The Coffee talk - art of internal selling

It seems like the biggest battle facing most managers is not so much ideation but enforcing change within the organization. Often, by the time you have understood the concerns/perspectives of various stakeholders (leave alone create solutions to address them), one is exasperated. Which means, little time for actual execution on the ground. Sort of analogous to idle time in Manufacturing - 90% of any manufacturing process is idle time, only 10% is actual processing time.


This was valuable advice given by a colleague of mine - "As one goes up further, the biggest battle is to carry along multiple constituencies - well-wishers, not so well-wishers, peers, sub-ordinates, bosses. " For you to carry along someone, you first need to know what the other person is thinking - and that is'nt going to happen unless you there is open, informal communication. Unless you have a feel for the undercurrents, you are not going to be able to sail your yacht through. Understanding undercurrents often does not involve a deep dive, but a consistent ability to take mini-dips, socialize ideas, get other people's perspectives and work on change.


At a personal level, I would like to believe it enriches one's perspective - ability to read and handle other people, understand their fears/insecurities/turn-ons/turn-offs. For me, the biggest though has been learning to think on my feet - you learn to handle the most unexpected questions and perspectives.

Here is a link to an excellent article that does raise some very pertinent questions on this topic.


~Varadha
(varadha.r1@gmail.com)

Strategic Vs Private Equity Interest in a business

Most businesses in India have at some point of time or the other experienced this conundrum of seceding stake to a Financial Vs a Strategic investor. Since there are plenty of definitions of a Strategic Investor floating around, for the sake of simplicity, we have to define this as someone who has an inherent interest in having a strong say in the day-to-day management of the business vis-a-vis a financial investor who is happy to be a navigator/co-passenger and not meddle with the details.

In most cases, a strategic buyer will offer a higher upfront valuation (because he finds use for a lot of intangibles that the financial investor often does not - not unless he is thinking of synergies within his portfolio). For eg., - brand, distribution channel, sales capabilities, products/IP which unfortunately are not worth much for a PE investor. However, what people often miss out on is the fact there might not be alignment between the entrepreneur's thinking and that of the strategic buyer even in the short term.



Not every strategic buyer wants to grow the business - case in point being disruptive acquisitions by Google, Microsoft to weed out potential competitors at a nascent stage or better still, Coke's acquisition of Thumbs-Up or Maaza (both the brands got nowhere after the acquisition). In a lot of cases, it might be the case of defensive strategy to kill a niche competitor before he even becomes a threat to the larger company. Even in the best case where there is alignment, there could often be a case of the acquiree being held captive by the whims and fantasies of the acquirer (who is often using the asset to promote his larger interest). For example, a backward integration strategy could give a larger lever to the acquirer by improving his margins (and hence might reflect in the price), but often could check-mate the acquiree in the medium term as most of its other potential customer might turn away because of softer issues (data secrecy, conflict of interest).

The message is simple - where you see a headroom based on your own capabilities to grow, go with a PE fund. If not, go with a Strategic buyer.

What motivates an entrepreneur ?

One of the toughest questions Private Equiteers deal with is the art of fathoming the motivation behind entrepreneur - is it money, fame, self-fulfilment of driving to fruition an idea or the genuine drive to make a difference to the society ?

The piece I read recently, What motivates an entrepreneur ? is a pointer to some of this. It is a little dated but I presume nothing much else has changed. A majority of people seem to cherish the autonomy of being one's own boss (Is that a good thing for a private equity fund ? How much space will such a person be willing to secede for other's ideas).

One of the most important questions we need to pore our heads over is the resilience and dedication of the entrepreneur to the cause at hand. If times go sour, will the person be willing to stick on and improvise on the business ? Or is he a fairweather merry maker who likes the sheer thrill of doing something new all the time and has no qualms shutting the door if the going is not good enough ? Is he going to be happy seeing his face on the cover story of a business magazine or pink daily or is the latest new sedan going to give him the highs ? Or is it the thrill of being acknowledged by his social coterie about his achievements ?

Often, a lot of entrepreneurs I have met are not so much motivated by money (especially in an Indian context where ostentatious display of wealth is still not taken very well by the society) but more by self-fulfilment (whether it be desire to make a difference to society or to prove oneself that one can do it). If you cannot get this pulse right and touch the right nerve, no amount of external pressure or coaxing/cajoling is going to make the entrepreneur come out of his shell and look beyond the obvious.

Surely tougher than it sounds, is'nt it ?


~Varadha
(varadha.r1@gmail.com)

Entrepreneurial Motivation

One of the toughest questions Private Equiteers deal with is the art of fathoming the motivation behind entrepreneur - is it money, fame, self-fulfilment of driving to fruition an idea or the genuine drive to make a difference to the society ?

The piece I read recently, What motivates an entrepreneur ? is a pointer to some of this. It is a little dated but I presume nothing much else has changed. A majority of people seem to cherish the autonomy of being one's own boss (Is that a good thing for a private equity fund ? How much space will such a person be willing to secede for other's ideas).

One of the many things that we need to pore our heads over is the resilience and dedication of the entrepreneur to the cause at hand. If times go sour, will the person be willing to stick on and improvise on the business ? Or is he a fairweather merry maker who likes the sheer thrill of doing something new all the time and has no qualms shutting the door if the going is not good enough ? Is he going to be happy seeing his face on the cover story of a business magazine or pink daily or is the latest new sedan going to give him the highs ? Or is it the thrill of being acknowledged by his social coterie about his achievements ?

Often, a lot of entrepreneurs I have met are not so much motivated by money (especially in an Indian context where ostentatious display of wealth is still not taken very well by the society) but more by self-fulfilment (whether it be desire to make a difference to society or to prove onself that one can do it). If you cannot get this pulse right and touch the right nerve, no amount of external pressure or coaxing/cajoling is going to make the entrepreneur come out of his shell and look beyond the obvious.

Surely tougher than it sounds, is'nt it ?


~Varadha

(varadha.r1@gmail.com)