Raj Shankar's Blog, page 29

Vedantic Wednesday: Ferociously defend Integrity

Many times we come across situations where we are puzzled over what is right and what is wrong? We tend to ask others what they think about this and attempt to seek consensus over the choice. In the process very often we become anxious and stressed. Asking others for what you should believe in, is fundamentally where we all lose perspective in life! Why do we keep changing our stance on what is integrity? Why is it that as a society we are trying to find what should be a common integrity standard for everyone? Why not create a larger framework which will enable individuals to figure it out for themselves? Discovering them is the correct way because deep down within every one of us is a voice that seeks to be listened to – it has the answers to this question.

In a recent roundtable that I had the pleasure of attending, I heard a senior Tata executive share his advice for emerging enterprises and the entrepreneurs who are building them – ‘ferociously defend integrity’. It seems to have come from his superiors, the leaders, the founders and his long association of having lived them. He kept sharing examples of how the Tata Empire has been built solely on trust. He also shared many examples of enterprises that had grown along with the Tata companies. They had done so simply because they aligned themselves with the overall value system. While many dropped along the way, the few who remained as vendors have built strong enterprises themselves. All this has become possible according to him because of a single factor – trust! But how does one build trust? It is by being true to one’s words. By keeping promises one makes! By walking the words that one speaks! By living the life that one proposes! This builds integrity. But this leads us to own up the responsibility of finding what our value system is and developing the conviction to live by them. This makes us live a life of integrity and trust gets built over time.

There will be some who may not think that your values make sense to them. You may have to lose some opportunities along the way. But sticking to one’s values and maintaining integrity keeps one peaceful, happy and also at one’s best at work. This will build trust. If we at any point in time bend to fit ourselves to others value systems for the sake of opportunity – that will be the end of living fully and trust is the first thing that leaves the picture.

Think deeply on this! It has some important lessons, not just for us individually, but for our entrepreneurial ventures as well.

Compliance & Talent – where is the real problem?

The word “compliance” elicits a little bit of a scare and this has been used widely to implement anything that is warranted. Using compliance as a tool to implement important things has become a norm, especially in cultures where following processes is not natural. While the quantity of non compliance usually garners attention, in recent times the quality of non compliance seems to get discussed. The main challenge around qualitative aspects of non compliance is the behavioral aspect of people. When one looks deeply at this problem, one always gets stuck with the thought, “Is lack of compliance a behavioral issue at the implementation level or a communication issue at the leadership level?”

In today’s world, where leaders lead organizations or project managers lead teams, every aspect of work is achieved based on what is being instructed and how something is being instructed by the CEO or the manager. When being instructed, the listener’s attention tunes itself to watch every verbal and the non-verbal element of the communication of the instructor (normally the leader/manager) in the organization.

In a large organization, we will have people giving instructions at multiple levels. There will be a department head, VP etc, who will be communicating to the team at various levels on implementation of a particular task. If there is a conflict in the verbal and non-verbal communication made by the people at responsible positions, the employees or the team as a whole get very confused about what is to be followed and what should not be!. This can trigger non-compliance. Many times people are a little hesitant to comply with something being told or newly introduced. This is because they are not clear on the instructions they are receiving. They may see clear conflict between the verbal and non-verbal cues, as well as amongst the various leadership team members.

This applies equally well to small organizations too. May be only the magnitude varies! Sometimes the entrepreneur’s constantly changing stance on issues could also send confusing signals. So maybe a correction in our communication system is the real solution to the problem. A communication method that is coherent, consistent and crisp can shape a community better in a world where processes and systems are progressively gaining more importance. Can we actually start working on the communication aspects rather than sidelining it just as a behavioral aspect of individuals who need to follow the instructions?

Many times entrepreneurs complain that people don’t seem to follow set instructions, don’t seem to understand the entrepreneurial intent well or don’t have enough ownership quotient! This constant complaint and strong ad hoc reviews have resulted in the loss of quality talent amongst start-ups. Communication is an important aspect in leadership especially when it comes to entrepreneurs. They need to give clear, consistent and simple directions to their teams. This will result in greater effectiveness within the team and also in greater resonance of team effort.

Think about it!

Entrepreneur, Do you remember why you started?

Starting a business, getting into a family business, taking on a risky experiment at your organization or even setting up a social venture is a highly personal choice.  This personal choice arises due to a strong feeling in the mind of the entrepreneur (entrepreneurial mind) towards a cause. This cause may be anything from becoming an expert, building an empire or solving a social problem. While the idea in the mind would have come out of external influence, the need to get out and do something is internal. Apart from all other characteristics that describe an entrepreneurial mind, this internal drive or calling remains the most defining and important one.  But it is also this important need of the entrepreneur that gets least importance or priority post starting.

From the moment one has made the choice to start a venture he or she cannot deny that they have made a conscious decision to become part of the economic and social environment.  There is no doubt that once you get involved with the business ecosystem, the focus is strongly on growth. This automatically brings to the forefront issues such as branding, institution building, financing, team formation, compliance, reporting and results amongst others. Amidst these pressures unless conscious efforts are taken, the inner calling of the entrepreneur first gets subdued and then eventually sidelined.

Even in classes that I teach on strategy and entrepreneurship, questions around vision formulation and translation, alignment between individual aspiration and strategies are of the least interest. Participants, entrepreneurs and students alike get carried away with the more tangible concepts and tools, such as opportunity evaluation, raising money, managing working capital, scaling etc. Even though all of these are very important, it is critical that on a routine basis the entrepreneur takes a little time off to see if what he or she is doing today is still aligned to why he or she started out. Failure to do this will eventually raise some fundamental questions in the entrepreneurial mind and create conflict and disconnect, despite visible business success.  This is a dilemma that many entrepreneurs go through probably at more than one stage of the evolution of their enterprise: the dilemma of balancing business success with the founding aspirations.

Even if there has been a conscious change in the model, plan or nature of business it still has to ensure that the essential reason for starting has been addressed. While this may seem as a self serving exercise by many, who consider entrepreneurship as something that is being done for others (almost like charity), it is very important to acknowledge and accept the individual human need  for satisfaction and happiness.

Agreed that it is demanding on the entrepreneur to do a variety of tasks to grow his / her enterprise, there still has to be that one part in the portfolio that satisfies the inner passion or need. After all isn’t that the reason why this all started?

Don’t forget why you started and keep servicing it, else it will keep you dissatisfied even with success all over you!

Interesting Links This Week: 05-January-2014

Chris Hardwick is a man who probably is seen on TV more than anybody else hosting shows! Where does he find the time to do so much? How does he maintain his output without tiring out? In this interview he shares time management tips and they aren’t really the traditional self help type. This is what makes them interesting. As an entrepreneur one should see if they can pick on any of these of use them as triggers to find their own! Read more here – Link: http://www.fastcocreate.com/3020985/master-class/7-time-management-tricks-from-chris-hardwick-man-of-1000-tv-shows

 

Social Entrepreneurship is a relatively new phenomenon. The material available around it is also limited. Hence we find social entrepreneurs always borrowing material from business entrepreneurship literature and attempting to adapt it to their needs. This leaves a lot of responsibility on the practitioner to implement, which is both difficult and not really their domain of work. This book seems to attempt filling that need. Read more here – Link: http://wdp.wharton.upenn.edu/books/social-entrepreneurs-playbook/

 

Is 3D printing the next hype or is it here to stay? Will 3D Printing technology make all the Chinese factories redundant? Will it really change the way manufacturing is done today? If reading this excites you go ahead and read the entire article. Here is an interesting excerpt: “Therefore, to predict the cost curve of a new technology, we need to consider both the rate of volume growth and the rate of cost decline, also known as the slope of the experience curve. The question becomes this: Will 3D printing behave like a microchip or a gas oven?” Read more here – Link: http://www.strategy-business.com/article/00219?pg=all

Books and Me: Bird by Bird

Book Title: Bird by Bird – Some instructions on writing and life

Author: Anne Lamott

As one who is keen on keeping my writing spirits high, I love to read books that speak about the art and craft of writing. Though I have begun to see redundancy in the inputs provided by the self-help variety even in this segment, I still enjoy reading them. Amongst this genre I truly enjoy books that strike a chord at the philosophical level. Since most of the ‘to-do’ aspects of this genre is repetitive and becomes an excuse from actual practice, the philosophical intent needs tremendous reiteration to develop and retain the right attitude.

Anne Lamott’s beautifully titled book speaks about the only way to making big projects happen, including big writing projects. In fact it is the only way to make any project happen. How does one finish a 800 page text book project – in Anne Lamott’s language: ‘bird by bird’. This little piece of advice is all that one needs to imbibe before getting down to work. If one learns to look at all the writing tips provided in the book from this overarching idea, it seems simple. But the biggest challenges for a writer trying to put the ‘bird by bird’ philosophy to work are:

Being disciplined and committed to the art called writing
Understanding the vocation called writing in spirit

As a thinker and writer I loved the philosophical underpinnings of the author. I am sure many other readers could have found the book a little preachy and spiritual. Many readers could have been disappointed from the book as it provides very less inputs on what to do to improve the writing. There are many other books for that – but something that every artist needs to understand and internalize is that writing itself is the reward for writing. Every artist needs to internalize this subtle piece of knowledge and remain immersed in it as we produce, rather attempt to produce one more piece of creative work.

The book contains some interesting anecdotes, personal experiences of the author, number of beautiful and deeply influential quotes, and further references for reading. At some portions of my reading I found the author bordering on strong philosophical concepts. As a student of Vedanta, I found this an interesting extension of philosophy in practice. Overall I enjoyed the book and convinced myself that I must continue to write for writing’s sake. The book also has induced in me a strong thought to re-look at my priorities with respect to writing and everything else I do in life. At many points in the book one is bound to stop, put down the book and delve into contemplation. This deep reflection and thinking is essential to all creative pursuits and many times even to live life at large. The book is a strong trigger of passive passion and I am sure it will make you ponder on the innermost purpose of life. While most of the discussions in the book are from a writer’s perspective, it will not be too difficult to extend the learning to other spheres of activities as well.

Happy Reading and hopefully happy writing as well!

Finance for Entrepreneurs: What are Expenses?

Expense is what a business incurs to produce and deliver its services and thereby earn revenue. It is therefore part and parcel of every enterprise. Expenses are usually of three types:

Operating Expenses
Capital or Investment Expenses
Financial Expenses

1. Operating expenses are those that the business incurs to create and deliver the product or service. These are typically those expenses that deliver their value within a short period of time. For example: Salaries of employees is a monthly operating expense. It delivers its value namely employee effort in that very month. Other examples of operating expenses include rent of office and/or factory, utility bills (electricity, telephone, conveyance) etc.

2. Capital Expenses are those that result in the business gaining benefits over a longer period of time. For example: Purchase of expensive machinery that has a life of 10 years. Such a machine may incur a huge cost that may have to be funded through a loan if the business does not have enough internally generated funds. In any case accountants amortize the expense over the ten years to reflect the usage of the machine by the business. Other examples of capital expenses include land, machines, computers, furniture, etc. Based on the possible life of the asset, the expense is proportionally amortized. Amortization means dividing the cost of the asset across its useful life in proportion to its utilization.

3. Financial Expenses are those that the business incurs to ensure that the operating and capital expenses are paid for. Examples of financial expenses are interest on loans or debt. Loans may be short term and long term in nature. Dividends paid to owners are not an expense to the company.

Expenses are incurred by the business so as to generate revenue. Hence when an expense is made it normally is deducted from the revenue in the Income Statement (http://rajshankar.wordpress.com/2013/11/01/finance-for-entrepreneurs-what-is-a-profit-loss-statement/ ). If the expense is of a capital nature, then the expense is first taken to the Balance Sheet as an asset and based on the life of the asset a small portion of that spending is brought to the Income statement at the end of the year as an expense for that Operating Period. Financial expenses typically affect the Balance Sheet (http://rajshankar.wordpress.com/2013/11/08/finance-for-entrepreneurs-what-is-a-balance-sheet/ ) first as an increase of liability of reduction of asset. Interest paid on debt is typically brought to the Income Statement for the relevant accounting period as an expense.

Let us take a more detailed look at expenses and their impacts on the financial statements in a later lesson. But for now try to understand what these expenses are and how these are different from each other.

Try it: Ask your accountant for a copy of your latest Income Statement and try to segregate the expenses based on the above three types.

Taking the First Step

Many of us in our lives are scared to take that first step. Be it the first job interview, dealing with personal challenges, learning how to drive a car, standing up for what is right, etc – we hesitate and fret on the daunting task in front of us. While our adrenaline has a major role to play in this fight versus flight decision; in most cases, it can be as simple as weighing the pros & cons; and making up one’s mind on the right course of action.

I remember being extremely petrified as a kid trying to learn how to cycle for the first time. I used to get excited and the scared at the same time. At times, I would either refuse to get on the cycle; or once I get on it – would refuse to get off until someone came and helped me with it.

But as a toddler, one is seldom afraid of those first steps. As toddlers, we were all excited about the new found love of being able to walk; there was no stopping us. No matter how many times we fell or got hurt, we were back on our feet happy to explore the world around us. A little crying and forgetting the whole episode enabled us give the walk another try!

One needs to have the same child-like excitement and enthusiasm in an entrepreneurial journey. While deciding to become an entrepreneur may itself be one of the hardest decisions in a person’s career, the difficulties and challenges does not end with just making that choice. First time entrepreneurs normally tread on a path not taken. They do a lot of things for the first time – meeting the first prospective client, finalizing the first client order, delivering the first project, hiring the first members for their team, etc. With no prior experience, it is but natural to falter in the activities they undertake. But it is important not to be deterred by one’s failures or shortcomings. The key is to learn from one’s mistakes and move forward. This is especially true for entrepreneurs who are making fresh plans and attempting to set right past errors or failures from past experiments. Retaining the child-like attitude to falling, dusting off the back and trying again is an important entrepreneurial function.

Getting started and taking that first step is the key to success. This does not apply only to the first time, but to every time. Remember the old adage – a journey of a 1000 miles starts with a single step.

Hope you have taken the first step in this year’s fresh projects towards this year’s fresh goals? If you haven’t – start now. However small or big the goal, take the first step – Just Do It!

Vedantic Wednesday: Take up One Idea

Today is the 1st of another calendar year – 2014. Every person is thinking of what the New Year resolutions should be! Many are drawing their new list of goals for the coming year! While this is not in itself a new exercise, even the way we do it doesn’t seem to have changed too much. Surprised? Ask yourself how you went about the same exercise last year? Did you set goals? Did you make resolutions? And also ask yourself if you stuck to them? If yes, go ahead and continue. But if you feel the approach has not worked for you, then try this new approach.

“Take up one idea. Make that one idea your life.” – this was Swami Vivekananda’s advice to live life. If you look at the many successful people in the world, this seems true. But why is it that the vast majority are not able to implement it? The answer seems to be in the way we organize our lives around our top priority. Even before that is to fix that priority. It is important to find that one idea that is essential for us. This is where many of us falter – we don’t take the effort to find that most important thing for ourselves. Once this has been identified the second point of error is that we don’t take the effort to organize all other activities around that singular goal or priority. If we reach a point where compromise is needed, then it has to be other aspects of life, not the singular priority. If we have not structured everything in their right places around the top goal, when decision points arise, we get confused and often tilt towards the side that provides the short term benefit. This leads us over time to compromise on our top priority – eventually making it look like it was not what we wanted at all in life. The side effect of this problem is that over time the top priority keeps shifting and this gives rise to dissatisfaction and envy.

To avoid so many problems in life, let us take the time needed to find our top activity or goal or priority in life. Once you believe that is the right thing, let us protect it with all our life. Let us give up everything else that comes along the way to live the cause of our life.

Think about this on this New Year Day and enjoy the benefit of clear thinking. Finding one idea for your life brings focus, energy and achievement. It fills our life with activities that energize us and inspires us to do more. Let us hope to live a full, happy and peaceful life.

Season’s Greetings and New Year Wishes 2014!

How did Raj’s Lab perform in 2013

Seasons Greetings and New Year Wishes 2014!

I enjoy reading the report that WordPress sends on 1st January. It gives a summary of the year’s happenings on the blog. Since this was the first year where I attempted to write regularly I decided to look at it closely. It seems to have been an interesting year and I truly look forward to writing more, having more inputs from readers and more conversations across the world.

Here is a summary of the report that I received and I truly enjoyed reading it…

The WordPress.com stats helper monkeys prepared a 2013 annual report for this blog.

Here’s an excerpt:

The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 21,000 times in 2013. If it were a concert at Sydney Opera House, it would take about 8 sold-out performances for that many people to see it.

334 posts (I am becoming a regular writer)

285 pictures (Looks like my blogs are getting some visual lift)

Page titled “Books” seems to have been getting some regular visitors (Hope to add a few more this year) – http://rajshankar.wordpress.com/books/

Visitors from 127 countries (Going Global – as though we have a choice)

Very interesting stats but the most useful thing that the report does to me is – motivate me to write more! Hope to have another year of writing and conversations!

Seasons Greetings and New Year Wishes for a lovely and peaceful 2014!

Character

Character is what one does when he or she is not being watched. When people are watching, most of us live based on what we want others to think about us. But the real character of a person is when he or she is doing the same when they are not being watched over or supervised. So one need not ask anyone else about whether their character is strong or weak, because one knows it for oneself. See what you do when you are alone by yourself – that is your real personality, your real character.

There are people who don’t eat unhealthy food when they are in the midst of people. The moment they get to the room, they hog on all the high calorie, high cholesterol, and extremely unhealthy food. It happens even in the case of people when it comes to non-vegetarian food. They act like they are vegetarians when they are with people and make up for it when they are alone. But who you are as a person is fully displayed when no one is watching! What do you eat when you are staying alone in a hotel room? That is your real personality, your real character.

The more you live away from your character the more you will be agitated. It is better to live the life based on what you inherently believe in. This will bring you to the ecosystem where others acknowledge you for who you are and those who don’t approve will leave you alone. Above all you will be at peace with yourself, with no one to prove to about your beliefs except yourself.

Try to be who you are – it helps in gaining peace and eventually happiness! First find who you are inside and then be sincere to yourself.