial, shot by the company that designs Butch & Harold’s packaging, clearly demonstrates how to put photos in the frames.
Zeldman is founder of the online web design magazine A List Apart and the New York City–based design firm Happy Cog. Q: What’s the biggest mistake people make during redesigns? A: They’re seduced by lots of features. A restaurant might be tempted to add a virtual tour. But these days, people look for restaurants on mobile devices; if you have a Flash site that doesn’t work on 15 per cent of smartphones, that’s bad. Q: How do you hire a good designer? A: Beware of people who seem in a rush to say yes or sell you features; often what you’re getting there is a template that they use for all their customers. You’d do better with someone who takes the time to learn about your business and figure out what you really need.
product shots Many of Butch & Harold’s products are now displayed on the homepage. Gold also tried to make the homepage more playful by adding photos and brighter colours. The price of the sticker frame was added to appeal to twenty-somethings decorating their spaces on a budget.
search-engine optimisation The new description of the company is loaded with key terms such as vinyl wall art and wall stickers to boost Butch & Harold’s search rankings. Blue Fountain created a blog for the site, which improves the chances that other sites will link back to Butch & Harold.
Q: Should you trust your designer, even if you disagree with his ideas? A: Business owners should think of designers as architects, not decorators. You wouldn’t tell an architect to build something that’s not structurally sound. A good designer has technical knowledge—don’t treat her like someone who’s there to decide whether something should be pink or orange.
the bottom line
In 2011, the site received 82,000 page views, four times more than it received the year before, and it is now the No. 1 search result for several keywords, including vinyl stick on picture frames. Online sales, negligible prior to the redesign, topped $9,000 by year’s end.
Better, but still needs work This is an improvement. On the original site, the content was meaningless; on the new one, you get a good sense of what the business is about. But Gold and Blue Fountain didn’t make any changes to the main navigation bar at the top of the page. Meanwhile, the product categories are buried under Shop. Products are what people are looking for, so that’s what should be at the top. Dan Brown, co-founder, EightShapes, Washington, D.C.
Be bolder The new design pushes the product to the forefront, but without much clarity. Gold and Blue Fountain squeeze a lot of information into a small space, so it’s confusing. Launching with just one dominant element—like the Peel ’n Stick image— would have made a more confident splash. Not showing any product on the original was a big mistake, but at least it felt upscale, crafted, and a little more intriguing. Simon Endres, creative director, Red Antler, Brooklyn, New York april/May 2012 | INC. | 5 3
Robotic Fun
Can Tarun Bhalla build the country’s scientific future?
5 4 | INC. | april/May 2012
Photograph by Subhojit Paul
strategy
Elevator Pitch Building Blocks sets up science centres in schools and colleges. Will investors sign up for the `8-crore experiment?
COMPANY
Building Blocks FOUNDER
Tarun Bhalla LOCATION
New Delhi LAUNCHED
June 2009 Revenue
`60 lakh (2011-2012) Projections (2013)
`14.5 crore FUNDING SOUGHT
` 8 crore
FUNDING SOUGHT FOR
Expansion in all domains (Sales, Marketing, Product Development, Operations)
The Pitch “Schools and colleges are always on the lookout to provide hands-on
activity-based experiences to their students. Given that there are 20,000 schools and 5,000 colleges in India, the market for experience-based learning tools stands at `1,250 crore. To tap this huge opportunity, Building Blocks sets up robotics, science and technology centres, and operates them on a BOT (Build, Operate and Transfer) model. Our do-it-yourself robotic kits combine hardware, software and education solutions to make the educational experience more exciting and engaging. Our typical sale to a school or college is worth `5 lakh per annum. Each contract has a 50 per cent margin and goes on for four years. Since we began in June 2009, we’ve run science centres in more than 100 schools including DPS Sonepat and The Shri Ram School, Delhi. With a strong team of engineers, technologists and educationists from top colleges in the US and India, we now want to cater to engineering colleges also.”—As told to Inc. India
The Experts Weigh In Focus on scale
Figure out funding amount
Good team and good product
Building Blocks’ ability to attract some quality names as customers in a short time span is commendable. However, our experience of companies operating in the school ecosystem has been that selling to them is challenging. For instance, Think Labs is a company that has tried ideas similar to Tarun’s venture. Unfortunately, business practices employed by some publicly-listed education technology companies with similar business models (not necessarily similar products) have muddied the waters as well. So, scalability and sustainability of the business model can be a challenge.
Both the idea and the product it has led to, look good. Garnering a `60-lakh revenue in 2011-2012 is a promising figure for a company in this domain. Typically, schools and colleges look for educational kits made by market leaders like LEGO and Fischertechnik. But their products are expensive which has created opportunities for ventures like Building Blocks. They must back product sales with training services too. Considering the robotics education market, having these many customers is good progress. Plus, we can expect the customer base to grow in the next year. But the funding sought is too high and needs to be negotiated.
The product and the business model have helped the entrepreneur to draw up a good pitch. It’s certainly one of the better and more evolved elevator pitches I have seen. Yet, my suggestion is that Tarun needs to equally focus on the individual consumer side as well. The team background seems pretty solid, and is a testimony to the present success of the company. Of course, there are questions around operations, marketing, scaling and eventually competition. But there is tremendous potential in the current business model. As a VC, I’d definitely be interested to know more.
Parag Dhol, MD, Inventus Capital Partners, Bengaluru
Abheek Bose, CEO, Robots Alive, Benglauru
Puneet Vatsayan, chairman, The Hatch Incubator, Chandigarh april/May 2012 | INC. | 5 5
strategy
The way we work | Hitesh Dhingra and Amanpreet Bajaj, LetsBuy.com
“You can’t create silos when you grow a company together. In ours, anybody can approach anybody.” Over the past 18 months, Hitesh Dhingra and Amanpreet Bajaj, co-founders of LetsBuy.com, an e-commerce portal specialising in digital and electronics products, have continuously found themselves in the news—first, for raising a $6-million investment from biggies like Accel Partners, Tiger Global and Helion Venture Partners, then for scaling up to become a leading e-commerce player with more than two million unique visitors per month and shipping 3,500plus products a day, and most recently, for being acquired by market-leader Flipkart for a reported $25 million. Dhingra and Bajaj, friends from their college days in Delhi University, seem well-adjusted and at ease with their exciting journey. Still, surviving hyper-growth, and cementing a working relationship through it couldn’t have been easy. Even as they get ready to enter into another partnership of sorts (LetsBuy.com will continue to work as an independent entity post the Flipkart deal), Dhingra and Bajaj delve into how their own partnership works.
As told to Shreyasi Singh | Photograph by Subhojit Paul 5 6 | INC. | april/May 2012
strategy
Well-Matched Hitesh Dhingra (right) and Amanpreet Bajaj have perfected the good-copbad-cop drill.
strategy
Hitesh Dhingra: We get to office by 10am or so. Usually, by
10.30am, we’ve got our daily dashboards up—we know what is happening in sales, we’ve seen the call centre reports, and the other metrics. This helps us get to the nerve of the business, and to know what needs our special attention. Once we’re done with that, we can get into the more strategic stuff for the rest of the day. Honestly, this structure has evolved only in the last six months or so. Before that, we were still building up functional departments and their teams. We couldn’t plan our days. We would just do whatever was required.
Amanpreet Bajaj: Having a much
more structured approach—designated weekly meetings and set Monday morning meetings with the entire team—has really helped us. In fact, our BlackBerry calendars fill up fast with appointments now. I put more on Hitesh’s calendar on a daily basis.
A
HD: Operationally, the last yearand-a-half has been incredible. We were 13-odd people in December 2010—just before we raised our first round of funding of $6 million from Accel Partners, Tiger Global and Helion. From then on, the scale up has been almost unreal. We did business of `14-15 crore in the 2010-11 fiscal. This year we should be closing at `150 crore plus. That’s 10x growth. We hired 370 people last year which is more than a person a day. That was a massive task. We’d interview around 15-16 people a day and added an entire layer to the organisation by key recruitments like CTO, CFO and Director, Operations. Cut to the present, where we have the Balance Scorecard method implemented across the organisation. Now, every function knows what its KPI (key performance index) is for every month and every quarter. That keeps everyone on their toes, and with our dashboards, we’re on top of those indices. Today, we’re trying to make a company that is driven by analytics and metrics. AB: We managed our hyper growth because both of us brought
different skills to the table. We’ve known each other since college, and had launched a youth portal back then. After that, Hitesh worked with technology start-ups and an IT distribution company. I was with Ernst & Young for six-and-a-half years, advising businesses on how they should structure their supply chain and logistics. So, we had complementary skill sets. I took over the operations, and Hitesh took care of the business side—interacting with investors, managing the category and building the team. While I was building warehouses, he was building the company.
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HD: Because of the clarity of our roles, and our respect for each other, we’ve made it work. Of course, in a start-up everybody does everything, but at a macro level, there needs to be an understanding of who’s driving what. In the last one-and-a-half years, we have been interacting with investors continuously. The first round took almost six months to come through. Even the Flipkart deal took almost four to six months. So, we decided that I will focus on managing our investor relationships.
B: Beyond being responsible for our verticals though, we’ve made sure there is constant communication with all the teams. At times, I’ll have an evening session with his marketing team and discuss ideas out. Or, he’ll go to the warehouse or talk to the procurement and logistics team. When you are growing the company together, cross-functional communication is very important. You can’t think this is my team, and I’ll only interact with them— you can’t create silos like that. It’s important to have an environment where anybody can be approached by anybody. More than our skills, our personalities complement each other. Hitesh is very intuitive. He tends to follow his gut. When we are working on a solution, the first thing that comes to his mind is often what we end up doing after debating all the other options. That’s a huge strength, we want to make sure he’s given an environment where he can follow his heart, and come up with what his instincts tell him. HD: On the other hand, Aman is very detail-oriented. That’s what one needs in operations. It’s run on precision. Plus, he’s great with people. Even after the Flipkart deal, people want to continue to report to him. He commands a lot of respect from the team. In fact, 250 of our 370-odd people report to him. That was important for me. I didn’t want to be the only person being looked up to. Plus, we’ve made the good-cop-bad-cop philosophy work very well for us. It’s something we’d decided early on. Today, the perception of our team is that I’m the carrot, and he’s the stick. Whether a partnership will work out or not depends on how mature the partners are. When I began LetsBuy, another college friend of ours was working with me. He stayed with the company for six odd months and then decided to move away. We didn’t gel well together. When Aman decided to join the idea, I felt personally responsible. I had to make sure he stayed longer. In fact, just before he joined, I told him we were entering into a marriage. If any of us decided to move away, we’d have to shut shop. There was no other way.
strategy
“Whether a partnership works or not depends on how mature the partners are.” AB: Thankfully, conflict-resolution hasn’t been a problem for us. What we’ve seen is that both of us have the habit of reasoning things out. We both bring 10 points to an argument or discussion, and come to an agreement. HD: Interestingly, we’re both Geminis. So, at any given point,
they’re actually four people making a decision! It’s great. Both of us always have two options to choose from. Jokes apart, we argue a lot but we haven’t really faced a situation where I’ve wanted to punch him, or he’s punched me. We’ve met Sachin and Binny (cofounders of Flipkart), and like us, they are very hands-on too. There’s a lot of synergy in what we like—we’re all very passionate about e-commerce and the internet. And, I’m expecting that the four of us will be able to work together the way Aman and I have been working so far. AB: I think one of the main reasons we’ve managed to grow and sustained that growth is because we had a lot of entrepreneurs in our team. Even when we were just a company of 70-80 people, around 10 people in key roles had been entrepreneurs in their previous avatar. As we scaled up, those functions also grew in toto with the company. Our company was a great place to be through that year when we expanded from 50-300. Everybody was driving everybody, and that really worked.
you want to grow exponentially, and there are no rules and processes, what you need is hard-core passion. As you scale up, you need people who have seen that scale and have experience. HD: For our first 50 people, passion was our priority. A relevant job experience came in second. But now the proportion has changed. For certain roles, we want people who have years of relevant experience. You need a balance. AB: We’re trying to bring some of that balance to our work-life relationship as well. We’ve been working 14-15 hours a day. That’s been our lifestyle for the past 18 months. We’d work every day of the week. On weekends, we would have meetings or call people for interviews at a Cafe Coffee Day or Barista. Our operations run 24x7 so we're always tempted to drop in at the warehouse, and check on things. In fact, there was a time when my wife took my BlackBerry and put it in the cupboard so I could not check or send e-mails at 3.30am. Now, at least Sundays are reserved for the family though honestly, even that is still a work-in-progress. But this is what passion means, I guess. Most entrepreneurs will tell you it’s not just about money. It’s about creating something. I know that sounds clichéd but it's exactly what makes you happy about working like this. We are slowly beginning to let go a little. It's important to understand that somebody else is handling it, and that you should look over it only from a macro level.
H
HD: That micro-entrepreneurial culture is intact even now. For example, the CTO sets the rule and the culture for the technology team. Because we ended up liking a lot of failed entrepreneurs, we got a great bunch of people with a lot to prove to the world. They feel a lot of ownership here, and because they are leading most functions, the start-up, entrepreneurial culture has been easy to maintain. We really value that. Actually, in the e-commerce space, we probably have the lowest attrition. In our technology team of 150 people, we would have lost only two or three people so far which is incredible if you consider that we’re based out of a hub like Gurgaon. That is a big achievement—to have a great team who loves working with us. AB: Of course, our people mix has begun to change now. It depends on what stage of the company you’re in actually. When
D: How much you want to know about what goes on in your company is a preference. I’m sure if Aman doesn’t check the warehouse status at 1am, nothing will go wrong. But, it’s your attachment to your venture. There were times when I think my wife began to think I was up to something else, because I’d be calling and talking to Aman in the middle of the night. Both of us live close to where one of our main warehouses is. So, typically, we get there at 10pm after office and stay on till midnight. But, that’s fun, right? In fact, more than the business growth, the highlight of my past two years has been the relationship I shared with Aman and Manish, an angel investor who has also been involved with us operationally. We know that whatever the new venture we have four-five years down the line, we’ll do it together. april/May 2012 | INC. | 5 9
I wish I knew then...
Pankaj Keswani, Alufit Pankaj Keswani began Alufit, a facade engineering company, in 1984, with meagre funds and little experience. In fact, when he won his first contract—a `35,000 job to do aluminium cladding for a guest house—he didn’t have factory space or contractors. By the middle of 2000s though, Alufit was a thriving curtain wall provider with hundreds of successfully completed projects. The twist in Keswani’s tale happened around the same time, and taught him crucial lessons. The first two decades of building a business was tough especially since I was a first-generation entrepreneur. Both, in terms of access to capital and to advice, there was always a pressure to survive. Success really only hit me around 2005-06 when Alufit was around a `300-crore company. Plus, we had a great reputation. I had begun to feel I had the Midas touch. It was then that I decided to backward integrate the business and set up our own aluminium extrusion facility. It made perfect sense for us to have that in addition to our fabrications units. We could produce what we needed for our projects, and market the rest. Aluminium was something I believed I could do anything with. I didn’t bother to do much research or make a project report. I made an investment of `60-80 crore to set up our Kuppam plant near Bengaluru straightaway. In fact, I was so confident about the project that I refused to take the tax holiday my bank offered. I don’t need it, I told them. Unfortunately, my optimism was misplaced. This was around 2008. The global economy was in trouble—first, the dollar depreciated and my costs for setting up the plant shot up. By the time the facility came up
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time, the Indian subsidiary of Sapa Group, a Sweden-based aluminium solutions giant, came to visit the Kuppam plant. They were very impressed—we had the capacity to produce 1.2 million tonnes annually, and our processes were in place. Sapa wanted to expand in India, and I knew Alufit would be in greater trouble when that happened. So, I suggested we join hands. The next thing I knew the top management was doing evaluations, and wanted 51 per cent. I agreed because I wanted to get out and needed the money. Eventually, they upped the stake and bought us out completely. The deal went Not Without My Homework Pankaj Keswani learnt through in May 2011. We came the hard way that not being prepared is a foolproof plan for business disaster. out positive. Although it ended well, I’ve in February 2009, my fabrication business learnt a big lesson—never take up anything was beginning to tank. Existing orders were without a proper study. I wish I knew then dwindling, and new sales had dried up. how important homework is. But, I was overMoreover, I soon had to begin debt confident. It happens to entrepreneurs a lot. payments of `60 lakh a month on the new When you become successful, you begin to plant. The next two years, 2009-10, were believe you’re always right. Today, I’m better terrible. I was worse off when I had started. It off with this experience. I’m more detail-oriwas a struggle to stay afloat. I managed for a ented as we expand into new cities, and over year by selling a real estate asset for `20 crore. the last one year, we’ve got Alufit to `200 crore I realised the only way out of this scenario again. —As told to Shreyasi Singh was to get private equity funding. I planned to give away 30 per cent. Around the same
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