EDI AND GCCI organizes Leadership Series

EDI in collaboration with GCCI organized Leadership Series at EDI campus. Mr. Andrew Cohen was the first speaker of this series at our campus.

Mr. Andrew Cohen, who is an American Spiritual Teacher started the lecture by saying that he has observed that the Indian Youth are inspired to get a good job followed by a satisfying married life, to have kids, who in turn should be well educated and should get a good job… and so this circle continues. He said that today’s youth should answer the question “Why am I doing what I am doing?” to get out of this trap.

In order to discover the answer for yourself, the first step you have to take is a big one: you have to be willing to let absolutely everything go. You have to take a journey to the deepest dimension of your own self, a journey that will lead you all the way back to before the beginning—before anything ever happened, before the universe was born. Before the beginning, there was no time, no form, and no space—only absolute emptiness. Before the beginning, there was nothing . . . but you were there.

He also said in evolutionary spirituality, we are more interested in the future than we are in the present moment because the present moment has already happened, so there is not much that we can do about it. We’ve already arrived there. But the future, which always exists in the next moment, is something we can actually impact.

Earlier people used to follow gurus to attain “moksha’ but now the stress level is so high that the guru’s are teaching ways to reduce stress level. The lifestyle of today’s generation is such that they don’t want to think deeply , instead they want a comfortable life.

We need to think deeply as that’s the real solution

Job-less Growth in India after Liberalisation

Job-less Growth in India after Liberalisation

Various Literatures have argued that by economic reform introduction, flexible norms in labour markets are applied through several de facto measures, such as contractual employment, outsourcing, and intentional ignorance of labour standards etc.. By allowing capital goods of huge size and nature that displace labour in vast amounts, it led to a massive change in the structure of industries in favour of capital intensive industries (Singh, 1993; Papola, 1994). Efficiency and competition became the key words. In the name of cost rationalisation, voluntary retirement schemes are introduced and labourers are sent out with golden handshake. Appointment of part-time and casual employees is taking place in large number. Due to privatization policy, public sector began to withdraw from several areas for which public sector employment has declined by more than one and half million jobs since 1991. Faced with the process of internal liberalisation and of globalisation even in the private sector, industrial units started shedding excess labour and to compete with foreign players, new technology was increasingly introduced, resulting in loss of jobs. The new liberal economic policy regime marked by an increased competition on the one hand, greatly improved access to foreign technology and imported capital goods on the others created among the industrial firms a drive towards the adoption of advance technology which led to increasing capital intensity of production and reduces the employment growth. As a result the employment as a whole has come down after liberalisation period. Thereby, reform process resulted in acceleration of GDP growth without a commensurate increase in employment [Visaria and Minhas (1991), Deshpande (1992), Mundle (1993), Bhatacharya and Mitra (1993), Ghose (1994), Kundu (1997), Datt (1994, 1999), Bhattacharya and Sakthivel (2004) and many more].

Even the latest employment data released by NSS 61^st round of ‘Employment and Unemployment Situation India’ suggests that creation of employment opportunity has come down from 1.95 percent in pre-reform period (i.e. 1983 to 1993-94) to 1.27 percent during post-reform period (i.e. 1993-94 to 2009-10). Such deceleration of employment growth has occurred due to a massive fall in employment growth (i.e. 0.02) in medium term phase i.e. 2004-05 to 2009-10, despite a higher output growth from 6 percent to 8.6 percent in the Indian economy in the same year.

In a sectoral approach, Indian agriculture has undergone a substantial change in the institutional setting over the period. The post 1991 economic reforms, however, did not target agriculture directly, but nonetheless, it received the impact indirectly from the macroeconomic policy and other institutional reforms [Chand, Raju and Pandey (2007)]. The deflationary policies aimed at reducing aggregate demand and fiscal deficit led to slowing down of public investment in agriculture (Chand 2005), reduced the availability of institutional credit (Shetty 2006), reduced the subsidies and market support. This is increased cost of production, deteriorating terms of trade (Rao and Gulati 2005), leading to increased indebtedness and market risk. The net effect is a marked slow down in the agricultural growth rate and rapid decline of its share in GDP. As a result, output growth during the post-reforms has declined to 2.68 per cent from to 3.41 per cent during pre-reform period. This declining growth also adversely affects the employment creation in the agricultural field, where growth of workforce has come down from 1.34 percent in pre-reform to -0.05 percent in post-reform.

Though industrial sector reform took place before the economic reform but a concrete shift in the policy towards liberalisation, abolition of licensing, near complete import liberalisation (barring agricultural products), rationalisation of tariff structure, opening up major sectors for foreign direct investment, capital market reforms, exchange rate reforms, and financial sector reforms comprised completely a comprehensive framework to mark a shift towards a new industrial policy. The performance of industry in the new changed policy regime after 1991 reforms has shown more than 7 per cent during post-reform period over 5.56 per cent during pre-reform period. Among the sub-sector of industrial sector, it is the construction sector that performed a higher growth in post-reform period followed by manufacturing sector. But the employment creation in industry suggests that construction sector shows a higher employment growth, where manufacturing sector grew at a declining rate (due to higher capital-labour ratio that displace more labour). It can be said that industrial sector employment has gone up due to high and significant contribution from construction sector, but the quality of employment in that sector may not be good.

The turn around in service sector as an engine of growth in the India’s growth process is noted to have occurring since as early as late seventies [Balakrishnan (2005)]. The recent trend also suggests that services sector has also grown rapidly. More interestingly, its growth has, in fact, been higher than the growth in other commodity-producing sectors such as agriculture and manufacturing sectors. The growth of services sector has grown up by 8.66 percent in post-reform from 6.45 percent in pre-reform period. The remarkable sectoral performance of the services sector as a whole has been reflected in the select lead indicators of the services sector i.e. transport, storage and communication and trade, hotel and restaurant. Despite a higher growth I services output, employment creation has not yet significantly gone up during post-reform. The trend suggests that there is a declining growth of 1.02 percentage point in post-reform from re-reform phase. It is due to a massive fall in growth of community, social and personal services.

On a whole, with the introduction of liberalisation, privatization and globalization that leads to raises the output growth which has shown a declining employment growth in post-reform period in the economy at an aggregate as well as disaggregates level. In light of these results, it appears that the jobless growth has now become a serious problem in the Indian economy despite the continuous efforts that have been made to fulfill the employment led growth objectives. Therefore, the new employment creation will depend on the nature of the employment, technology and structure of the economy.

Deepak Kumar Behera

Assistant Faculty,

Entrepreneurship Development Institute of India

What small business has to learn from large enterprises?

Time and again some of the scholars have written and documented what large enterprises have to learn from the small businesses; especially the flexibility, agility, entrepreneurial zeal and ability to manage things with lean systems. The emphasis is especially on the fact that ‘small is beautiful’. This is true, an enterprise of any size needs to be flexible and fast enough to respond to the market changes and small enterprise where the decision making is fast surely has an edge over others.

In this line of thinking, I wish to focus on certain areas where the small business has to learn from the large enterprises. The first thing what a small business has to learn from large enterprise is the process orientation. It is found that small businesses lack this orientation and this puts a limit on the scalability of the organization. Business activities and processes which are standardized helps in many ways to a small business. Small businesses needs to put the systems and processes in place and with decreasing cost of certain technology this is possible and feasible.

Another thing which is essentially needed for enterprise of any size and mainly small business is the strategic thinking. Small businesses need to learn the strategic thinking and strategic management processes from the large enterprises. Talent management is another area which demands attention of small businesses nowadays and especially in knowledge based industries. It is seen that small businesses have need based man management system, rather than a strategic view of talent management. This is one more thing which small business has to learn from large enterprise. Not only this if the entrepreneurs wish to professionalize their operations then they might have to adopt objective way of managing people and their performance.

Focus on branding and marketing is another aspect of business, which is often ignored by small businesses and this, is the area where the large enterprises score well. My argument is not to spent huge money on advertising and promotion, but a consistent and careful approach in crafting the value proposition and focused marketing. What is needed for small businesses is to learn from large enterprises ‘outside in’ approach and outward thinking. In line with large enterprises, small businesses should look at developing and building the platforms and not just the products.

Scalability is another thing which a small business should learn from the large enterprises. However, if the points mentioned are considered, it would be easy for small businesses to scale up. And finally, the financial discipline is another thing which small businesses need to learn from large enterprises. Absence of centralized budgeting systems and annual financial plans often leads to inconsistent decisions related with finance in small enterprises.

Small is surely beautiful. It is observed in the recent past that large enterprises are burdened by their weight. In such scenario, large enterprises have become inefficient and very expensive to manage. However, small businesses have a lot to learn from large enterprises.

Dr. Rajiv Joshi

Associate Sr. Faculty, EDI

Giving For Those Little Shoeless Feet

I found interesting story about TOMS and Mr. Blake Mycoskie. Blake is from Los Angeles, and is the Founder of TOMS (www.toms.com). TOMS represents “Shoes for a Better Tomorrow”, and not any Mr. Tom. Blake is an entrepreneur. Before starting TOMS company, he has started five ventures, one of those has been a very successful national campus laundry service. TOMS makes shoes and eyewear for young men, women, and children. But style and designs are not just two things for which TOMS exists.

With One for One movement, TOMS has really Started Something That Matters. Under One for One movement, for every pair of shoes purchased by the customers of TOMS, one pair of new shoes is given to a child, who is in a need to protect his or her feet but can’t afford to buy on his/her own. This simple looking shoelessness problem is the reason behind Anemia, Podoconiosis, Jiggers, Tetanus, and other soil-transmitted diseases, injuries, and infections in many developing countries such as Argentina. Shoes are a compulsory part of school uniform. When children don’t have shoes, they are not part of the education. In 2006, Blake Mycoskie saw the children growing up barefoot in Argentina. He saw the need. As of 2010, TOMS has shoes production units in 3 countries and needy children from 23 countries have benefitted from One for One. While Giving, TOMS take care of two factors while Giving: first - no child labor exists during making and distributing the shoes, and secondly - local and small shoes manufactures do not suffer economically. TOMS enters into partnerships all over the world, with the organizations working with a humanity approach.

As of September 2010, TOMS has helped with more than 1 million pairs of new shoes to the needy children all over the world. TOMS has received prestigious People’s Design Award from Smithsonian Institution’s the Cooper-Hewitt National Design Museum, and the Secretary of State’s 2009 Award for Corporate Excellence. Blake Mycoskie inspires to make Giving a part of everything we do and to make a better tomorrow. On TOMS appeals, all over the world, more than 250,000 people went without shoes in April 2010 to create awareness those millions of children who are growing barefoot in the world today and how people can change life of these children tomorrow by giving something today.

By Chaitanya Vyas

Faculty EDI

Strategic Thinking for Entrepreneurs

German philosopher Friedrich Wilhelm Nietzsche wrote, ‘He who has a why to live for can bear with almost any how.’ I would add ‘what’ in addition to why to live or what should be done apart from why it should be done; the ‘how’ part can be discovered surely. The question is about the direction; the question is all about what to do and what not to do; the question is about the strategic thinking in decision making. Entrepreneurs are portrayed as passionate people who relentlessly pursue their dream or whatever they believe in. Some literature also talks about the speed of doing things and making things happen. However, an entrepreneur will have to decide about the speed as well as direction. Higher speed in the wrong direction could be fatal for the new enterprise. Strategic thinking in terms of direction and what to do and what not to do takes the front seat over the speed. This is the point where the doing and being part of entrepreneurship should be combined with the thinking part of business.

The question is how do entrepreneurs develop the strategic thinking and work in the right direction. How entrepreneurs think about the platforms and not just the products? How entrepreneurs develop the sense of urgency or speed coupled with the sense of direction? Especially, during the start up phase of any enterprise it is often said, that entrepreneurs should not think about the strategic part of the business; whereas, in reality it is completely different. Limited resources make it imperative to make the most of whatever the entrepreneurs have. In such situation what matters is the direction- the strategic thinking.

Taking the base from Harvard Management Update ‘Corporate Strategy: A Manager’s Guide’, three questions for a strategist are: Where should we put our efforts (and why)? What do we bring to the table? And the third question, do our capabilities suit our position? These same three questions even entrepreneurs also need to ask themselves. Strategic thinking is not about the complexity. It is all about the clarity in thinking about what an entrepreneur is proposing to do and what he would abstain from doing. And if think about very basic but important matter like value creation process, the underlying strategic thinking needed is; who am I? (What is my value proposition?), for whom am I? (The segment or the beneficiaries) and why am I and not others? (Competition and differentiation). Even this basic strategic thinking also has potential to shape the other strategic part in the business.

Dr. Rajiv Joshi

Associate Sr. Faculty, EDI

Entrepreneurs as Salespeople

Entrepreneurs have long been seen as innovators, inventors, those who add value and to a great extent those who orchestrate the factors of production. Well, the value creation part in the process of surely important but what is needed is to market and sell this value proposition in the market to the prospective buyers. It is highly recommended that entrepreneurs should accept the fact in early stages of the entrepreneurship process that they are primarily salespersons. Sooner they accept this fact, better it is for them to succeed in their ventures. The fact is very simple, if someone is in business, he/she is in sales. Unquestionably, there are many secrets of succeeding in small business in the initial phase of the start up, but the selling knowledge and selling skills is at the top of this list of secrets.

Some of the selling skills required are: sales presentations, selling skills, objection handling and negotiation. One can not forget importance of timely follow-ups and courtesy calls which are essential part of relationship building in sales and business. It is worth time spending on this activity, especially if the entrepreneur is in the B2B business. Ability to generate references also helps entrepreneurs to generate more business. Referral business does not incur more of sales and marketing expenses and surely references changes the way customer profitability looks. This skill becomes utmost important during the downturns and recessionary situations, since the buyers want to be sure of what they are buying and also confident about from whom they are buying. There are many ways to succeed and sell more in small business. Some of them are pretty simple to do and practice on daily basis. These tactics not only improve the visibility of the small business but also increase the opportunities for new business.

One of the easiest and cost effective ways is to hand over at least three to five business cards to the potential customers or may be to those who can give the references in future. Business cards look better in the card folder of customers and not in an entrepreneur’s card holder. Second way to market the business is to call at least five individuals every day; this people could be the existing customers, friends, potential references or the prospects. The friendly talk leads to some of the sales leads and finally new opportunities are discovered in this way. For those who can not reach the existing customers or prospective customers, e-mails work well; provided there is something to share with them which is of use and interest to them, may be new product launch, may be new schemes, or simply the awards and accolades received in the past. Writing a personal note with some thoughtful gift as a token of appreciation and a thank you to an existing customer also has great impact. Finally, meeting one person per day and discussing with him about what business you are in and what you do, how you do and how your customers appreciate your efforts creates a group of advocates and canvassers for your small business with a better credibility. Ultimately, relationship is what matters in the business, marketing and sales.

Dr. Rajiv Joshi

Associate Sr. Faculty, EDI

Communication Skills for Entrepreneurs

It is said that you are what you communicate and how you communicate. The way an individual communicates reveals a lot about his/her personality. Though, it looks like a cliché that a good communication matters because it is the ability to communicate the idea that decides whether the idea is good or bad, it needs to be reemphasized. Especially, for start ups and entrepreneurs communication matters a lot, since in the initial years of the start up, it is the communication of an individual which becomes decisive in many aspects of entrepreneurial process, be it souring finance, getting new customers for business, convincing the bankers or venture capitalists or roping in talent to manage the business.

Well, what is needed in terms of learning about business communication for entrepreneurs is beyond writing reports, memos or the summaries. What is truly needed for the entrepreneurs in communication is how to make an effective argument in the business setting? How to identify key points for effective communication? And very important how to create and deliver engaging presentations that create impact? There is a need to develop communication skills to engage an audience that could be distracted, busy or may not pay attention to what the person wants to say. Without these skills, it becomes very difficult to sell the initial ideas or project to an entrepreneur.

The skill needed is the ability to communicate and present a complex argument or proposition in a concise and succinct manner. The ability to manage both planned and unplanned presentation and discussions comes very handy to the entrepreneurs in different situations, especially in the initial days of start up phase. Ability to communicate with people at all levels and also the flair to adjust the communication style to suit the situation is one of the most important skills for entrepreneurs. However, it is very important to structure and compose ideas before they are presented. KISS principle – keep it short and simple surely helps, but one can also look at other basic principles like; be brief and to the point, prioritize the points, use persuasive and convincing language and finally ensure that the communication has enough flexibility to absorb any kind of change needed in the delivery. However, in a business setting, the most important principle for effective communication is the sequencing of the thought process or the arrangement of ideas; be it a power point presentation, a covering letter, an introductory letter or a proposal.

The sequencing of the ideas and creating the arguments to support the principal idea is what separates an effective communication from the ineffective and so the effective entrepreneurs from the ineffective entrepreneurs. Some people have found Minto Pyramid principle developed by Barabara Minto very useful for effective communication. The Minto Pyramid model of the communication is based on the foundation that there should be a main theme in any communication at the top, that can be supported by the group of ideas and finally it should be reinforced by the facts, data and other logical arguments and thus any communication would have three tier approach and making it like a pyramid. Using this simple yet very effective way, entrepreneurs can surely develop any communication a project proposal or a power point presentation, both written as well as verbal for enhancing their effectiveness.

Leading entrepreneurship education, research and training institutes like Entrepreneurship Development Institute, India have always understood the importance of developing such skills and it has been included in the mainstream curriculum for long duration programs. Besides communication skills, other important business skills like negotiation skills are considered as key business skill at Entrepreneurship Development Institute, India.

Dr. Rajiv Joshi

Associate Sr. Faculty, EDI