Every One of Us is Creative!

You can do anything if you have enthusiasm. Enthusiasm is the yeast that makes your hopes rise to the stars. Enthusiasm is the sparkle in your eye. It is the swing of your gait, the grip of your hand, the irresistible surge of your will and your energy to execute your ideas. Enthusiasts are fighters. They have fortitude. !ey have staying qualities. Enthusiasm is at the bottom of all progress. With it, there is accomplishment. Without it, there are only alibis.

-Henry Ford

This is a data driven world… where, if something is a fact, then there should be data (hard!) behind that fact to make it a fact in fact!

And there are measures to measure these facts…

Like all other valuable human activities, Creativity is also constrained by these measures…which tend to judge the gravity if the fact behind a creative idea.

So to say…if someone is more creative, then we simply mean that, according to our parameters of measurement, this person fulfills more facts' requirements for being creative…And nothing else.

But what about those, whose creativity fall outside the radius of these, parameters of measuring creativity of humankind?

Remember…Many scientists, innovator, and businesspeople have been considered lunatics, before this world understood their creativity…These people redefined the parameters of being creative…

Creativity is within us…since the day we came into this world…

This world, which is full of instruments of measurements…(Read: Most Jobs are Creative if You are Creative)

For example:

Jugaad…

This is common word in India (you know what it means!)…but the world has slowly accepted the creativity hidden inside of it!...And Of course, everyone has it.

Business Opportunities at THE BOP #2

We are well aware of the infectious disease like spread and scaling of educational institutions around the country (Read: Proliferation of Engineers). Every year thousands of students are entering into newly stabilized or capacity enlarged institutions.

Well it presents at least two big opportunities for doing business. At the first look they all would seem crazy, but believe me they can be (and are already happening) viable business opportunities (BO) today:

These increased numbers of students are in dire need of good food and hostel facility in and around the city, specially near the college and coaching hubs of the city.

BO_ 1. Create a quality (and of course profit) oriented business, But remember consistent monitoring of quality being served is the key to sustainable success. The most important part is that, one doesn’t need huge cash to start a Tiffin/Hostel business. For hostel business, simply take a flate/apartment on rent from the owner and rent it at premium to these edu-lovers…

BO_2. This second BO is dedicated to those students, who made a hard time trying to crack GAT/MAT/CAT/GMAT/JET/GRE…and God knows what many examzzzzz.

Plz if you guys and gals have already invested (Remember: “You never waste something in business, you just Invest!!; specially if you want to remain in that business …!!!”) two+ years in these sort of preparation stuff… Think Htke….

Use your ability to mug (or understand, if I don’t try to be mean..!!), these concepts, by starting your own business; Teaching ! Ya, its that simple. Not really, teaching in itself it hard stuff, but remember: “Time can make anything soft…”.

So go on…these thousands of money packed students are waiting for you with your next business opportunity in every city….you name the city…they are there…. But where r U?

Business Opportunities at THE BOP #1

What is the difference between a developed country and developing country:- Information availability/ Access to information.

It’s true for individuals too…

Access to information is the biggest stumbling block in front of progress of a person/family/nation.

How can this simple fact offer us in terms of business opportunity at BOP?

A farmer in a village is being exploited by the moneylenders or mandiwallas sort of people because he/she does have the information; about: current lending rates, crop prices, right quality of seeds, benefits of providing education to his/her children etc…

These people in a developing country like India are being exploited every day, at every corner by these middlemen.

Where is the opportunity?

Well…the opportunity is: “ElIMINATE THE MIDDLEMEN”. It has profitable implications for both, Companies as well as the poor.

Examples?

Yes, many…

ITC e-choupal : Proving crop related information and trading in agro-produce.

HLL: Sakti Amma and other initiatives.

Drishtee: An rural entrepreneurship programme; providing information in health, agriculture etc.

And many others…

Provoking Action

Those of you who have done their MBA kind of education would be in agreement with the fact that, what we learn in B- or C-schools doesn’t apply to the realities of the Business world.

Well…are we arguing that those Profs who have earned rigorous learning by working in businesses are teaching something else in these B-schools?

Not exactly…

The simulated situation which we find in a B-school's case study is after all is a simulation. And what we discuss in that simulated environment may not be what has happened in the reality!

And after all, there is a big difference between a thought provoking learning and an action provoking learning…

A thought provoking learning would guide our thoughts towards, “How things should be done”. But an action provoking learning would guide our actions towards, “What things should be done”.

There is plenty of wisdom floating around on, how things should be done, but rare are to find words on what things to be done…

Should I do this or that, should I just think or focus on doing something too…!!!

Thought for Life

Before we die, let us ask two questions, which will define the whole purpose of our lives and position a difficult condition for “my-mine-more” thinking that is boiling the eggs of greed inside our minds! (Do u want to know where you actually stand in the world then see it: Where are we... Have a fantastic Trip)

Well these questions were mostly raised by people who are dead today or on the verge of achieving that feat. These questions are:

#1: What do you really want to get out of life?
#2: What can you offer the world that no one else can?

Any clues? Or glues to stick around these thoughts out of our garbage can thought process.

“The term success, is funny in its nature, because those who talk of success measure it in terms of quantity not quality.”

Historical approaches ask for two kinds of actions that can be adopted while solving the dilemma posed by these two questions:-

• Earn today as much as we can and later on do some good to the society with that cash…
• Do as much good as we can, survive and help others do that…

My mind is not into any of the above approaches, which are well accepted but either have hugely failed or partially succeeded.

Instead my mind has been seduced by hybridization of these two approaches; i.e. “Doing Well, by Doing Good”.

World today desperately needs a kind of thinking that is out of the box but, within the realistic limits of getting implemented. My point of argument is not; what is right or what is wrong... Rather what works...

The road less travelled till now is soon going to be the busiest road; the road of Doing Well, by Doing Good. Many MNCs, Govts, and NGOs have realized that fact that, charity or capitalism alone are not capable of fighting the evil of hunger, poverty, malnutrition, health care and education. This is the time for creative-capitalism, i.e. a sort of capitalism that co-creates the wealth that can be shared by all, be it MNCs or poor in the society...

read: Learning from Experiences

Invention vs. Innovation

Nirvana::

"Innovation is far more about prospecting, mining, refining and adding value than it is about pure invention." --- William Buxton

There is no question in my mind that with appropriate management, we can improve the levels of innovation and creativity within organizations. There is no magic here. Innovative people are no more ‘born’ than Olympic gold medalists or virtuoso musicians. Yes, some of us are gifted with more initial aptitude, but as music and sports show, the ‘natural’ or the ‘child prodigy’ frequently does not graduate to the top level. Hard, focused and appropriately- directed work trumps natural talent in virtually every case. The question is, where to focus? Let us start by looking at the anatomy of the beast.

Too often, the obsession is with ‘inventing’ something totally unique, rather than extracting value from the creative understanding of what is already known.

For example, U.S. took a materialistic approach to their investment, focusing on products, while the Japanese focused on process. His observation was that while the U.S. invented DRAM, the VCR or the LCD, it also incurred the highest up-front costs, while the Japanese reaped the primary profit due to their superior processes of manufacturing and distribution.

Today, we have a comparable example in Apple and Dell. Apple is now below Acer in PC market share, but they have beautiful, design-intense systems. Dell’s computers, on the other hand, are boring and have virtually no technical or design innovation. But Dell’s process has given them a dominant market share. Some business publications (e.g., Fast Company, Jan. 2004) have come to the dubious conclusion that this says that innovation may not be all that it was cracked up to be. Of course, what they miss are two things: (a) the distinction between innovation in product and process, and (b) the following rule, which I have decided to decree: innovation in process + design trumps innovation in process alone. This, of course, should be obvious, but it sure went over the head of the Fast Company writers. If you want to compete with Dell, ‘all’ you have to do is match or exceed their innovation in manufacturing and service, and do so with

innovative products.

To find an example that illustrates this, we need look no farther than, yet again, Apple. Forget their PC business for the moment. In the music business, in which both Dell and Apple are competing, Apple is the hands-down winner. While Dell has relied on their previously successful formula of efficient process, but boring design,Apple has triumphed on both fronts in their iTunes and iPod product lines. Apple not only dominates the music market, their sales in that sector now exceed those of their PCs – transforming the very nature of the company, to the point where the tag-line on their new iMac computer is, “From the company that brought you the iPod.” This, despite the iPod being launched only in 2001 – 24 years after their first computer, the Apple II, in 1977!

The first confusion to dismiss is the difference between invention and innovation. The former refers to new concepts or products that derive from individual’s ideas or from scientific research. The latter, on the other hand, represents the commercialization of the invention itself.

Whereas the earlier part of the 20th.century was the century of ‘INVENTION’,the tail end of the 20th. century and the beginning of the 21st. has been dominated by ‘INNOVATION’. If ‘ NECESSITY and NEED’ were the mother of Invention, ‘ GREED and INTEREST’ are the mother of Innovation.

I am a firm believer in the free market economy, so I have no problem with the notion of simple motivating forces like greed and interest being the driving forces that compel individual agents in what is an emergent system.

As an executive, of course we have to have creative an innovative ideas. But at the top of the list should be ones that reflect (a) how important innovation is to the future of your company, (b) the role of design in this, (c) a recognition that innovation cannot be ghettoized in the research or design departments, since it is an overall

cultural issue, and (d) an awareness of the inevitable and dire consequences of ignoring the previous three points..

Competing for Analytics

Many companies in many countries have very strong reasons to pursue the strategies shaped by their analytics. Virtually all companies which are leaders in their respective arenas are aggressive analytics competitors and much of their success can be attributed to masterful exploitation of data. Rising global competition intensifies the need of this sort of proficiency. For example, western companies unable to beat the competition from their Chinese and Indian counterparts on product cost, are seeking the upper hand through optimized business process.

Companies now just embracing such strategies, however, will find that they take several years to come to fruition. For example, many companies in credit cards business find that they need several years of times before their strategy actually starts to work. They need to make process changes in virtually every aspect of their consumer business: underwriting risk, setting credit limits, servicing accounts, cross selling etc. These firms need to keep their managers in their jobs for longer periods because of time required to master quantitative approaches to their businesses.

Even if you talk about, politics, there are ample reasons to believe that success of political parties is largely dependent on the analytics of the data they gather regarding voter perception now a days. Democrats in US carried out extensive analysis of, what the US voter is mostly worried about: financial and physical health but not Iraq war!!

Bohemian companies in the investment world are purely competing on their strengths of their analytics. Today, competing on analytics is the new science of winning. More than ever before, business decisions have multimillion-dollar impact and multiyear consequences.

In case of sovereign decision making countries like India needs to learn a lot. Taking a point, recently India make FTAs with ASEAN countries but, decision was taken without much analysis of resultant profit and loss for the country. We need to fight on over core competencies not on over weaknesses. What's left as the basis for competition? Three things: efficient and effective execution, smart decision making and the ability to wring every last drop of value from business processes.

Impact of Social Cause marketing campaigns on branding

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The research shows, when forming a decision about buying a product or service from a particular company or organization, 83% of the general public feel it is ‘very’ or ‘fairly important’ that a company shows a high degree of social responsibility. Social issues, such as climate change, corruption, election, healthcare and education add to the mix of changes in the expectation of general public. Clearly marketing can ignore these changes in the business and consumer environment, but it does so at its peril.

Consumers not only vote with their feet and their purse against companies and brands they disapprove of, but evidence shows they will also actively change their behavior in favor of those companies of which they approve. In the past, positive differentiation in price, quality and functionality was what was required for success. This is no longer enough and barely noticeable in many sectors anyway. Often, depending on the sector, price, functionality and quality can be replicated – perhaps within weeks or a month, maybe a year – but they are no longer the tools that will maintain differentiation in the longer run.

Emotional engagement and values, on the other hand, are much harder to develop, much harder to replicate and, once established, much more embedded and harder to shift. Investing in values and a ‘bank of goodwill’ can therefore pay dividends. As brand management evolves, values are becoming the key differentiator. The question is does it work? Does taking such a values-led/cause-led approach deliver bottom-line benefits?

The answer is yes. Marketing related to a cause, if done sincerely and executed well, provides a win-win-win. A win for the business, a win for the cause issues or charity and a win for society. One of most successful Cause-related marketing (CRM) programs run by P&G is a partnership between Pampers and UNICEF. Here for every pack of Pampers that a consumer buys, we contribute 1 tetanus vaccine to developing countries. The collaboration has helped raise awareness for the need for tetanus vaccines in developing countries as well as reassured consumers that we have partners with the requisite expertise to execute this. Further, the UNICEF association underlines Pampers equity as a brand that cares about babies. Take the case of Tata Tea, it’s Jago Re campaign started last year with educating citizens regarding realizing their voting power. And it has started a corruption oriented campaign now a day. And Tata Tea has been benefited in the similar lines.

Cause marketing leaders recognize that business and society are linked, and therefore have a unique challenge and opportunity to make a positive impact on society, while also boosting short-term sales, long-term reputation gains and stakeholder loyalty.

Cause-related marketing is a strategy whose time has come. Links with social issues, if made sincerely and professionally, will reap rewards. Do it badly and the consequences could be disastrous, but do it well and success will follow.

STRING THEORY....

Post written by Anshul Gupta. Follow me on twitter.

String theory

In a recession demand falls short of supply, leaving a sorry trail of unemployed workers, shuttered factories and unexploited innovations. But when the recovery arrives, Friedman suggested, it is all the more forceful because these resources have been lying idle, waiting to be brought back into production. The economy can grow faster than normal for a period until it reaches the point where it would have been without the crisis, when it reaches its full potential again (see chart 1, scenario 1).

Friedman’s story is heartening, but it can come unstuck in two ways. If the shortfall in demand persists it can do lasting damage to supply, reducing the level of potential output (scenario 2) or even its rate of growth (scenario 3). If so, the economy will never recoup its losses, even after spending picks up again.

Why should a swing in spending do such lasting harm? In a recession firms shed labour and mothball capital. If workers are left on the shelf too long, their skills will atrophy and their ties to the world of work will weaken. When spending revives, the recovery will leave them behind. Output per worker may get back to normal, but the rate of employment will not.

Something similar can happen to the economy’s assembly lines, computer terminals and office blocks. If demand remains weak, firms will stop adding to this stock of capital and may scrap some of it. Capital will shrink to fit a lower level of activity. Moreover, if the financial system remains in disrepair, savings will flow haltingly to companies and the cost of capital will rise. Firms will therefore use less of it per unit of output.

The result is a lower ceiling on production. In the IMF’s latest World Economic Outlook, its researchers count the cost of 88 banking crises over the past four decades. They find that, on average, seven years after a bust an economy’s level of output was almost 10% below where it would have been without the crisis.

This is an alarming gap. If replicated in the years to come, it would blight the lives of the unemployed, diminish the fortunes of those in work and make the public debt harder to sustain. But even worse scenarios are possible. A financial breakdown could do lasting damage to the growth in potential output as well as to its level. Even when the economy begins to expand, it may not regain the same pace as before.

Financial crises can pose such a threat to national incomes because of the way they erode national wealth. From the start of 2008 to the spring of this year the crisis knocked $30 trillion off the value of global shares and $11 trillion off the value of homes, according to Goldman Sachs, an investment bank. At their worst, these losses amounted to about 75% of world GDP. But despite their enormous scale, it is not immediately obvious why these losses should cause a lasting decline in economic activity. Natural disasters also wipe out wealth by destroying buildings, possessions and infrastructure, but the economy rarely slows in their aftermath. On the contrary, output often picks up during a period of reconstruction. Why should a financial disaster be any different?

The answer lies on the other side of the balance-sheet. Before the crisis the overpriced assets held by banks and households were accompanied by vast debts. After the crisis their assets were shattered but their liabilities remained standing. As Irving Fisher, a scholar of the Depression, pointed out, “overinvestment and overspeculation…would have far less serious results were they not conducted with borrowed money.”

Japan found this out to its cost in the 1990s after the bursting of a spectacular bubble in property and stock prices. For a “lost decade” from 1992 the economy stagnated, never recovering the growth rates posted in the 1980s. Richard Koo of the Nomura Research Institute in Tokyo calls Japan’s ordeal a “balance-sheet recession”.

The typical post-war recession begins when the flow of spending in the economy puts a strain on its resources, forcing prices upwards. Central banks raise interest rates to slow spending to a more sustainable pace. Once inflation has subsided, the authorities are free to turn the taps back on.

But in a “balance-sheet recession”, what must be corrected is not a flow but a stock. After the bubble burst, Japan’s companies were left with liabilities that far exceeded their assets. Rather than file for bankruptcy, they set about paying down their stock of debt to a manageable level. This was a protracted slog which, by Mr Koo’s reckoning, did not finish until 2005. In the meantime Japan’s economy stagnated. By 2002 its output was almost 23% below its pre-crisis trajectory.

Since Pimco’s forum concluded in May, the world economy has palpably improved. In many ways the new normal is beginning to look a lot like the old, vindicating Friedman’s plucking model. China is outpacing expectations. Goldman Sachs is making hay. The premium banks must pay to borrow overnight from each other is now below 0.25%, the level Alan Greenspan, a former chairman of the Federal Reserve, once described as “normal”. Companies in Europe and America are selling bonds at a furious pace. A few months ago financial newspapers were debating the future of capitalism. Now they are merely discussing the future of capital requirements. Shock has given way to relief.

Automated TradinG -- M/Cs Playing With Ur MoneY!!!

Post written by Anshul Gupta. Follow me ontwitter.

Executive summary

The world has changed a lot in the last 10 years. Gone are the days when people used to trade on trading floors. Now it is the time of supercomputers, artificial intelligence programs that run on these machines, decision making in microseconds on millions of situations and money making without direct human interference. Big financial institutions have more people working on design of sophisticated trading algorithms than on the trading floor. This paper is intended to look into the peculiarity of automated trading and how it impacts the market. Since nothing is hidden in the market, an attempt has been made by us to understand it on the eve of a recovering global economy. The paper ends with a few suggestions to policy makers to make the practice healthier for the economy as a whole.

Automated Trading - The Concept

“Algo” trading, used often as a catchphrase for any or all of the following: black-box trading, high-frequency trading or robo trading, is the use of computer programs for entering trading orders with the computer algorithm deciding on aspects of the order such as the timing, price, or quantity of the order, or in many cases initiating the order without human intervention. There is nothing new in using all publically available information to help you trade; what’s novel is the quantity of data available, the lighting speed at which it is analyzed and the short time that positions are held.

Over the past several years Financial Institutions have devoted substantial resources towards developing and maintaining a computer platform1, which allows the Financial Institutions to engage in sophisticated, high speed, and high-volume trading on various stock and commodities markets. The trades made through the platform typically generate many millions of dollars of profits per year for the Financial Institutions.

Sometimes people have say that, how can a system that is computerized and requires no human intrusion, perform at any consistent rate? But that's exactly why it does, since it has no human emotion to contend with. The more humans get involved in trades, the more likely it is for mistakes to ensue. Now there are many traders, who are superb at intuition, and the vast majority of trades happen on "gut feel" - so there is always the sentiment of a loss of control when you let it all happen in an automated way. But you can't back-test "gut feel" and you can't establish how something might have worked in the past when it's based on intuition.

(Taken From My Article submitted to Money manager; a magazine, jointly published by IIM A, B and C)