Get your Start-up Employee mix right! Here’s how.

When I began my business in 1984, I was just fresh out of college, naïve by today’s standards, and all of 24 years old.

Back then I use to sit in a small office of my photo-finishing studio which on the third floor of a quaint building on the bustling Laxmi Road in the heart of Pune’s famous peth areas.

Within a year of starting my business, I began to take pride in the fact that I had managed to build a very young team full of enthusiasm.  Despite the energy they brought into my venture, I was very well aware of the fact that they had no exposure, did not understand systems and processes, and had little understanding of planning and managing finance. So to say, they were excellent soldiers but what I needed were also Brigadiers and Generals who would carry out orders well, plan and execute well in advance.

My team was somewhat akin to a Cricket team that had no balance. On a day we would do well beyond our expectations and another day we would be miserable failures. I was so caught up in our day-to-day operations and managing an inexperienced team that all of us had no clue which direction the business is headed. I had no mentor who could guide me or any senior, experienced employee on whose judgment I could rely.

So, one fine day I sat down began reflecting on why I had no senior employee working with me. However hard I tried to reject it, I then had to painfully come around to accepting that as a 25-year-old owner and employer I was afraid of having someone who was senior, more experienced and perhaps more competent than me on my team.

I was more concerned about the perception such a scenario would generate than the fact that my business was directionless. I was mortally afraid that the person would appear as the leader and me a minnow in front of him. After much soul-searching and taming my insecurities, I then reached a conclusion that if I did not live up to their competency levels, in that case I did not deserve being called a leader at all.

It was a choice between safe keeping my ego and growing my business. A choice faced by every entrepreneur, be it a fresh-faced college student-cum-entrepreneur or an experienced entrepreneur hiring talent much younger and competent than him.

I therefore decided to hire two senior professionals in my organization: one a Marketing professional and the other a Production Manager. The Marketing professional I chose was an extremely hard-working, competent and a go-getter of a woman. Not very impressive to talk to, but she knew how to get the job done! She was extremely aggressive as an employee and a tough negotiator when it came to getting her salary. I felt truly intimidated by her at times.

The Production manager was ex-Indian Air Force personnel with a background in the maintenance department of the Air force. He was a very dedicated man, who believed in hierarchy and was meticulous to a fault.

Days passed into months and the two managers had taken their jobs seriously and were doing well. The Marketing manager was able to expand her territory, come up with unique schemes, and persuade customers to give us work; while the Production Manager worked hard at getting the job done in time.

Things were looking good as I got a lot of time to think ahead and plan my business. However, I had gotten so engrossed in my planning and had become complacent about managing my employees. I was under the impression that the two senior managers would take care of that too. Little did I know that I was soon heading into a major organizational crisis!  At first, it began as sporadic instances where a few differences of opinions would come up and I would let it pass and not take a stand or give clarifications. However, as the work began to gain momentum, the fight for organizational power between the two senior managers had grown much more than I had imagined. Petty office politics had taken precedence over the work which was at hand.   Meetings soon turned into a boxing ring with me as a meek referee in between two stalwarts

A full-blown crisis was just waiting to happen and it chooses to take place on a day when I was not in the office for a couple of days. I had just returned from an out-station work trip and headed straight to my office. As I entered my office, I could sense the heavy atmosphere hanging over our heads. Something had happened and I was completely clueless! I looked around and all the staff had grim faces and they were avoiding eye contact with me. I then noticed that the two key managers were sitting in their cages like lions waiting to go at each other!

I headed straight for my cabin and called for my cousin who was also one of my employees. Upon questioning him, he meekly told me that the two managers had an argument which had spiraled out of control and literally ended in a physical fight! Taken aback at this piece of news, I didn’t know what to say! Dumbfounded, I was tempted to ask who won, but refrained from asking on second thoughts. I mumbled my customary “ hmm”, and dismissed him and spent the next two hours thinking  how to solve this crisis! I couldn’t avoid it and neither could I address it without having a proper strategy at hand.

So I called each manager one at a time. The production manager felt that he was the boss on the floor while the marketing manager refused to accept him as the boss. It reached a point where they both put the ball in my court and asked me to choose: it’s either me or the other person.

Now, when you’re a young entrepreneur who has senior employees working for you, more often than not one tends to get arm twisted into taking decisions their way. However, I was not going to let that pass and I sat down with both and had a conversation that I should have had the first time they had a fight.

I shared my dream about my enterprise: the dream of becoming the biggest and the best photo-finishing lab in the state. I told them the goals that I had set for the business and then explained to them their role in making that dream come true. I held up a mirror to them and asked them to reflect if their behavior all this while was in any way productive and whether that was helping all of us working towards their goals.

I went one step further and informed them that their behavior was not befitting people their age and experience and that both of them were responsible for lowering the morale of the other employees and lowering productivity of the entire floor! I asked them to go home and reflect on this incident and come back to me four days later. I also let them know that it is they who have to make a choice of continuing here since I had hired both of them for their competency and that if it came to making choices between the two, they would both lose their jobs!

A week later, I had both my managers focusing on the company goals! My talk had made them realize their pettiness and they mutually agreed that if there was a difference of opinion, it would never be personal and that they would resolve it amicably. It was easier set than done, but then this time I kept a keen eye on what was happening in my office.

I realized that one can never become complacent when it comes to anything related to your start-up. Of course, there were many differences and disagreements that came my way after this instance, but then this time I was much more proactive and made my stance clear every time.

Here are my some of my tips on the simple rules for managing employees in a start-up:

1. Get your team balance right. Don’t hesitate to take older people. And don’t hesitate to take on talented people even if they are older than you!
2. Most Indians are programmed to think that the eldest is the boss. In a professional organization, you are the boss not by virtue of your age but by virtue of your position! So shake off that value system that the older person is automatically the decision makers!
3. Indian men find it hard to work under a female boss. That’s their cultural issue and we need to bring their focus on deliverable and results and not their gender.
4. Most  professional women on the other hand are loud and pushy because they have to survive in a man’s world. They therefore have to be aggressive and sometimes loud to be heard and make their opinions count. This leads to unnecessary stress So, if you want to come across as a professional and gender neutral organization, give female workers equal opportunities to prove their talent.
5. Sell your employees your dream. Tell them how they can participate in realizing the dream.
6. Surround yourself with people more competent than you. This is the biggest mind block most Entrepreneurs have. They’re scared of employing people more competent than themselves. But an Entrepreneur has the biggest edge over the most competent employee. An employee is not a risk taker and he respects you enormously for being able to take risks. And don’t be ashamed to learn from them. They will be your willing teachers. I have seen many organizations stoop to mediocrity because the owner is afraid of enrolling people more competent than him. In fact, he should constantly ask himself if his employees are continuing to be more competent than him. If they are not, he is clearly out pacing them and that he needs to continuously rejuvenate the team.
7. Finally, look for efficiency and not loyalty. The Indian value system values loyalty more than it values efficiency. Keep away from that trap. This is particularly true in first generation entrepreneurial ventures. The source of most conflicts between 1st generation and 2^nd generation employees is often this issue.

 

More tips and insights in my next blog!

 

Parag Shah

October 2012,

 

Give your customer a comprehensive solution not just a product!

 

In 1988, I was appointed the distributor for Photophone India Ltd., the manufacturers of Hot Shot- the first cameras that were introduced in the 35mm and 110mm format. These were supposed to be a replacement to the Click III from Agfa which were old and archaic.

Image courtesy Digicam History

I was expected to distribute their Konica color films, photographic paper, chemicals and equipment in the eastern India Markets. I was asked to handle the states of West Bengal, Bihar, Orissa and Assam and all the North Eastern States of India. Yet the brand that I was supposed to promote, Konica, had little or no market share in the Eastern India Markets. Apart from that, I had never even been to Calcutta, let alone have an understanding of that market! I was both ecstatic and afraid at the thought of chartering a new territory! Folding my entrepreneurial spirit on my selves, I told myself challenge accepted and went straight ahead with the distributorship.

Back then in the erstwhile Calcutta, the photofinishing market was controlled by the Sanghvi family under the brand name Snap Fotos. Today the famous Sun Pharma belongs to the same family. The only other brand that controlled the market belonged to the Roy Choudhury family. The market there was otherwise highly localized in areas where the labs were. We called these labs “stand alone” as they were unlike the “chains” mentioned above. During those times, the two main competing brands in the photofinishing businesses were Konica and Fuji.  Although priced the same, Fuji was clearly the market leader.

Market Contenders

Beating a market leader in a market that you have very little knowledge of is a feat in itself, so instead of getting intimidated by the task at hand, I decided to use strategies that had worked well for me in the past. To break through the market, I didn’t try to break into large consumer markets in my first go. Instead, I focused on the smaller ones who were largely ignored by the major players. I also worked at becoming their solution provider and not just their product distributor.

To execute the above strategy, I created a service I called “The Konica All Clear Service”. I requested Photophone to provide me with a Ph. meter and a Densitometer, complex electronic equipments that required some training and skill to read. The Ph. meter checked the Ph. of every chemical used in the process of photofinishing, while the Densitometer checked the final results and ensured that the color balance of Red, Green and Blue  was perfectly matched, thus giving you a bright, consistent and superior quality of prints.

Now every chef knows that the proof of the pudding is in eating it, so in order to get my pitch perfect for the stand alone lab owner, I got a set of prints printed by either Snap Fotos or at Roy Chauhdhari’s “chain” of labs, depending on the area where my “stand alone” lab customer was located. Armed with this set of negatives and prints, I went to the “Stand alone Lab” and requested them to print the negatives, like any other normal customer did and paid them for these prints.

Stand alone labs

Once I had their product, I would then take out what I had previously printed at the “chain” and compared the two right in front of the owner. Quite naturally, the lab owner would get defensive about his quality and service. It was precisely at this point that I would ask him if he wanted his prints to look as good as or even better than the one I was comparing his work with. With a look of sudden surprise on their faces and a bit of suspicion in their eyes, they would cautiously say yes just out of curiosity to see what magic I could do.

I would then roll my sleeves up, and ask to be taken to their processing room. Once there, surrounded by the owner and his staff, I would then open my bag and take out my instruments one by one and display it on the table. Using these instruments I would then take my time and check the Ph. of their chemicals and  proceed to give them my diagnosis. I would always go one step ahead and make the necessary corrections in their chemicals and print the same set of negatives right then.   Lo and behold! The prints would turn out better or at least as good as the competitor “chain”.  What the stand -alone lab customer didn’t understand was that quality is 99% based on the conditions of the chemicals used in your photofinishing equipment!

After every one of these sessions, I would always be invited to the back office for a cup of hot chai and snacks! Most of these lab owners had become my friends as I had given their businesses a lease of new life! I would send my engineer every 15 days to check their chemical parameters and make corrections by adding additives, if necessary. We would then issue an “All Clear Certificate” from Konica Corp. (Japan) to the lab owner, provided he met our more exacting quality standards, and of course bought our chemicals, photographic paper, and films.

Getting the Konica machine installed at the lab.

Selling Konica Photographic Paper and Films, Machines, and Chemicals was a natural extension of our “All Clear service”. It was something that we found that needed hardly any “selling” once we had explained the advantages of maintaining the chemicals and giving their customers consistency in quality. I considered all of the above as the foundation for all my future sales strategies and didn’t charge the owners anything for the services we provided. This was a win-win situation for both parties since it also saved them huge capital investment in the purchase of the diagnostic equipment, the Ph. Meter and the Densitometer and it ensured that they were maintained on my customer list.

By the end of the year, I even persuaded Konica to make their prices at least 1% higher than Fuji, thus positioning it as a superior product based on price. The big “chains” soon followed automatically. Just under a year, the perception had changed as most customers had begun to perceive Konica as a better product. I say perceive because this is the magic of a cleverly designed and executed sales strategy. There was no difference between Konica and Fuji; in fact it was simple case of applying better quality control!

By giving my customer a comprehensive end to end solution and not just a product, I had won over customers for life. I treated them fairly and with respect. In the span of one year, I had managed to raise Konica’s market share from 2% to 24%, an unparalleled feat in the history of Konica, India. We had challenged the Goliath and had managed to slip the carpet from under their feet!

Converting from Fuji to Konica with the All Clear Service.

For all the startups out there, this is the lesson I wanted to share with you too. You have to  provide your customers a solution, not just  a product! By providing my customer a comprehensive service free of cost; ensuring that the quality of his end product was as good as it should be; by saving him huge Capital investments otherwise impossible for him to make; I had offered him a comprehensive solution. Buying my products became a natural extension to the service I provided. Konica began to replicate that model all over India and soon became market leaders in India.

No matter what business you are in, this lesson can be applied to your business. You just have to be genuine and creative enough to execute it!

To be continued…

Parag Shah

September 2012.

 

Pehela Nasha, Pehela Khumar And My Pehela Akkal Khaata. (My first venture, My first high and My first lesson.)

“Let yourself be drawn by the stronger pull of that which you truly love.” -Rumi

They say that your first fall is always your best teacher.  And so was mine. My first attempt at Entrepreneurship was as a 11 year old boy who knew little of the world around him.  I had come home for my summer holidays, and like most boys my age found that I had an excess of time which God put in there for me to realize how much more fun school was!

Around the same time my father had just bought a small portable “Brother” typewriter that had just come out in the market. Being a loner and a dreamer, the type writer fascinated my imagination. In order to get to know this technology a little better I joined a type writing class, upon which I immediately found mundane as I had quickly understood it’s features.

Brother Tyewriter

Bored and nothing to do, I used to walk over to the cricket ground in the evenings where I would sometimes play cricket with my few friends in the village. Now I could tell you that I played brilliantly and that’s how I was inspired to be an entrepreneur but then that would be a lie. I was never really good at it because I had poor hand eye coordination and although I loved this game with all my heart, I always knew that I would never be a good cricketer. I was a dreamer, so I persuaded my father to buy me a Cricket Set and an expensive one at that. But once at the nets I realized that the prospect of facing a cricket ball (helmets didn’t exist those days!) was frightening!  I just would step away from every ball that came at me and soon realized that I’d rather do something else than look like a fool!

I was however aware of my strengths and my weaknesses, and this is where I decided to turn the tables to my benefit. Having learnt the art of presentation from my typewriting classes, I decided I would organize a cricket tournament. When I told my friends about it, they looked dumbfounded and seemed least interested in anything other than just playing cricket.

Not to be beaten down so easily, I decided I would be a sole proprietor and would single handedly organize the first cricket tournament in Daund.  Back then Daund was a small town with a bare population of 25,000 people, but it was however a major transit center, catering to a lot of floating population.

I announced a date and then worked backwards. Painstakingly, I made handmade posters using my father’s typewriter and then pasted them on any wall I could find. This was my first carpet bombing exercise.  I decided to charge a fee of Rs 50 per team to accept a form and I sold them at Rs 2/- per form, because there were no photocopying machines so every form had to be typed using 3 carbon papers. Within days I had enquiries and by the end of the second week I had about 21 teams participating.

Elated, I was on cloud nine. And this was my first lesson-when things are going good always be on your guard. In the joy of my initial success of registration I had forgotten to look at the minute details of my enterprise. Even a tiny chink in the armor can bring a kids world crashing down to its knees.

Although people had registered for the event, nobody had yet paid me a single paisa for the registration. I still had to get a ground to play the matches on, get the equipment and most importantly get people to come see the game! I was building castles in the air, like a lot of startups do. I should have built my foundations first.

I was two days away from the event and I still didn’t have anything that even remotely resembled a ground and no one would lend me their farm lands to play a game in! In the end out of sheer desperation I had to persuade the local Railways Assistant Engineer, to rent out their cricket ground “free” of cost. Not that it was much of a cricket ground, it could barely even qualify to be a playing ground. No grass, lots of pointed stones, ant hills and nothing that could even remotely resemble a pitch.

With just two days away, I had to buy, beg or borrow equipment to stop myself from becoming the town’s clown. I therefore approached my first investor, the Assistant Engineer to persuade him to lend me the railways mat. He gave me a hard time and called me fool hardy but relented after all.  The next day I announced that all the teams would have to get their own balls and bats and stumps would be provided by the organizer i.e. me.

By the end of the day I had finished all my pocket money and had to borrow Rs 150 from my father. I felt ashamed when I had to explain to him how I had managed to finish my month’s  pocket money in one day. This was my second most valuable lesson. I hadn’t planned the execution and had gone about the entire organizing in an ad hoc manner which caused me to lose all my valuable resource. A very important lesson for any startup- always plans ahead and plan for a B and C as well.

Being low on every possible resources, the umpires had to be volunteered free of cost. This meant that they were unreliable and would sometimes not turn up. By the second match I had to create a “stand by” team of umpires that consisted of just me. There were other things which I had not looked into at all and which at a further stage created quite a challenge. I had not bothered to frame the rules thinking that people would play fair.  I was dumbfounded when the tournament started and I noticed one player was playing for 2 teams at a time!

I don’t exactly remember what logic or explanation the boy gave at that time for this but until then I had not anticipated such an event to occur. I quickly took the help of a series of retired uncles who were the self-proclaimed arm chair cricket experts of this game in the town, called it an “expert committee” and literally passed the buck to them to take the tough decisions.

I still vividly remember the final match. As the match came towards its end the trophy had to be given, I had a motley crowd of about 1,000 people watching, jeering and cheering the winners and the losers. The Mayor of the town was the chief guest for the award ceremony. The man backed out at the last moment. I was crestfallen. I went to my father and pleaded with him to be the chief guest. Although he was a very busy doctor, looking at my earnestness he left all his work and accompanied me to the Mayors house and literally bullied him into coming for the function.

All in all that summer was one of my best class in the subject of entrepreneurship. It taught me lessons which have till date stuck with me. The following summer, I recounted my hard earned lessons and applied every one of them. I became choosy in the teams that I let participate, hired a treasurer who would make sure that the money was paid first and then the team names were registered and announced. That summer I had surplus of Rs 650/- and I returned my father his loan of the previous year. I also gave a cricket kit from the remaining Rs 500/- to the man of the match called Raju Ugale, who was as a talented boy.

My summer holidays had now become my learning grounds. I learnt that to be an entrepreneur one needs lots of enthusiasm, an ability to be blind to some of the obvious risks and that if you get too focused on the risks, you will be paralyzed into in action.

My biggest lesson I learnt was the lesson of leadership. From making the posters, to drawing the teams , from framing the laws to the appointment of neutral umpires, all became my head ache. Every twist and turn was unexpected. We had accidents, people breaking bones and getting hurt.   It was all about “ambiguity”. It was the first time in my life, I had handled ambiguity and I loved every minute of it.

On hindsight if I were to sum up all the lesson that I’ve learnt from that childhood experience and the ones which I still apply even to this day would be:

• There is boundless joy in working on your dreams and not just waiting for them to come true.
• Reward people who help. They want something, usually recognition in return. I should have called the Assistant Engineer of the Railways as the Chief Guest for his generosity.
• There is no joy like the joy of creation.
• There is no fear like the fear of failure yet there is no high like the high of having done something successfully.
• There is nothing more certain than uncertainty.
• The art of questioning and anticipating problems are skill sets every entrepreneur requires.
• The “game” is more important than the leader or the people who run it.
• People will always criticize you no matter how fair you are.
• The power of an idea is so great that it can move thousands of people to either join the dream or the dreamer. This I think is a lesson every entrepreneur must learn. He must have the ability to articulate his idea in a surreal dream, reachable yet challenging, satisfying yet full of ambiguity, the credit of success is every ones, the responsibility of failure is squarely on the shoulders of the Leader.
• People eventually respect you for your ability to convert ideas into reality.
• Be restless. Constantly. If there is too much certainty, you are heading for big time trouble!

How did I end up becoming an Entrepreneur?

I grew up in a small town near Pune called Daund. My father was the only Doctor of the town and had become a larger than life figure in the town because of his philanthropy. As a child I was extremely shy with low self-worth and had great fear of authority. I was a loner and hardly had any friends I could connect with.

I had one hobby that occupied all my waking hours as a child-reading fairy tales. I loved those vividly coloured books and would get lost in the world of justly Kings and beautiful Princesses and the poor boy who would in the end win the hand of a beautiful princess. It was always the victory of good over evil.

I had a world of my own, which I could create and change and modify, and make it colorful, make it smell beautifully, and imagine the princess as the most ethereal creature on earth. This is where my journey in entrepreneurship began-as a dreamer. To dream is so beautiful and limitless.

I do think all entrepreneurs have the power to dream and have vivid pictures of what they dream about. How many of you out there who have started their own ventures have started out like me? Or was it the opportunity that propelled you?

Do share.

Welcome to my blog!

 

Welcome to my blog and thank you for spending time here.

If you don’t know me or what I do and haven’t yet read my about me page then here is a brief on where I come from and what I do.

I’m a serial entrepreneur turned teacher/coach/mentor. Over my career spanning 3 decades, I have started three successful ventures and one not-for-profit Educational Institute-FLAME.

While at FLAME I taught Entrepreneurship and actively mentored the start-ups and students there.

This blog is an extension of the classroom learning and a platform for meaningful interaction and  exchange of knowledge and wisdom.

Hope you enjoy my coming posts and do contribute so that we both can benefit from this opportunity.