Archive for August, 2013

Rethinking the Role of a Bank

August 31, 2013 3 comments

Can banks transform themselves to remain relevant both in the financial economy and for the network economy?

Traditionally, the role of the banks have been to be collect money from people who have money, aggregate the same and loan out the money to people who needed it. The banks were needed as there was no way that people who had money could know about other people who needed the money. Also, banks could assess the risks associated with the loans and cover the risk by way of lower, but guaranteed returns on income for people who deposited cash with the bank.

That condition has changed with the emergence of technology. This has been proven by companies like kickstarter where the people who need money set-up online profiles and people who have money can find the people whom they would like to give away or in some cases lend their money for something in return (could be cash or kind).

Still banks are acting as if their environment hasn’t changed.

Now, in order for the bank to provide guaranteed returns to the customers, the banks generally avoid giving out unsecured or medium to high risk loans.

Now if the banks can create an online platform where, all the loan applications that the bank wants to refuse are listed, with all the relevant information. Access to this platform is provided to any customer who wants to be an investor. These investors can then see these loan applications, access the risk potential and then decide if they would like to take the risks and approve the loan. If they do, the bank then charges the amount from the investor and provides the loan to the applicant and on what terms (rate of interest, duration of the loan, collaterals, etc).  The contract could be between the investor and the loan applicant, where the bank becomes a mediator. The bank can charge a fee to the applicant and the investor for providing this service.

This will help everyone involved. The investors have the potential to earn a much higher return for their savings in the bank; loan applicants who are willing to pay a higher interest in return to a loan that is made available to them (which otherwise they cant get) and the bank my derisking their portfolio and at the same time increasing their profitability.

The banks can also start creating credit ratings for both investors and the loan applicants which they can then use for subsequent transactions.

Also, if the product or service is successful, the bank can start doing this for all loan applications and hence totally de-risk their business while continuing to be profitable.

The banks can also enable commerce between their customers. They can build a platform where their customers can buy and sell their products/services and charge a small percentage of the transaction value as a service charge. They already have a huge list of businesses transacting with them. This platform only enables connections between these businesses.

Both these ideas are meant to transform banks from just managing money to connecting people and enabling commerce. This is exactly what the networked economy model rewards.

Do you think these are feasible ideas? Do share your thoughts so that we can discuss this further.

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Innovation Isn’t an Idea Problem, Nor is it a Recognition Problem

August 30, 2013 1 comment

In a recent HBR article with the same title, David Burrus argued that Innovation is a recognition problem. He also went on to propose a solution to this problem, one that Rhode Island based Rite-Solutions is already using. The general idea is that people are given a certain fixed amount of virtual currencies (say 10000$) which they can invest in any of the idea that is proposed on their internal idea site. This could eliminate the bias of any one or a set of executives, who are usually responsible for deciding on the feasibility of any particular idea. In my opinion, Innovation isn’t an idea recognition problem either as argued by David. In my opinion, Innovation is a culture problem. No matter how many processes you set-up or programs that you run in your organization to foster innovation, you can truly support innovation only if the entire organization culture supports innovation. Some things that an organization needs to inculcate in its culture to foster innovation in their organization are:

  • Clearly define Innovation: Adding new features or functionalities in an existing product or services don’t qualify as innovation. These are product/service improvements and should be treated such. In my opinion, Innovation is only when you are able to create a new product/service, a new way to deliver or distribute it, a new business model, etc.
  • Set-up boundaries within which you want to innovate in. It is very well known that we are more creative when we work within a set a boundaries. Still almost all organizations fail to set-up boundary conditions within which they want their employees to think about.
  • Transparency in the process: It doesn’t matter how the organization wants to manage the ideas that their employees generate. What matters is that these employees know who/how is their idea being evaluated by. This transparency ensures that employees do know that their ideas will get a fair audit.
  • Option for employees to continue to develop their ideas inspite of it not getting through the process: This is another step where almost every organization fails. They have in place an idea management process, they pick the ideas (based on whatever is their criteria) that they want to continue to invest in and the rest of the ideas are rejected. However, history shows that some of these rejected ideas have gone on to become multi-billion dollar enterprises. Instead of rejecting these ideas, organizations can provide an option for the employees to continue to work on their idea based on the following conditions:
    • The organization will provide x% of the funding. The employee brings in the other rest of the funding. They are free to get their share of funding from whatever means that they are able to. The conditions for a successful project is clearly articulated (a big bonus or a share of the new business if it leads to a new LoB).
    • Till the employee is working on the project, he/she stops getting their salaries (Maybe they can provide a small % of salary to encourage more employees to go this route).
    • Once the funding is exhausted, and the employee is not able to procure further funding (internal or external) for the idea, the employee is absorbed back in the organization.
  • Rewards/recognition: The rewards and recognition policies also need to be in place. Ideally, this should be a combination of non-monetary and monetary recognition and in that order. The recognitions should not just be limited to those who have had a successful idea. The organization should also celebrate the employees who tried to innovate and were not successful. Both the successful and the not so successful people should get to share their story with the organization. 
  • Connect & Combine: Organizations should be willing to support and nurture networking across organization. One of the most important attribute to build a culture of innovation is for your employees to be exposed to different points-of-views. They should be able to build a network of people who are willing to mentor, partner and promote the employee when needed.
  • Executive Buy-In: One of the most critical aspects of building a culture is executive buy-in. It is the CEO’s job to ensure that there is continuous investment and progress made in building and sustaining the culture of innovation. It is his job to define the boundary conditions. It is his job to not only celebrate the organization successes but also to talk about their failures and the lessons learnt from them. This is one single action that can go a long way to building the culture of risk taking and innovation.

These are some of the steps that an organization can take to create a culture of innovation. Unless employees see this culture, no organization will be able to sustain their ability to innovate on a continuous basis.

What do you think about innovation and how to build the capability of sustained innovation in an organization? Do share your thoughts on the same so we can continue the discussion.

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Don’t Just Create Content, Create Curiosity

August 27, 2013 Leave a comment

Nothing has had more impact on the amount of content being created than the advent and growth of social media.

There has been a growing consensus that every single brand is now a media by itself.

Every brand is continuing to generate content at a speed at which their consumers are not even able to consume the content.

The shelf life of any content is reducing drastically and for most of the content it is just a couple of hours from the time it was created or promoted. This has led to a slew of promotion of content, across media, which is not necessarily good or bad by itself. Its just like shouting loud in a crowded bazaar so that our customers can discover us and our content.

Another reason for this enormous increase in content is the change in buying behavior or most consumers/customers. Now, before we even contact our supplier or decide to buy a brand, we go to the social media and want to read or find out what our friends have to say about the product. We want to know what experts say about the brand. What do other customers who have bought the product say about their experience.

What this forces the marketers to do is to attempt to create content that can answer almost any question that we might have. The content also then becomes a vehicle to sell the brand promise to us.

Among all of these challenges, marketers, forget the most basic tenet of marketing. They have forgotten that the first step in any marketing campaign is to create curiosity; Curiosity in us to find out more; curiosity in us to explore more.

In the recent times, I think Elon Musk did a great job of creating curiosity about his HyperLoop. He started creating curiosity months before he actually unveiled his idea. And when he did present the idea, the publicity that he got was unbelievable. No amount of money or advertising or great content could have bought him the kind of attention and engagement he got on this topic.

Though a lot of this could be attributed to him being who he was, but still I would consider this event as a clear indication that curiosity will always trump content.

It is in human nature to be curious. So, smart marketers will realize this and tap into this aspect of being human and find way to create curiosity.

We become curious when we get to know about something just enough to want to know more. This is where good marketers can rely on the art of story telling. You reveal only so much that people want to know more about it and then some more.

Lady Gaga creates curiosity about her outfits, songs and gigs in every interview she gives.

Apple does this to a certain extent as well. They ensure that there is all kinds of speculation going on about what it is that they are going to unveil every time they are about to do it.

Have you come across a campaign that has used curiosity to get their customers/prospects hooked and wanting for more? Please share these stories with us. We can all learn from these stories.

You can connect with me on twitter, linkedin, facebook or email.

PS: There is a lot that marketers can learn from master story tellers like Alfred Hitchcock, Steven Spielberg, etc.. Here is a clip where he talks about cinematic tension. This is exactly what marketers need to master to get their customers/prospects to keep coming back to them. Enjoy!

To Transform your Organization, Give a Shit

August 26, 2013 Leave a comment

One of the most difficult thing to do in a business as a CEO, is to successfully transform the business. The success rates of most of these transformation efforts show that most of these don’t succeed, which in my opinion is an understatement.

Yet, a lot of CEO’s find themselves at a cross-roads, where they need to transform their organizations or see them remain a shadow of their past or in certain businesses, go out of business. There are a lot of industries that are going through such a transformational change.

So, what would you do if you were a CEO of an organization that needs to transform itself in order to remain relevant in these times of turbulence and become future ready?

In my opinion, you need to identify one thing that you deeply care about and one that is so key to the transformational journey that you want to take your organization and “give a shit” about it or make an emotional connection to this one aspiration. These are called Keystone habits. One that can create a ripple effect on almost everything that you and your organization do and how you do it.

It is not just enough for you to do this, but you need to identify & reward people in your organization who show similar zeal and emotional connect and reprimand employees who don’t.

One of the keystone habits that you can use is “Customer experience”. I would recommend that you “give a shit” about how do you serve your customers. As CEO, you need to demonstrate that you not only cares about how your customers are being treated by are insanely paranoid about it.

Once your teams see that you are insanely paranoid about how customers are being treated, you shall start seeing a ripple effect on how new products are being developed, how your customer service reps start treating your customers, how your sales teams start engaging with your customers. All of this will also have an impact on how your customers perceive about you and your organization.

This is just an example. Even if you are not leading your organization through a transformational journey, you can still use the same principles and give a shit about some thing that you believe in: It could be about environmental sustainability, it could be about innovation, it could be about taking care of the community in which you do business, it could be about taking care of your employees or partners or about anything that you feel is important enough.

Encourage your employees also to identify and give a shit about whatever it is that they feel strongly about.

We humans are emotional beings but for decades we have asked our employees to leave emotions behind and work rationally while at the workplace. I would encourage you to build an organization which not only acknowledges the fact that we are emotional being, but also celebrates the same.

The key is to create an environment where you navigate these emotions and channelize them into creating a culture of engaged employees. In my opinion, engaged employees can play a key role in the success or failure of your organization. If you are able to do this well, this can become your sustainable competitive advantage, one that cant be easily replicated.

I would love to continue the discussion. Do share your opinions and we shall understand this topic better, together.

You can connect with me on twitter, linkedin, facebook or email.

PS: I came across an interesting video that inspired this post: Enjoy!




Categories: Uncategorized

New Business Model from Very Unlikely of Places #Publishing

August 23, 2013 Leave a comment

I stumbled upon The New Enquiry by chance and was totally blown away, both by their content and their business mdoel.

They are an Ad-Free online magazine & survive by the way of subscriptions (2$ per month) & donations. And they don’t have a firewall.

So, for all practical purposes, they create and share content that is free for anyone to consume but still people are willing to pay subscription to receive the same content but in coherent, thematic clusters, which is more intuitive and easy to read.

In an interview given to “Columbia Journalism Review“, the founders claim that they recieve 30 to 50 new subscribers every week.

They also serve a very niche audience, the one’s that want to be at the intersection of culture, arts and politics.

They describe themselves on their about page as below:

The New Inquiry is a space for discussion that aspires to enrich cultural and public life by putting all available resources—both digital and material—toward the promotion and exploration of ideas.
Though these are early days for them, I am sure that they will find ways to not only survive in this hyper-competitive world, but will also become more and more relevant to thier tribes (as Seth would describe their subscribers).
This also reminds me of the TED talk by Amanda Palmer where she talks about her exeprience with her fans. She talks about the art of asking. Can this be a valid pricing model?
Both Amanda and TNI have identified their niche audience and have sought their support successfully.
Their story also make me realize that we strive to find complex solutions for problems, while simple and easy solutions to the same problems could exist right infront of our eyes.
Almost every one complains about advertising and advertisors, the disruption in the advertising & publishing industry;  they just went ahead and eliminated advertisements altogether. What an idea!
How many such things do we complain about can be removed? A wise man once shared his wisdom about solving problems:
  • Connect the un-connected & vice versa
  • Bundle the seperate and unbundle the bundled
  • Turn a product to a service and a service to a product

The best way to solve a problem is to “SKIP IT” and I think this is exactly what these folks did.

The question that you need to answer yourself is the following:

What problem or challenge are we struggling with and one that you would be better off SKIPPING? What product are you going to turn into a service?

Do join in the conversation by sharing your thoughts by commenting below.

You can connect with me at Twitter, LinkedIn or Facebook.

PS: Pay as you want pricing model has been around for a long time now. More information @ What happens when the newspaper industry adopts this model?

Why it is awesome to start a company when there’s a downturn

August 22, 2013 Leave a comment

Totally cool advice for a lot of people wanting to start off on their own. No time like now!

Best Engaging Communities

Over the last few days a slew of bad news on the economic front (falling currency, stock market tumbles) has had many entrepreneurs and folks in the press ask me if they should put off their entrepreneurial venture to a later year.

My own experience is summed up by an attitude I developed many years ago “Everywhere I go, I always take the weather with me”.

The best entrepreneurs dont care what happens around them. They are acutely aware, keenly observant, but largely undeterred and unconcerned – about the economy, macro conditions and price of fuel.

There are 3 great things about downturn.

1. There are far fewer companies starting, because the fence-sitters develop cold feet. So the “competition” is much less.

2. Since there are far fewer companies starting, the fight for both talent and funding is less so. I hired the best folks in 2001 and again in…

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Categories: Uncategorized

Creating Raving Fans for Your Brand

August 22, 2013 2 comments

Is it possible to create raving fans for your brand and that too with not too much budget?

Of course. In fact, the more budget you have, the more difficult it becomes to create raving fans.

How does one go about building these raving fans?

“Create One Fan At a Time”.

In all our eagerness, we forget that this is the only way you can make fans out of your customers.

It helps to have a great product/service that adds value to your customers’ lives. As Seth Godin said, people do not buy a product or service. They buy into a promise – a promise you make to the customer.  It doesn’t matter if your product or service is competing in a space as a commodity. You can still make fans of your product.

We need to realize that people inherently want to be a fan. They want to talk about their experiences to their family, friends and their social circles. Now, the only thing that we need to do is to give them something to talk about.

So, some thoughts/ideas that you could consider are:

–       Pick one customer per day per employee to delight. This can be a totally random selection or a carefully thought out selection.

  • For example, if you are a sales executive, you can decide to pick one of your customers (individuals) and do something unique and unexpected for them.
    • Send a hand-written note to them thanking for their continued support or
    • Send them a book that you found interesting or
    • Send them a bouquet of flowers or
    • send their boss a hand-written note highlighting something that your customer did that caught your fancy.
  • If you are a customer service executive, go out of your way to service the 2nd customer that contacts you.

–       Make it easy for that customer to share the excitement with his friends, family and social networks.

–       Make it easy for you to share the excitement within your social network. Take pictures, quote, shoot a video or simply record a conversation. Then share this with your network of other customers, suppliers and employees.  Make them look like a “HERO”.

Instill the discipline in every employee to do just this bit; every single day.

Now the question is how do you inspire your employees to do this. Just asking them would not help. Forcing them to do something by way of implementing a policy or a process might work for the short term, but will be difficult to sustain.

This is where you as a leader need to do the same with your customers (employees). Delight an employee every single day. Make it their while to be a part of this wonderful culture.

Send flowers, chocolates, hand-written notes, videos, posters and surprise one employee, every other day.

It takes inspired employees to create raving fans. Do your bit and see them work their magic on your customers.

Do you agree with this approach? Do you think this will create raving fans for your product or service? Let us know your thoughts by responding to this post.

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PS: Ken Blanchard talking about Creating Raving Fan