In a study to determine the 30 innovations that have changed life most dramatically during the past 30 years, Nightly Business Report, the award-winning PBS business program, and Knowledge@Wharton  joined hands to declare that the Internet ranked the highest. While the result itself may be a no brainer, it is interesting to look at the way they defined innovation. One criterion was that it’s something new that creates new opportunities for growth and development. Another qualification the judges used to identify the most path breaking innovations was problem-solving value.

Now pause for a moment and think of the number of ways the internet has transformed lives, not just businesses. It is quite incredible and something we take so much for granted today. As Friedman said famously, it has been an important factor in “flattening” the world. It has created new industries and business models and also enabled small businesses and even individuals to create a space for themselves. Not only that. The power of viral marketing has been used so effectively for good causes. Just today I was reading about a social media pioneer, Beth Kanter, who used the power of the internet to raise money for her charity (http://www.businessweek.com/innovate/content/feb2009/id2009029_776708.htm?chan=innovation_innovation+%2B+design_top+stories).

In India, several e governance initiatives have brought the government closer to the people and also improved accountability. Online learning has helped not only companies reduce training costs but also educate less privileged children living in remote areas ( check out http://www.comat.com/services_education_more.html). e-choupal, a great initiative conceived by ITC, has helped the Indian farmer get better value for his produce by disintermediating the supply chain. One can go on and on……. The internet has truly helped mankind solve a variety of business and social problems- and we are still exploring; the possibilities abound.

As an aside, social networking through the internet has booked a separate place in the list too and is at 20!  

Those interested in knowing more can check out the full article and the other winning entries at http://knowledge.wharton.upenn.edu/article.cfm?articleid=2163

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I was catching up with an analyst-friend recently and finding out how he is reading the current business environment. Needless to say, the recent Mumbai attacks have added to the woes of Indian It companies, with customers postponing trips, re-evaluating closure dates etc. 

With regard to the overall situation, like everyone else, he too felt that we are in for a prolonged period of weak demand, and hence opined that the larger companies with deeper pockets would be able to tide over better.

Which brought us to the topic of niche players, who were some years back, the flavor of the season. Every industry watcher and strategist recommended that if you don’t have scale, then develop a deep specialization.

In principle, I still believe that this holds true. However, companies have probably faltered in its implementation. So, what transpires is that niche players do the hard work of exploring new areas and trying to build capabilities ( which are unfortunately not deep enough, or unique enough), and in some eays, create a market opportunity, and when the opportunity becomes serious enough, the scale players just swoop down and grab the space.

Take independent testing or IMS, today the Infosys’, Wipro’s and TCS’ have much larger practices in these areas than any “pioneering” niche player.

The solution or way forward therefore in my view is not to abandon the niche strategy but to try to build a genuine differentiation in your delivery capability, and anticipate that competition will come by eventually, especially from the big players.

This is espcially critical, and probably that much more challenging, for services companies.

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I must confess, upfront, that the title has been inspired by the subject line of an email update I got from HBR. I thought it hit the nail on the head.

Several studies, including Prayag’s own Annual Marketing Best Practices Study, have reiterated the importance of measuring the impact of the marketing function on business. However, till date, this area still has not be addressed adequately, which also explains why we continue to have so much research and articles on the subject.

On one hand, it is fairly obvious that if you want to make your function relevant, you ought to demonstrate results, and that automatically means, you measure.

On the other hand, given the qualitative nature of some marketing initiatives, there may be a challenge in quantifying results.

The answer however is not to abandon all efforts to demonstrate results, but to make a few assumptions and arrive at possible outcomes that can be committed to.

There are some programs that are easier to measure, example, online marketing initiatives, demand generation programs and the like. And those may be a good place to start.

From our experience, we have seen  that the importance accorded to marketing is far higher in those companies that pay more attention to metrics.

Further, in a tough business climate, measurement becomes more relevant. Now is the time to present a case for marketing ( contrary to the  predictable response of cutting down marketing spends) by committing to results that can be measured.

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In periods of unprecedented uncertainty ( like we are experiencing now), businesses are often at a loss on how to tackle the market. This results, very often, in knee jerk reactions, short sighted decisions and a spray gun approach to business acquisition.

Here, I would like to quote what I have heard Mr Narayana Murthy say ( and practice) many times- deal with what is within your control, and do not lose sleep over what is not. So, if we look at today’s situation, it is anybody’s guess as to whether we have seen the worst of it yet.  And, there really is no point in  speculating over this – but, this topic is what dominates conversations and occupies space in our head.

Instead, now is the time to look at streamlining operations, putting in place long term measures to tighten processes ( rather than just instituting short term cost cutting programs), and building capabilities. Likewise, now is the time to build deeper relationships with customers, demonstrate in as many ways as you can that you will stand by them in tough times, and sharpen your market focus and invest smartly in marketing.

Simple as it may seem, doing this is not all that straight forward. It requires tremedous discipline and commitment to keep your focus on what is within your control and not fall prey to the distractions around you.

This has been our own experience at Prayag, as well as with some of our clients, who have been discerning enough to stay with initiatives that they believe will give them returns in the long run.

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Yesterday I attended a workshop on Strategic Marketing conducted by Harvard Business School professor David Bell.  One of the  case studies we discussed was Samsung and its transition to a marketing led organization. There was a lot of debate on whether Samsung has actually made this transition, when one of the participants, Jessie Paul, contrasted Samsung with a company like Apple and said that while Samsung may have now established a reputation for good quality and reliability, it is still not “loved” by its target segment – customers or prospective, whereas when Apple released its iphone, people queued up to buy one. That shows that Apple is a brand, and its marketing oriented company.

There was one point of view that to create a powerful brand that is “loved” you need to be small and cater to a niche audience. That set me thinking. True, this is one way to create that much needed connect with the target audience, but it is certainly not the only way.

Take for example, Infosys, or a Microsoft. Neither are niche players by any stretch of imagination. But both are powerful brands that have a strong following ( or set of crtitics). Clearly, the messaging needs to have an emotional appeal – that is definitely the underpinning of brand building. In the case of both these companies, their spokespeople, Narayana Murthy and Bill Gates respectively managed to create those connects. In addition, both companies projected themselves strongly as responsible corporate citizens, which adds to the appeal.

Of course, this was backed by stellar business performance.

I deliberately chose examples of technology companies as it is widely believed that it is harder for companies in this industry to create that emotional connect. 

It is clear that identifying the right message, and communicating with credibility to establish that resonance with the audience is the crux of building a successful brand, all other things being equal or unequal!

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I was invited to be a panelist in a session on “Defining value proposition” as a part of NASSCOM’s EmergeOut Conclave, exclusively for Emerging companies in the IT industry. I shared the panel with Sanjeev Agarwal, now with Helion Ventures, and earlier a co founder of Daksh.

The session was moderated by Ankur Lal, CEO, Infozech.

The format of the session was interactive, and we invited the audience to share their own companies’ value propositions, and articulate the challenges they faced in sharpening the same.

We focused on two key stakeholders- the customer and the employee.

There were a lot of ideas generated, Ankur also presented a framework he had garnered from a HBR article on this subject.

It was clear that creating a proposition that resonated with the stakeholder- be it the customer or the employee, prospective or existing - was the biggest challenge.

While Sanjeev pointed out the importance of credibly articulating the proposition – for example, the management team including CEO engaging with the customer, I argued that understanding the customer context is important in highlighting the right attributes, and identifying the correct levers. For instance, most companies would tend to drop price as a tactic to enhance their chances of closure without understanding if that is a relevant lever for that customer.

Also, I gave examples of Prayag clients who had, even within a services context, where differentiation is not easy, had identified areas to differentiate themselves. Example, look at ways to augment customer’s revenue rather than focus only on cost reduction. Or, offer to share some risk.

Sanjeev also eludicated, from his Daksh experience, the importance of presenting the gains well – he contrasted the way Daksh had presented the gains ( by guaranteeing service level adherence) to that of a competitor from Phillipines, who had translated the same to monetary gains- and won the deal.

We also spent some time discussing how to create and articulate a value proposition for employees. Some of the important points that came up were the need to identify what ticks for the entry level vs what works for the senior folks. Also, we emphasised the importance of candid and regular communication with employees.

Sanjeev also underscored the importance of measurements in understanding if your value proposition is working for you.

It was a great session, with a lot of debate and discussion. I enjoyed myself and look forward to more such interactions with the industry.

Also check out the post  http://blog.nasscom.in/emerge/2008/09/29/emergeout-conclave-2008-defining-your-value-proposition/ on this session.

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