Archive for the ‘Strategy’ Category

Where is my money?
Figures say that for 1 USD we donate to NGOs, on an average only 70 cents goes to the actual cause.
Rest 30 cents are wasted as fundraising and administration cost.
As per global trend people are increasingly willing to donate today,, but they want each cent of their money to be utilized for the real Purpose. Whereas, in the wake of such facts people end up asking “Where is my money!!?”

This high administration and fund raising cost severely affects NGOs Productivity and Efficiency. 
NGO Productivity   α Total Funds Raised for the cause.

NGO Efficiency (%) = Funds Used for Cause
                     Total Funds Raised
Fund Raising Efficiency = Total Funds Raised
                           Fund Raising Cost
Problem defined:
‘How can NGOs increase their Productivity and Efficiency?’
Reasons explored:
If we assume that all the funds finally available (after deducting fund raising and admin cost) to the NGO are being used completely for the cause then there are two clear factors that affect Productivity and Efficiency of NGOs.
1.  Total Funds Raised
2.  Cost of Fund Raising
So, what are the reasons that are holding back NGOs on these parameters?
1.  Total Funds Raised
a)  Limited Geographical Reach – Fund raising activity is limited to area of operation.
b)  Limited Penetration/Awareness – Even in the area of operation not everyone is aware of the NGOs.
c)  Lack of Credibility – I don’t know if my funds will be completely used for the cause.
d)  Lack of Tangibility/Transparency – I want to see where my funds are being used.
e)  Limited Resources – Limited volunteers and resources.
f)  Poor supporting technology infrastructure – Not using adequate technology and infrastructure because of limited funds.
2.  Cost of Fund Raising
a)  High fund development cost – Capturing new private and corporate donors is costly.
b)  High Marketing Cost – High cost of marketing, road shows, awareness campaigns, etc.
There is a need for an efficient fund raising channel for NGOs.
Solution Proposed:
A web based ecosystem for NGOs
An Internet portal to provide a one stop website solution to connect global donors and various (participating) NGOs.
However, it is not simple as it seems to fill the gaps by simply building a portal.
The portal should be designed to fully exploit the potential of Web 2.0 (Interactive web, social networking, facebook, twitter, etc.) to reach millions of users.
Some of the desirable features of such portal could be:
·         A large user base.
·         Integration with social networking sites like Facebook, Twitter, etc.
·         One Stop Solution for various NGOs.
·         Country, NGO and Project level Transparency.
·         Making donation a fun process.
Potential Benefits:
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I was reading about penetration of social websites and micro blogging and their relevance in today’s business context when one thought suddenly flashed in and left me wondering.

If we trace the Internet presence of companies/businesses over the last decade, there is a surprising trend that emerges. To make things more clear, let’s go back in time and trace some trends in internet space with context to Companies and Businesses.

Time: Early 2000s
Internet Presence: Company Website.
Use/Content: Content Sharing. Mainly used for sharing Company specific content. Products, Solutions, Success stories,etc..
Content Update Frequency: Long intervals. Usually Months or Years.

Time: Mid 2000s
Internet Presence: Websites + Blogs
Use/Content: Experience Sharing + Content Sharing
Content Update Frequency: Shorter Intervals. Weekly or Fortnightly.

Time: Late 2000s
Internet Presence: Websites + Blogs + Web 2.0 (Micro Blogs + Social Network) Presence
Use/Content: News update + Updated Customer + Experience Sharing + Content Sharing
Content Update Frequency: Even Shorter Intervals. Daily or Weekly.

So, tracing the internet presence of companies, the trend shows that focus of companies have moved from ‘uploading large content less frequently’ to ‘updating smaller content more frequently’. Strange trend…

Either companies have become more customer centric, OR, it is just another battle for consumer’s mind space where companies are trying to engage customer on a more frequent basis.

The thought just left me wondering, after short and sweet daily updates on Twitter, what could come up next? Is there anything shorter than Tweets being developed somewhere!!?
Watch this space for more such thoughts.
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How can small businesses attract good talent?

Small businesses have always struggled to attract good talent.

Thoughts on this started with a writeup by Raj Shankar on his blog. Raj says in his blog that “Small
businesses need to stress on the importance of the role, job, person to the
institution and impress on the best graduates to join them.”  Read Raj’s blog “Small Business and Talent: An Irony!” here

Now, to dwelve further and to understand the reasons for this gap, we can borrow some concepts from some management principles. Broadly, I can see four guiding
principles on which most of these decisions about individual salaries and small
businesses are based.
Demand and Supply – market
determines which talent to price how much.
Contribution i.e. value addition –
The more a person produce/contribute/value-add more he is rewarded (salaries,
incentives, recognition, etc.). So, it becomes difficult for a person to leave
a high paying job to take more responsibilities with low salary. However, when
other rewards (like recognition, achievement, etc.) are plenty to balance the
salary factor then people are sometimes willing to consider the change.
High Risk, High Gain – For a job
with high risk i.e. small business (unpredictable sales, salaries, etc. in
initial phase) a person should get higher rewards. Again these rewards can be
monetary or motivational.
Maslow’s hierarchy 🙂 – First
priority of a person is to get a decent income to sustain a decent living
(physiological and safety needs). Once this is achieved, people start thinking
of other things like esteem (achievement, recognition, etc.). However, there
are some rare exceptions.
So, person create/produce/contribute something based on his
talents. This contribution is priced based on demand and supply. The market
sets his price/salary for the contribution he is making. More talented attracts
higher price tag.
Now, he is getting a high market salary in a big established
brand/MNC for his contribution. Then going to small business means higher risk.
So, person will be willing to switch only if rewards (salary + incentives +
motivation) are higher. At this point if the person has already met his
physiological/safety needs then he is ready to switch for motivational purpose
otherwise he works for salary to meet his daily needs.
Also, when a graduate comes out of college he is struggling
to get his daily needs right (physiological/safety need), so they first look
for a job, any job and if options are available then a good salary package.
Once this is achieved, a job is secured, they start thinking of other things
like esteem, achievements, challenges etc.
So, what is the solution? 
Considering all these factors for small business we can
see that if a small business (mostly in growing phase and lesser stable than
stable brands/companies) wants some good talent they can get it by one of the
(higher) salary and incentives.
opportunities for motivation (challenges, achievements, learning etc.)
Small businesses usually don’t have fat cash reserves. So,
the options to explore this alternative are limited.
Freshers, entry level employees – Still small businesses can manage
decent salaries as the baseline salary for entry level is low.
Mid management and senior management – Companies can offer them lower
fixed salaries + Motivational incentives like equity, ownership, commissions
(e.g. percentage of sales they bring to companies). However, here small
businesses have to also ensure that people they are hiring share similar
passion for the work and vision of the company. If they can find people who
share similar higher purpose (life’s purpose) then that is the best bet.
 For any of this to happen the bottom line is that small businesses need to highlight the opportunities to find
people with similar passion and purpose. They have to ensure that their
customers and employees are the evangelist of their company. 

Recently, I read the Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne.  I found the book to be a must have Strategy book. What makes it different from some other books in the same genre is that you can put to use some actionable frameworks from it.
Concepts like strategy canvas and 4-action framework are worth exploring.
Strategy Canvas captures (competitive/investment) strategic focus of a company on a graph. We can plot different segments within the industry to see where the focus of each segment lies.
Once the competitive factors are identified and strategy canvas is plotted, next step is to apply the 4-action framework to the factors.
The 4-action framework asks us to consider the identified factors and further:
Eliminate – Remove some of the factors from your strategic focus.
Reduce – Reduce focus/investment on some of the factors.
Raise – Identify the factors of strategic importance to you and raise those factors.
Create – Identify the new factors and induce them into the competitive factors to create strategic shift.
Bingo! You will identify new strategic initiatives to set company on a high growth & profitability path and, which would make competition irrelevant. Simple…
Sounds to be simple, however, applying 4-action framework is not as straightforward as it seems.
To identify new factors and the factors which needs to be reduced, eliminated and raised is a bigger challenge.
To identify these factors you have to look across user needs, across different markets, across industries, across demand, across time, across channels, etc. A lot of brainstorming in these areas taking along the strategic intent/direction of the company is a must to strike the gold.
Even after strategic initiatives are identified, there are more important aspects to put strategy into action. Execution!
Book is a great attempt to cover this entire process and also to give a direction on how to go about this.
Enjoy the read.
P.S. Can we develop some more actionable frameworks around these concepts? Let’s see.