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This was a presentation I made at the India Strategy Forum. I was invited to be a presenter at the forum and the topic was given to me. I use SAGE as an example of change, change management, innovation, growth and most of all a centre of excellence. The numbers refer to March 2011. The story is even better today.
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Los Angeles | London | New Delhi
Singapore | Washington DC
India Strategy Forum 2011 -
Remaining competitive: possible
strategies for SMEs
Vivek Mehra
Managing Director and CEO
SAGE Publications India Pvt Ltd
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
What is SMEs’ true value to Brand
India?
● Contribution
• 45% of industrial output
• 40% of exports
• Employing 60 million
• Creating 1.3 million jobs every year
• Produce more than 8000 quality products
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Brand India – Global Perceptions
● Bureaucratic and corrupt
● Outsourcing hub for computer software
● Cheap destination for outbound calling
● Questionable quality of products
● Low skill base for technical products
● Culturally incompatible
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Brand India – Fabled domestic
market
● Fragmented across segments
● Low accountability –
• Will save tax and forego product warranty
• High cash spend and hence true income
suppressed
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Brand India – Fabled domestic
market
● Access to global markets
● High aspirational levels especially of Gen
X and Gen Y
● High costs of living – housing, food and
transportation (to work) consume 80% of
income
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Brand India – For SMEs: a challenge
or opportunity?
● A challenging opportunity
● Extremely price sensitive across all segments
• Except the very creamy layer
● Savings based on perceived value not real value (Rs. 2 per sachet is perceived to be cheaper than the bottle)
● SMEs not small enough to survive on local clients
(except in remote rural areas)
● Not large enough to get economies of scale
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
What constitutes good competitive
strategy?
My top 2
Internal structure and company spirit
Brand building leading to product innovation
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Competitive strategy 1: (Internal structure
and spirit) Illustration using SAGE (2006)
● 98 employees
● Middle single digit operating profit
● Revenue that of a large SSI (small ME)
● Decision making highly centralized – (resting
with the MD)
● Attrition rate 40%
● Average spend per employee (non salary) Rs.
1500
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
● Managers with no real empowerment
● No agenda for training and developing
individuals
● Office located in a house – aggressive
sealing drive
● Low aspiration among employees
● MD not easily accessible to employees
Competitive strategy1: (Internal structure
and spirit) Illustration using SAGE (2006)
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Competitive strategy 1: basic re-
structuring
● Empowering managers – decision making
decentralized
● Building processes (automation)
● Documenting knowledge (internal)
● Building (manpower) redundancy within
departments
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Competitive strategy 1: HR redefined
(the CEO’s agenda)
● Open door policy
● Providing anonymous access
● Creating open forums for discussions (Monthly Staff
Meetings)
● Departmental outings to build stronger teams
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Competitive strategy 1: HR redefined
(the CEO’s agenda)
● Interdepartmental conflict resolution procedures
defined tightly
● Direct involvement in the appraisal and annual
increment process
• Charting every employee’s career path
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Competitive strategy – 1 HR redefined
(the employee is the first customer)
● Profit sharing with employees down to the
grass-root level
● Sharing company performance with
employees
● Documenting hiring processes
● HR policies made employee oriented and not
merely legally compliant
● Advertising for candidates repurposed
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Competitive strategy 1: HR redefined
(the employee is the first customer)
● Including families in medical insurance
policies
● CEO actively overruling policies in favour
of genuine employee problems
• Extension of maternity leave
• Extending financial help beyond basic medical
insurance
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Competitive strategy 2: (brand building
leading to product innovation)
● Relocating from a house to a
professionally laid out open plan office
● Ensuring consistent branding across
products and activities
● Building visibility across core markets
● Strategic partnerships with key
stakeholders
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Competitive strategy 2: (brand building
leading to product innovation)
● Strengthening product lines, increasing
output (60 to 100 books, 16 to 50 journals)
● Adding product lines (swimming against
the current)
• Legends in Marketing
• SAGE Impact
• SAGE Law
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Strategic Tie-ups
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Report Card 2011 vs 2006
● 227 employees
● Revenue up 5x
● Double digit operating profit; growth 4.5x
● Attrition = 10% (industry standard 18%)
● Average spend per employee (non salary)
= Rs. 20,000
● Average print run
• Academic 1200 units (industry standard 300)
• Retail 3300 (industry standard 1600)
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Sneak peek
● Legends in …
● SAGE e-veda
● Journals 50 to ???
● Project Aristotle ???
● …???
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Two rules to live by
A CEO doesn’t live in an ivory tower, he lives
in a glass house.
Break the mould.
India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Thank you
Vivek Mehra
vivek.mehra@sagepub.in
contactceo@sagepub.in
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