Posted on 31-08-2014
Filed Under (POLITICS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Real examples on design perversity form the basis of my learning in the five countries I wrote about last week. Let me start with the ingenious design principles I’ve lived with in France. From these I’ve learnt that every selling proposition has to be aspirational and disruptive.

Nearly every day, coming from Left Bank to Right Bank in Paris, I had to cross the world-famous Louvre Museum. You can’t imagine the controversy at the time of the commissioning of Pyramide du Louvre by President François Mitterrand in 1984. This huge 71-feet high pyramid structure, and its square base with 115-ft sides, was objected to as ancient Egypt’s Pharaoh culture entering the heart of the liberalised Catholic French society.

Not only that, detractors said its architect being Chinese American IM Pei, he perversely stuck plastic American ways in front of a European Palace. Counter-arguments came when the pyramid was first reported to have 666 glass panes, the number of the Beast in the Bible’s New Testament. Actually it was 689 glass segments, but even Dan Brown’s best seller Da Vinci Code referred to this Satanic number later. In reality there is extensive learning here. The expanded museum entrance now effectively guides people to numerous destinations within its large subterranean network. Juxtaposing the Louvre’s medieval classicism with an ultra-modern structure actually established a traditional-contemporary blend that’s both disruptive and aspirational. This stark harmony pulls in 10 million annual visitors and considerably higher revenues for the renovated Louvre.

Japanese businessmen have long been enamoured of French luxury design. They order a special travel bag from Hermes that takes six months to make and costs 30,000 Euros. This stand-up bag opens on the side to accommodate two wine bottles and two wine glasses. There is sophisticated artistry in every square centimetre of the bag. It’s incredible how the Japanese appreciate this authentic, original product from Hermes, saying they come to France especially to buy it. Hermes is undoubtedly a very big French luxury product brand. Wouldn’t you say their paying attention to a niche market of aspirational travel bags for rich Japanese business people is a disruptive way of creating product design?

Artistic living style is not only for rich people. Many French stores sell only disruptive and aspirational objects of art, from low to high price. You can’t ever experience such an unstructured entertaining paradise with preconceived ideas of what to buy or why you are entering. Just watching the unique stationery, home decorations, miscellaneous functional items gives you myriad ideas. One store I visited was selling wooden hand mannequins where all the finger joints can move. These are generally required for learning anatomy drawing or measuring man-machine ergonomics. A shelf here had hundreds of hands. Funnily enough all of them had four fingers pushed down, one pointing upwards. I laughed, making the sales girls immediately get busy putting the other fingers up or down. “We have to rearrange these fingers all day,” they laughed, “because when no one is looking, shoppers get tempted to be naughty to put the middle finger up!” I was lured to buy this beautifully designed mannequin. As an object of art on my table, I can see how every guest is attracted to play with different gestures of the fingers.

In Place de la Madelaine near Place de la Concorde, where Queen Marie Antoinette was guillotined, there’s a crystal objects-of-art store called Baccarat. One day, as I was explaining to my wife how Indian Maharajas were among the biggest Baccarat customers, the salesman heard me. I too could surprise my wife by carrying Baccarat every day, he suggested. I dismissed him, saying its glass breaks. Undeterred, he displayed a range of exquisite glass rings in different colours, saying they were marvellously crafted to match beautiful Indian saris draped by beautiful Indian women. I was left with no choice. Baccarat rings burn your pocket less than diamonds do, but I can tell you their elegant, disruptive looks will turn more heads than diamonds ever could.

To establish their supremacy, French kings wanted control over nature too. Their palace gardens were designed with total disruption. Outstanding human handicraft was used to maintain hedges in incredible geometrical shapes that have rounded architecture, unlike skyscraper buildings with sharp edges. When you walk down half a kilometre with French gardens on either side to enter a French castle often surrounded by a majestic water reflection, you feel you are in another world. Visiting 16th-century Château de Chenonceau with my author friend Abhijit Bhaduri, I indicated to him the embellishment factor in French culture. The stained-glass design on the window has exactly the design of the wooden floor, so you can see just one contiguous idea being driven from floor to window. The French frequently use a driving force called “fil conducteur” for big ideation. This is a sensitive nerve that harmoniously creates coherence among different subjects. In 2003 I had written a white paper on how business needs a fil conducteur to grow with coherence.

Here’s my analogous learning. A company’s strategic team has to be like an English garden where plants of different shapes and sizes thrive independently to bring different ideas on the table. When strategy comes to operations for implementation, the French garden’s stringent, uniform design can be compared to a company’s operational processes and its workforce. If operations are driven like a French garden with no choice to deviate from the structured pattern it is set in, business result will be achieved with coherence and consistency.
Aspiration and disruption factors are so profound in France that with the passion to embed them, you bathe in them. I’ll continue next week on how I’ve imbibed knowledge of design from the four other countries — Germany, USA, Japan and Italy.

To download above article in PDF Bathing in disruptive aspiration

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Posted on 24-08-2014
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Being customer friendly is what Leonardo da Vinci taught marketers through all his engineering designs. His Mona Lisa, the painting he did in the 16th century has been so enigmatic that almost 10 million people from across the globe still visit Louvre Museum in Paris every year to see it. No other work to date has achieved this kind of success. This can be considered as art marketing the Louvre.

Mona Lisa, La Joconde in French, is the world’s best known, most visited, written and sung about, and most parodied work of art. It was a hugely controversial painting because it was perverse and ahead of its time. Paintings done then were large depictions of social and religious scenes in public buildings like churches or in palaces. But Leonardo’s painting had a central figure portrait with aerial perspective, and that too of an unknown woman, not royalty.

A painting or a sculpture that’s hung or erected in a museum is inspirational. But design that is applied through functional improvement for bettering the human quality of life represents an artist’s strong discipline. Leonardo is reputed to be the most diversely talented genius ever to have lived. His micro detailed designs went beyond his sensorial painting canvas to upgrade human life. He conceptualized flying machines, armoured vehicles, concentrated solar power, and made important discoveries in anatomy, civil engineering, optics, and hydrodynamics. His designs were 600 years ahead of his time. By providing people the benefit of science in everyday life, he became the future builder of the world.

With Leonardo as the reference, I find that European design, which has the order of discipline, creativity and process, is the authentic source of the world’s best knowledge and knowhow of product design as we practice it nowadays. Last week I wrote about how German machinery is best but irrelevant to a section of the Indian market; Indian machines are compromised due to being in the demand led market where quality is not addressed. So in diametrically different angles, both fail to deliver customer benefit. The Germans need to have the willingness to change to become relevant to heterogeneous India, while Indian companies have to improve in capability to deliver excellence in products.

Let me today address my fellow industrial product designers in India. I can only tell you that if you have the good fortune of learning design principles from the work of designers or design schools in the five countries that I got exposed to, just grab that opportunity without asking any question. Let me describe my learning experience.

France taught me how to make any selling proposition very aspirational and very disruptive. The Germans hammered home the point to me about high precision, never deviate from the process. Americans see everything big, from them I learnt about how important it is to design industrial products for mass scale manufacture. The Japanese exposed me to how miniature designing is done. It’s not just flat reduction, aesthetics and neatness have to be perfect, while functionality can never be compromised; in fact it’s heightened. The Italians taught me elegance and artistic sense at every stage and in the finished product.

Nowadays experiencing product design from all these countries is not so difficult in India as products from these five cultures are all here. So if you have the patience and passion for reverse engineering, that is reproducing another manufacturer’s product just by following detailed examination of its construction or composition, you can easily learn. You will discover how these five countries approach industrial product design, and certainly improve your capability to become globally competitive. In today’s context, don’t forget to learn from the Koreans too.

A designer’s heady combination of scientific and sensorial substance in product design is what will surprise the customer. It is the customer’s first approach towards a product that should cue its usage excellence and feeling. That determines its success, not its engineering inventiveness alone.

Approach: Without any assistance, the customer should get magnetized towards easily approaching the product, especially a new product she is unfamiliar with. If she needs an elaborate user manual to make the product work, you’ve lost half her interest. The product’s immediate appearance must be easy, inviting, glamorous, and psychologically in sync with the customer’s requirement purpose. She should experience these four parameters after buying the product. She will then start talking about the brand to influence others to buy it.

Usage: The initial involvement of product usage functionality should be magnetic, provide independence, be devoid of intimidation and easy to use. It should be ergonomically in sync with the customer’s usage habit. This is valid for after purchase too.

Feeling: The customer’s feeling is hidden and intangible but that’s what impacts her acceptance of the product. As a designer, if you can gauge her feeling after she has approached and used the product, you can mastermind a strong concept for the design. If the customer’s feeling is not distinctive, you can be sure there would be no word-of-mouth or excessive commercial success. You can assess this at the time of designing the product only when you can make her articulate her unstated feelings and carefully watch her eye expression, facial expression and body language while she is doing so. Not knowing the customer’s feeling will make your product merely the material you’ve used.

“Pop art is for everyone,” declared American painter Andy Warhol. He also said that when he makes any mistake in his paintings, people like it even more. In general, society always questions design that has some difference. That difference is being creative ahead of time. Most of the world’s celebrated art and design have always been prematurely ahead so people have found perversion in them. At every design point, beginning from ideation, concept, design, prototype, tooling and the final product, the customer’s ergonomic behavior is the central theme. You can only enrobe it in the design. You then have a design that has appeal and sells.

To download above article in PDF Perversity sells design

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Posted on 17-08-2014
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

I’m making a provocative comparison between Indian and German engineering, how they are diametrically different, yet how both fail to deliver consumer benefit in diametrically different angles.

Germany, the World War II culprits, was thoroughly bombed by Allied forces. Yet the devastated nation regained its high quality engineering excellence to be recognized as the world’s best. Take a look at any German car. Behind the infotainment screen is extremely sophisticated technology. Auto air conditioning incredibly retains the set temperature in sunlight and in shade. Consumer demand in developed countries is so high on quality that engineered products become extremely innovative and complex in that highly competitive market. This invariably increases cost, but people living in the Euro money platform can afford expensive products.

In developing countries, German engineering is facing enormous problems. They fail to adjust German engineering excellence to be relevant to developing countries that require mass category and not premium or luxury products. An Indian customer of a German washing machine said it took two months for a technician to come for service after sales. The German company was not neglecting the customer, but in over-confidence believed their perfect machine cannot have a problem. The customer was suspected of not knowing how to use the machine. Nor could the German company anticipate voltage fluctuation that paralyzed the machine, so claimed responsibility is not theirs. It can be argued that if you are doing business in India, the first relevant factor to know is power not being of homogenous standard. So shouldn’t ingenious German technology be used to resolve the issue so the machine automatically adjusts to irregular power supply?

At the mass level, India requires auto vehicles to be high in quality, low in servicing need. Germans have an edge in manufacturing automobile parts and features, but I’m not sure how much attention they pay to support such requirements by reducing overdesign to fit Indian market conditions. Eg. A famous mass German car in India has 33 chips. Imagine the plight of the service garage! By trimming overdesign yet retaining German value, their cost can become relevant to developing countries.

German machinery for manufacturing different consumer products needs very high standard, homogeneous raw materials. It has happened that many Indian manufacturers who bought German machines as they’re the world’s best, have faced the dilemma of not being able to commission the machinery because the raw materials were not upto the machine’s required standard. So they ended up tinkering with the sophisticated machinery to accept the raw ingredients available here. Engineers in India have not only adjusted the original German equipment, they become adept at redesigning them to make duplicate machinery for additional production. So instead of buying another high cost German machine, they end up installing 3 to 4 redesigned Indian machines at the same cost.

Actually, it’s quite normal that stringent industrial design discipline makes German machines so precise that the machine does not accept raw material of unequal quality. This ensures consumers get extra benefit. Raw material is unequal even in the West. Eg. wheat flour will be different when it’s fresh off the field, when in storage for a year, or procured from different countries. As the manufacturing sector is highly sophisticated there, intermediaries like super agents blend the unequal raw material to bring it to a high class blend to align to the machine’s acceptance level. This kind of segregation is not done in most developing countries, so the machines instead get adjusted according to the unevenness of the raw material.

Finally who is the loser? Quality understanding of developed country consumers has been finely honed from competitive market offerings so they do not accept anything inferior. In demand led markets like India where delivering the product is more important than to meet global standard quality, manufacturers compromise, and consumers have little choice. Indian consumers are losing by not getting best global standard products.

The German machinery company is the loser too. Not only does it not sell more machines, its engineering is being copied. Germans are obviously suffering from blinkered overdesign, are not in tune with their customers’ market situations. Don’t they need to tailormake to fit Indian needs without deviating from their high engineering precision grid where cost and feasibility will have relevance?

Indian companies may temporarily be the winners, but for how long? With proliferation of foreign goods here, consumers are tasting quality products and switching to them. Indian brands will not become global by supplying mediocre products on demand without raising the quality bar. Indian companies adapting German machinery to make low quality design machines will obviously get huge cost advantage but taking shortcuts with hit-and-miss engineering is very mediocre and not constructive. Indian engineers are not learning best practices; they cannot become global. After the War, Japan and Korea also had low engineering quality; they too copied German engineering but they made better adaptation for mass scale delivery.

Cost matters for mass consuming products in every country. Raising a brand’s quality standard, whether in food, personal care, automobile, consumer electronics or mobile phone and charging accordingly is in the manufacturer’s hand. How long can Indian manufacturers compromise on quality to drive the demand led market and bring cost down? The foreign brand will always have an edge unless of course it cheats in India. Indian consumers are not blind. I’ve often heard them say the same brand they buy in India has superior quality in developed countries.

German machinery is the best but irrelevant to a section of the market. Indian machines are compromised due to being in the demand led market where quality is not addressed. Both have concerns. The advantage the best has, like German machinery, is to become relevant, that’s easy and just a matter of their willingness. The disadvantage the compromised Indian company has is the challenge of total behavior change to provide customer benefit by increasing employee capability. So what’s diametrically different is willingness vs. capability.

To download above article in PDF Diametrically different

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Posted on 10-08-2014
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

“Your article last week on Customer Value touched the core of my heart as I am constantly fighting for this cause,” wrote my valued reader Commodore G S Kanwal, retired from the Indian Navy, “but we are more or less in a Catch 22 situation.”

Small businesses, like the 44-bedded hotel service that Commodore Kanwal runs and is fighting various social and career factors to retain trained staff in, are the real backbone of our country. I’ve promoted the cause of MSMEs (micro, small and medium enterprises) in this column as well as detailed how to encourage their activities in my books “Jalebi Management” and its sequel “Strategic Pokes.” We should always remember that all big companies began as MSMEs. Courier service UPS with over $55 billion revenue started with just 4 bicycles in 1907 to be among the world’s best companies. Another MSME blooming example is the $473 billion Walmart retail company that started as Walton’s 5&10 in 1950, a dime store in a small US town called Bentonville in Arkansas.

Among developed countries, the outstanding performance and internationalization of Germany’s MSME sector is worth emulating. According to Sequa gGmbH, a development organization where Germany’s top four business membership organizations DIHK, ZDH, BDI and BDA are shareholders, Germany’s economic structure is determined by MSMEs that account for almost 99% of all businesses, and employ about 80% of regular workers. The government has several support programs and measures to promote MSMEs. Contributing significantly to GDP, they’ve made the German economy the strongest in Europe today.

Unlike in Germany, about three-fourths of India’s MSMEs cannot access banks or institutional financing as per a study by industry body Assocham and finance advisory Resurgent India. Without adequate credit, most MSMEs actually borrow from their family and friends, which naturally impacts their business planning in terms of time and ability to raise the required amount. A new kind of short-span, flirting with money entity has mushroomed in our modern reformed economy, the start-ups funded by angel investors. Start-ups remind me of the attitude some bachelors have on how to handle their girlfriends. By hook or crook these start-ups have to prove their model is working. They try to hike valuation to sell out and encash big money within a short span of time. In relationship analogy, it’s like working hard and making a name to grab the plum dowry that’s waiting when he opts for an arranged marriage ditching his girlfriend. Most angel investors look for short term investment and quick earnings. This influence of working to finally sell out is not setting a good example to the new generation. To become a solid entrepreneur, you have to drive your business, single-focused, for the long term.

Let me note some hard truths that MSMEs face in India’s modern economy:

1. MSMEs often run like a family business where there’s no question of hiring hardcore professionals.

2. The younger generation does not want to carry forward the business the father set up. Having witnessed the fair amount of struggle required to run the show, these youngsters prefer to become an employee with less responsibility and the assured monthly pay slip.

3. Entrepreneur fathers consider only their generation can do business. Having sent their children to the kind of schools they themselves have not gone to, the children develop an outlook that’s rather dissimilar from their parents. Thereafter the father develops low confidence in his child’s capability; and neither does the son want his father as his boss at work. Subsequently there is no continuity.

4. For arranged marriages and social recognition, the value of young people working in big corporate houses and being the manager of a large number of people is higher than if they were working in their father’s business.

5. To be an entrepreneur, you need to have 3 skillsets (a) Knowing your product in depth so you know its selling point. (b) People management skill to keep employees motivated and reduce attrition. (c) Be an outstanding salesperson to play in a competitive marketplace. It’s not always the case that one person will have all 3 competencies. As an entrepreneur you may have one or two of these skillsets, so it’s extremely important that you find an appropriate partner to compensate the other skills.

6. An entrepreneur who does not have the right capability for the segment of business being pursued tends to spread out into diverse business areas. But without single focus, long term steady business can never be built up.

7. Such diversification leads to most funding institutes not trusting the competency, sustaining strategy and capacity of MSMEs. To safeguard their loans, banks ask for detailed documentation and securities which leave MSMEs flummoxed. Even short term working capital on credit is not easy for them to get. Actually banks have evidence too of suffering non-performing assets on having loaned to small businesses. So for MSMEs, cash flow is a constant problem to run day-to-day operations and fuel their future growth.

In these 7 points I’ve listed, there is a big role the Government can play. Several industry and Government bodies already exist to facilitate MSMEs, but how concretely is help provided? It’s essential to create “World class MSME India" as a driving force where the two basic requirements for MSME business growth would be customer centricity and retaining a defined global quality standard in MSME offerings.

My earnest request to our new Government is to take non-bureaucratic action in this area. Among such action could be the professional handling of MSMEs to represent their interests in capability building and getting loans, having our embassies overseas promote business with MSMEs, encouraging them through consultancy to develop their innovative power, and having a very dynamic TV channel by Doordarshan exclusively dedicated to MSMEs with inspiring stories, winning examples and professional help and advice to get ahead. When MSMEs flourish, employees will not leave their jobs so easily, and the country’s GDP can experience galloping growth.

To download above article in PDF World class MSME India

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Posted on 03-08-2014
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

In the 30 years I’ve been an entrepreneur consultant I’ve had the opportunity of sitting with senior management teams from enterprises in diverse industries to infuse customer centricity into their products and services. This has been both a pleasurable experience and the toughest job in my business life.

I’ve always faced two types of clients; those interested in achieving customer centricity, and the large section that’s quite indifferent. The interested ones put tremendous effort to understand how core the customer is. They drive hard to inject this core inside their organization, facing the difficult job of changing employee behaviour. The second type of clients enters the comfort zone of ad hoc adaptability. They deliver what’s feasible as per their backend capability and act as though customers will accept it. This is the trouble-free route of changing the bottle, not the wine; and hoping against hoping that customers will not notice.

Without end-customers, where is business? Enterprises agree to this, but miss out on driving it seriously as business truth. It makes me very uncomfortable when management level people barely put in effort to understand the end-customer’s subconscious mind where buying motivation resides. I cannot fathom why trying to own the end-customer’s mindshare is not the first priority of every enterprise. After all if an enterprise can find out what to do to change the end-customer’s behaviour towards favouring its product or service, that enterprise can smile all the way to the bank.

I believe in nonstop enterprise learning using customers as teachers and insight dispensers for business improvement. The ability to absorb human culture and behavior, anticipate economic and political phenomena in advance, co-opt technology advancement and dig deep into the social and psychological aspects are all necessary at this level to know how to respond to the market. However, industrial heaviness sometimes becomes so overpowering that managers get waylaid from the track of discovering and satisfying end-customer need or desire. In India in particular, it’s a huge dilemma.

Because managers do not always live in the end-customer’s domain, it becomes difficult to make them understand micro layers of end-customer centricity. I very often become stubborn in defending the value that end-customers should legitimately be receiving. It’s become my passion and obsession to add end-customer benefit in any enterprise I work for. To tell you the truth, I’m addicted to observing human behavior. Wherever I am, with the family, in the sports ground, entertainment or working environment, seminars, condolence visits, while travelling, watching television, Internet surfing, visiting painting museums, or receiving response from my readers, my eye turns to watch behavioural traits and reactions. The rapport between people of any age and economic stratum, their relationship with some product or service, are indeed very telling.

No matter where and in which country I am, I don’t hesitate to ask if something raises my curiosity.  ‘Why’ something I never ask as the person gets intimidated; it’s the ‘how’ I enquire about, and learn about the purpose. Learning can never be achieved when you are in the challenger mode. Rather I try to make learning conducive for both of us, me the learner and the end-customer as teacher. These ingredients have helped me understand end-customers in every industry wherever I have entered because no industry can run without an end-customer. Challenging a learning seed is totally destructive; as is the preconceived notion, which intellectuals and professionals are said to be guilty of. Preconception actually kills unearthing the new.

Corporate transformation is mere jargon: It’s true that behavioural change cannot be an easy job in a company aligned to market dynamics. You can transform a material in a machine to make products; iron ore can become steel. But human beings cannot be transformed like that. Actually changing employee behavior can be a nightmare in our country’s multi-behavioural heterogeneity, because people work and interpret the same subject very differently inside an enterprise. When they go into social and family life, it’s diametrically different. That’s why a huge drive from management is required to thoroughly educate employees on the purpose and objective of internal behavioural change according to changing end-customer trends. The company has to patiently work to make employees understand the benefits of end-customer centricity. Not only will the enterprise get better returns, but employee skills will improve, careers will get furthered, which in turn will impact the enterprise. It’s a very painstaking task. Unfortunately, most enterprises would rather spend money buying hallucinating capital assets than training human capital.

Indian enterprises are largely growing in a demand-led market. Just to illustrate, look at the contract. Organized retails in Western countries have captured more than 50% market share in every FMCG category. They sell high quality private label products at 30% lower price than national brands. So most manufacturing company brands are in a tight situation. Indian manufacturers are likely to face this condition too when this market matures. But managers today mistakenly believe that once they’ve performed in their key result areas, they’ve achieved the business strategically. In reality they have merely supplied to existing demand. They have not worked to sustain their business, make it long-term sticky nor worked to deliver differently to get end-customer mindshare for repeat purchase consistently today and tomorrow.

Need to deal with new market realities: Having brought end-customer centricity into several Indian enterpises in 15 years, I’ve seen growth happen when end-customer centricity is tightened, and slacken when corporates get diverted to make easy money trading in diverse categories. When they lose sharp competency focus and capability, they become like conglomerates selling products in different categories wherever there is demand. With complacency and routine comfort, they bring products from China or cut price to make volume. They’ve still not taken seriously the global predator-competitors ready to kill to grab market opportunity.

To capture local and global markets with sustainability, enterprises need to cultivate the passion for end-customer centric drive and change employee behaviour to align with that. The best way to do so is to grab the changing behavior of end-customers.

To download above article in PDF Defending end-customer value

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