High-Performance Entrepreneur
by Subroto Bagchi
You have the assorted management textbooks on entrepreneurship and a whole bunch of self-help books on various aspects of management. Then there is the enormous body of literature by people who have written success stories long after the success was born. (Location 79)
Very little of it is narrated in the first person by the people who actually did it. That told me, this book is needed. (Location 81)-
I have a dream, though. Ten years from now, somewhere a person will say, his or her entrepreneurial voyage was helped in some small way, by reading this book. (Location 84)
A book’s strength lies not just in what is written in it. It is about what you could potentially take away from it. (Location 85)
Entrepreneurs create jobs. Jobs provide people with livelihoods. Without a livelihood, every one of us is lost on this planet. (Location 96)
Thus developing entrepreneurship should be a matter of global priority. (Location 98)
Entrepreneurship has arrived as a subject of study. Yet, no one learns its nuances by only going to a college any more than you can learn skydiving by watching a National Geographic film. (Location 101)
Entrepreneurs are very focused and busy people. You will seldom find them writing a book on how to start a company. (Location 104)
This book is not about how to start a company. It is about creating high-performance entrepreneurs. (Location 106)
High-performance entrepreneurship differs from the act of just starting something on your own and being self-employed. (Location 107)
High-performance entrepreneurship is not an accident—it has to be planned that way. (Location 114)
The most exciting thing about entrepreneurship is its capability to create jobs. Creating large-scale job opportunities through high-performance entrepreneurship is fine, but we all know that the exercise is fraught with a great risk of failure. (Location 121)
High-performance entrepreneurs create great wealth. (Location 124)
Often they use the power of wealth to build a legacy for society at large. (Location 124)
Behind the great educational system of the US, for instance, is a huge amount of personal wealth donated by entrepreneurs. (Location 125)
Entrepreneurs drive innovation. Innovation seldom comes from very large and established players. (Location 127)
The reason is simple. Innovation disrupts the established way of things. Large, profitable organizations frown at disruptions. For innovative people, it is sometimes easier to start something ground-up. (Location 128)
Entrepreneurship can be deeply rewarding simply as a journey itself. The richness of experience and sheer self-confidence you get from starting a small shop is sometimes greater than running a huge department for an established entity. (Location 129)
Entrepreneurship is a creative process and when done successfully, it can give you the highest sense of accomplishment possible. (Location 132)
There is no government in the world today that says we do not want peace and we do not want entrepreneurs. (Location 134)
Funding is becoming global and, more importantly, resources are following ideas. There is a surfeit of angel funding, private equity, and institutional venture capital funds today that are willing to provide risk capital to people with vision, ideas, and commitment to building something new through sheer hard work. (Location 135)
Yet, a closer look at an Apple, Intel, or Infosys will tell you, that none of these just happened. Their movement from being another start-up to becoming high-performance entrepreneurship was most certainly planned with meticulous detail. (Location 141)
When Do I Know If I Am Ready? (Location 148)
But the critical first step needed to be an entrepreneur is the ability to make personal needs and comforts subservient to the larger organizational goals. (Location 163)
Much as Neil was fantasizing about starting a company, the prospect of a lifestyle drop unnerved him. He pushed the idea out into the future. (Location 167)
If the leaders do not demonstrate frugality, it is very difficult to build the requisite culture in an upcoming organization. (Location 178)
Yes, this could mean giving up on the fancy car, a drastic reduction in spending money or personal time. But that is the way you build wealth. Comfort with postponed gratification is a critical requirement of entrepreneurship. (Location 179)
her happy. So, what did Ismail do to buy (Location 196)
If even remotely, the thought of a safety net haunts you and you cannot talk yourself out of it, you are not yet ready to set sail. (Location 200)
Finally, there cannot be thoughts of exit options in the event of a failure. (Location 202)
One must remember that failure cannot be an option when you raise money from others or take (Location 202)
on employees who work to make the shared vision a reality. (Location 203)
Sometimes failure is forced upon the entrepreneur by external factors. For every organization that succeeds, countless others have to fail. That is the rule of the game. (Location 204)
Yet, failure cannot weigh on your mind so much that you become tentative in your search for success. (Location 206)
Would I feel lost if my boss found out about my desire to venture out and gave me the pink slip? Have I discussed the venture and the possible outcomes with my dependents? Am I ready to give up my house, car, club membership, and official position? Would I be willing to take a serious salary cut to make sure the company is not saddled with a fat compensation structure—and thereby can break even sooner? (Location 208)
Would I be happy traveling economy class as against the business class travel I am so accustomed to as a vice president in a multinational corporation? Will it be fine with me to stay in a modest hotel and travel by train and not a taxi? (Location 212)
Is it all right for others in the company to earn more than me? Am I willing to work 70 hours a week for the next few years to make sure the company stands on its own? Will I be comfortable working out of a cheap business center or from a downmarket address, with bad air-conditioning, hired furniture, poor lighting, and no secretaries? (Location 214)
Note: let's move out of this forced frugality. It hurts in the long term.
Will I be comfortable making my own phone calls, writing my own memos, and creating my own set of slides? Will I be able to set my own goals and work unsupervised? Will I feel awkward going back to people who reported to me a long time ago to solicit business? (Location 218)
starting a company is like deciding to have a baby. (Location 223)
It is a very difficult task, full of discomforts and sacrifices. Yet, when the time comes, a woman would give up everything in the world to be able to bear her child. No pain, no discomfort, no change in lifestyle daunts her from becoming a mother. (Location 224)
Starting your own enterprise is a little like motherhood. (Location 226)
Many great companies have been built by friends. Having said that, personal friendship can also come in the way of creating great organizations. (Location 233)
At the same time, we know myriad examples where familiarity bred contempt, and not only did the companies go haywire, but so did the relationships. (Location 236)
When friends come together, they need to put the commitment to build an organization ahead of the joy of togetherness. (Location 236)
no enterprise gets built on the strength of a single great product idea. (Location 245)
So, while having a fantastic idea is a great starting point, unless there is a reasonable view of what larger business the company can be in, the life of an enterprise can be very short-lived. (Location 248)
Companies, like ideas, have a life of their own. A founder who thinks that one potentially great invention is a good reason to start a company needs to introspect. (Location 255)
Is it a great idea in itself or is it the vision of a family of ideas? (Location 256)
you have invented a great product, you could just sell it or settle for an internal honor by filing a patent for the organization you work for. Building an organization that will spawn one great idea after another is a very different proposition from inventing one great product. (Location 257)
Building a company is not like planting one giant tree. It is about creating an entire forest someday. (Location 261)
You may not know exactly how. You may not have the remotest idea of where the know-how and the resources will come from. Yet, you must live that thought, you must be exhilarated by the prospect of doing it. (Location 262)
Note: Amazing
Only then will you be willing to pay the price, brace the ups, and (Location 263)
downs and draw strength from the size of the dream when everything around you threatens to crumble. (Location 264)
This one is the popular mid-life peeve: My career is not getting anywhere. I hate this company and I do not like the boss. I want to start a company. (Location 265)
When we give birth to a great idea that gets converted into an institution, there has to be a greater reason than just the stress of our circumstances. (Location 277)
I once met a 26-year-old engineer who wanted to get started without being clear about what he would do. (Location 289)
All he was telling me was: ‘Oh, but if not now—when? My time is running out!’ (Location 291)
With five years of work experience behind him, all he had done was write software code for which someone else had created the specifications. In a very serious vein, I told him to get a girlfriend, get married and raise a family, learn intensely for a few more years, rotate a few jobs, expose himself to sales, marketing, and business finance, and only then start his company. (Location 292)
In reality, the time is now only if you have the mission, vision, and values worked out. The time is now if you have put together a team who shares your personal values. The time is now if you are confident in your ability to envision a future and have the commitment to create a ‘family’ of products or services and not just a single invention. The (Location 297)
time is now if you have the ability to raise an adequate amount of money. The time is now if at a personal level you think that you will be able to dedicate the time and energy needed. (Location 300)
The time is now if your spouse and family approve of your decision to take the plunge and face uncertainty for the next ten years. (Location 302)
If you do not love money, it is unlikely that you will ever understand the nuances of generating wealth. (Location 307)
It is unlikely that you will ever know the difference between a paying customer and an admirer of your work. You will not know the importance of cost management, of the obligation of an enterprise to generate tangible value for its stakeholders. (Location 308)
Profitability is a social obligation of the enterprise. (Location 309)
When companies fail on a large scale, economies and lives are destroyed. (Location 310)
While the focus of this book is to encourage people to start their own enterprises, one must also be aware that creating a company is not child’s play. (Location 313)
When you build a company, you assume responsibility for your investors. You assume responsibility for the people who will buy your goods and services and use them. You assume responsibility towards all the good men and women who will work along with you to achieve your vision of growing a forest with the little sapling you hold in your hands today. (Location 315)
Is there something in common between GE’s Thomas Alva Edison, Microsoft’s Bill Gates, the Tata’s Jamsetji Tata, Dell’s Michael Dell, Wal-Mart’s Sam Walton, and Sony’s Akio Morita? (Location 324)
You cannot show me a person who does not believe in herself and yet is a successful entrepreneur. (Location 330)
However, if at the time of starting out on your own you do not have a sustained phase of self-confidence, I would advise against venturing out. Wait for the right time. (Location 335)
small things, significant nonetheless, that hold the key. Strung together, they show your level of self-confidence. (Location 366)
To determine your entrepreneurial streak, ask yourself if you tried out unusual things and whether you enjoyed them. (Location 367)
Did you take the important decisions in your life or did someone else invariably take them for you? (Location 368)
Did you enjoy the process, irrespective of the outcome? (Location 369)
How well did you handle small adversities and who took decisions for you at that time? Did you ever feel helpless? Did you get out of the situation by taking your own decisions or did you allow the situation to determine the course? Can you make friends with a stranger? (Location 370)
Do you know your physical and mental limitations? (Location 373)
Do you think you can work to overcome them? (Location 373)
Do you feel comfortable talking about yourself? Do you feel comfortable asking others for help? Does the act of buying and selling excite you? Do you like meeting people? Do you see things to completion? (Location 374)
Entrepreneurs value their sense of freedom, but they are also very disciplined (Location 378)
All my life, both on the personal and the professional fronts, I have enjoyed being free to set my goals and create and work towards my own work plan and take my own decisions. (Location 381)
like taking instructions from more competent people and my customers. (Location 382)
But I do not like someone telling me how to go about doing my work. (Location 383)
I work best when I am given what is called a ‘porous boundary’. (Location 383)
One is responsible for ensuring that one’s stakeholders are delivered a beneficial outcome, if not always, at least most of the time. (Location 385)
Freedom is not a lack of answerability. Many people mistake freedom for the absence of accountability. Freedom to me is the ability to explore and settle options the way I think is suitable and the ability to work within porous boundaries. (Location 387)
A good entrepreneur is a highly disciplined person. Freedom to such an individual is an inner need for space in which the person can create greater value without interference. (Location 392)
That process of creating greater value often involves risks, of trying creative ideas to stay ahead. (Location 394)
He does not enjoy someone pulling him from behind or asking for a progress report by breathing down his neck every now and then. (Location 394)
Every quarter, we meet all MindTree Minds for what is known as ‘What’s on your mind’ and people put us on the mat. (Location 398)
Freedom to an entrepreneur is the ability to choose a line of business and set goals consistent with stakeholder ambitions. (Location 404)
Freedom is the ability to write and revise a business plan. Freedom is the ability to make a decision on a given product and service strategy. Freedom is about the ability to choose from whom you want to make money, and on what terms. Freedom is the ability to decide whom you want to hire for what job. Freedom is the ability to settle policy that will govern the internal working of the organization. Freedom is the ability to say (Location 405)
that the debate rests here and the decision begins. (Location 408)
Freedom is also about reaping the risks and the rewards that come from all this but within the articulated guidelines of a business. (Location 408)
Entrepreneurs work hard and are extremely goal-oriented (Location 410)
How do we quantify hard work? (Location 411)
That number is a minimum of 60 hours a week, in reality, closer to 70. Premji averages 80 hours a week. That is hard work. (Location 416)
Note: It's more in life than hard work
He settles his vacation dates at the beginning of the year and these are non-negotiable. (Location 420)
Note: It's not just about vacation. I understand that the book was written in 2006.
Along with hard work, comes the ability to work unsupervised. It is a critical requirement of entrepreneurship. As a paid professional, often someone can blame the system for not providing either the direction or the resources. (Location 423)
That is why venture capitalists have coined the term ‘sweat equity, the ownership that comes by the sweat of your brows. (Location 425)
Entrepreneurs are flexible, opportunistic and recognize the power of ‘emergence’ (Location 427)
Had it not been for Watson’s capability to go with the emergent flow of events—moving from accounting machines to the recognition that he could make general-purpose computers—IBM would not be what it is today. (Location 435)
We all know that the essence of entrepreneurial ability is about building a future and living in it. (Location 437)
not always go the way you plan. Destiny tests you all the time, play pranks, and shows tiny openings in a moss-covered brick wall behind which often a whole new world awaits. (Location 438)
Providence is very powerful in our journeys and entrepreneurs must make room for her. It is not always what you bring to the table. Sometimes, it is an unexplainable turn of events that changes your course. (Location 451)
Note: But we can influence the probability of that happening
Nine out of ten companies born at the same time as us, anywhere in the world, do not exist today. Entrepreneurship requires the ability to read patterns on the wall, flexibility, and an uncanny ability to seize the moment. (Location 467)
when you start your own company, you must know that you leave your past behind. (Location 471)
A person’s corporate success often comes from the power of the chair he sits on. (Location 472)
People have a hard time coping with the attendant loss of identity. (Location 474)
In all this foraging, you will come up against strangers. Some will love you for reasons you will never be able to fathom. Some will be brutal with you. (Location 476)
am sure when a rose bush is pruned, it does not like the experience. But without the pruning, it will not give great blooms. In the early years of setting up shop, one has to budget for a lot of pruning. (Location 483)
Even if you are entrepreneur material, possessing patience, resilience, empathy, and politeness in very difficult situations, the sense of rejection can lead to occasional self-pity. (Location 489)
So, acceptance and rejection are equally transitory, result in equally unpredictable outcomes, and must be treated with equanimity, without involving your ego in the results. (Location 508)
Investor money is meant to bring in customers, build and deliver products and services and generate cash before you start leading a life of such luxury. (Location 511)
Entrepreneurs love money If you do not love to make money, do not start a business. (Location 517)
I meet a lot of people who love technology, so they want to (Location 518)
start a company. I meet a lot of people who tell me that they have earned enough in their life and now want to set up a company to ‘give something back'. None of these people will ever make great entrepreneurs. Sometimes, we think the love for money is all about spending power. (Location 519)
Some people have disdain for money because they associate money with being consumerist. In the hands of a creator of wealth, it is not always so. (Location 521)
Note: Amazing
Some people like to make money so that they can change the state of things around them. Some enjoy the recognition and some just get a sense of high. (Location 522)
Some people have a deep need to build a legacy and see wealth as the way to do (Location 523)
In the Hindu pantheon, wealth is granted by a goddess named Lakshmi. She is extremely jealous and possessive. She does not come to those who treat her as if she is incidental. (Location 532)
A great idea that leads to a family of ideas, and solid implementation. (Location 539)
just one great idea of a product or service, however path-breaking it may be, is unlikely to lead to building an institution unless it evolves into a family of ideas. (Location 540)
idea. An ‘aha’ idea is about the power of invention, and by itself, may not be adequate to create an organization. (Location 542)
to think that the inventor could equally succeed as an entrepreneur, and a high-performance one at that is a long shot. (Location 545)
The genesis of high-performance entrepreneurship is often in sensing a larger opportunity, tucked within which could be an inventive thought. I feel that it becomes more important to sense that larger opportunity, a big picture of sorts, and have a sense of affection for what one sees as the outcome. (Location 546)
Peter Drucker, the legendary management philosopher, said before he died in 2006—people do not know how profound the impact of demographic changes in the world will be in the twenty-first century, and how that will bring in unusual opportunities and dislocations for the world of business. (Location 582)
‘Decisions are often taken before they are made.’ (Location 599)
Deccan Aviation was born with a single helicopter. (Location 600)
In India, before the influx of budget airlines, air travel was a luxury. (Location 608)
It occurred to Gopinath that if he could take advantage of the huge population of India and run a no-frills, low-cost airline, it would be a good alternative to traveling by train. (Location 609)
Air Deccan was born out of the larger realization that the ordinary Indian needed to fly! (Location 612)
How does Kiran Mazumdar-Shaw choose one idea over another? She asks herself seven questions. (Location 641)
Do I have a basic understanding of the area? Do I know something about what is happening in the larger space of that idea? How will I build differentiation, particularly if the idea is a common product? (Location 641)
How do I make it affordable and at the same time, deliver high value? Wherever there is a collaborator involved in the ideation process, how do I create larger leverage through the relationship beyond just that one idea? (Location 643)
Do I know upfront who will be a paying customer and how I will go about marketing my idea? Finally, do I have conviction about the idea? (Location 644)
Shifting the conversation to you, the question is, as you pursue your dreams, what does the writing on the wall tell you? (Location 652)
Low-cost housing? Micro-credit? Retail? Water? Security? Hospices? Leisure travel? Education? Energy-efficient vehicles? Content creation and management? Music and entertainment? Counseling? Garbage recycling? Tree-grooming services? Pet food? (Location 653)
The germination of an idea behind an enterprise often happens in solitude and contemplation. It need not require thumbing through fat feasibility reports that a bunch of MBAs has written—if they have figured it all out, why aren’t they already in the business? (Location 656)
It helps to see the world around you and to think of the way things might change in the next decade or two, and chances are that in thinking backward from the future, your great idea will emerge. (Location 659)
Sometimes the idea is neither original nor earth-shaking, but the execution had better be, and that changes the name of the game. (Location 660)
Sometimes entrepreneurs get their ideas while visiting tradeshows or attending industry events, sometimes while networking with other entrepreneurs and venture capitalists, sometimes by reading up reports on global trends, sometimes by visiting research institutions, sometimes by simply asking why and often, why not. (Location 670)
In the Valley, you learn to develop an affection for speed and professionalism. (Location 684)
Living in the US, you became used to a highly customer-oriented, efficiency-seeking system. (Location 685)
While compatibility is important, personal liking and social contact are of secondary consideration while building a professional team. (Location 708)
Sometimes, we seek sameness when what we are actually looking for is complementarity. (Location 709)
When you build a team, you do not start by looking at compatibility and sameness. You look for complementary skills and diversity. (Location 714)
In any start-up team, there are a few things that the founding team must possess from day one, whatever may be the business idea. These include the ability to bring business, the ability to produce and deliver, the ability to read numbers, and the ability to negotiate with investors. (Location 717)
If the founders themselves do not possess these capabilities, they need to co-opt someone who does on a full-time basis and make the seed team complete. (Location 724)
Friends are meant to give you good wishes, pray for you, occasionally bail you out with a personal loan, and show up in the days leading up to the IPO to make a small investment. They are not meant to pound the streets for you. (Location 731)
You have to build your own team to do that and you have to do it yourself. (Location 732)
When I look at great founding teams, I invariably see nine characteristics. When you set up your very own ‘A’ team, look for these. (Location 734)
- Proven competence, ability to pull one’s weight (Location 736)
I come across a lot of people who claim to have written many papers, spoken at many conferences, filed patents in a large corporate set-up and so on. But look at them closely and you will find someone who has been a product of his or her environment. Not someone who has created the environment—however small it might have been. (Location 738)
You will find a lot of cerebral people who have never led a team through corporate rough waters or pulled their organization out of difficult customer situations. (Location 741)
They are unlikely to be effective as a seed team in building a company ground-up. (Location 742)
A start-up is no place for overheads. People must be able to earn their own upkeep and some more. (Location 744)
Every individual must be closely associated with the business creation process. (Location 745)
Either you bring business or you execute business. (Location 746)
Alongside there may be a few people who assist those who do either of the two and their presence is justified only when their value addition is direct, visible, and measurable. (Location 746)
Building a company is not a part-time engagement. (Location 750)
- Complementary Composition (Location 751)
of complementary composition. I am supposedly good at long-term thinking, marketing, people development, and that kind of stuff. Krishna Kumar combines the capability to sell, read numbers and intuitively understand technology issues. Parthasarathy is (Location 752)
Note: Do this for each employee. People Are more than their KRA and so it would be a good idea to look at them holistically
all that comes only later. To begin with, you need a team whose members make up for each other’s weaknesses and occasional failings, a team that looks like an organization in a microcosm. (Location 763)
When you are able to do that, you have two great (Location 765)
things going for you: the ability to attract investors on fair terms and the ability to attract the subsequent talent. (Location 765)
When the core is strong, it becomes easier to attract other good people around it. This is what I call the fractal geometry of organization building. (Location 766)
- Multitasking capability (Location 767)
A start-up organization requires the seed team to have the built-in capability to do more than what the individual members are responsible for. (Location 768)
When the seed team demonstrates dynamic reconfigurability, it inspires confidence within and outside. (Location 770)
In all such exigencies, it is important to keep the momentum without missing a beat. This requires phenomenal ability and willingness to multitask. (Location 779)
As an organization matures, it is necessary to retain that spirit so that every senior person becomes responsible for at least one additional organization-wide key responsibility. (Location 780)
- Shared Vision (Location 783)
word vision as defined by the dictionary means the act or faculty of seeing, but also a thing or idea perceived vividly in the imagination, a view of something that does not yet exist. (Location 784)
leaders are people who others opt to follow to a place they would not go by themselves. (Location 786)
Vision, Barker says, must be measurable and timebound. It is something that must be uplifting and inspirational because people rally around calls to climb mountains, not molehills. (Location 788)
Barker’s film The Power of Vision is a must-see (see Entrepreneurship Resources at the end of the book) for entrepreneurs who want to build something memorable. (Location 789)
if you were to put teams through a structured ‘visioning exercise’ in which each individual articulates why he or she is there, you would find enormous variations in what each one thinks the goal is, their personal expectations from it and commitment towards it. (Location 791)
Note: Can be done
A shared vision is a sketch, the artist’s impression of a future in which the team would live. (Location 799)
Note: Objective function
- Transparency (Location 800)
While every individual has a private side to him and is entitled to his privacy, any aspect that can affect the working of the person or impact the collective future must remain in a shared domain. (Location 806)
Not only that, such information has to remain current at all times so that no one is taken by surprise. (Location 808)
Personal integrity and mutual trust (Location 815)
What is integrity? It is difficult to define the term. Synonyms include honesty, veracity, truthfulness, honor, and uprightness. (Location 816)
People who come together to build an organization must have the highest confidence in each other’s personal integrity and be sure that trustworthiness is not an issue. (Location 817)
integrity and trustworthiness, a simple test comes to my mind. If, for some reason, I am not around tomorrow, could I trust my children’s affairs with any of these men? The answer is a big ‘yes’. That dependability is founded on total confidence in their integrity and trustworthiness in all inter-personal dealings. As (Location 822)
If a potential team member lacks integrity, however competent the person may be, he or she poses an institutional risk. (Location 827)
Integrity is not a matter of convenience and partitioning. In my opinion, someone who lacks integrity in personal transactions cannot be depended upon in a professional sense as you build an organization. (Location 828)
In building an organization, the lines separating the personal and the professional get blurred. (Location 830)
Note: Take note about personal life
The standards of personal integrity and trustworthiness of the seed team will determine the shared understanding of organizational integrity and corporate governance at a later date. (Location 832)
In a murky business environment, organizations that stand for integrity are immediately differentiated. (Location 833)
They attract premium valuation because a potential investor knows the risk of giving money to someone who will cut corners. (Location 834)
As you build the organization, it will become important to widely communicate a formal integrity policy. (Location 837)
Ability to question each other and take disagreement in stride (Location 843)
The freedom to disagree is sometimes more important than the ability to agree. (Location 844)
If teammates are not capable of thinking on their own and thinking together, they cannot build a great organization. (Location 845)
Thinking together does not mean thinking alike. Thinking on their own would mean that sometimes team members must disagree with each other. (Location 845)
What is not a good thing is confusing issue-based disagreement with personal disagreement. (Location 846)
It took a while for them to realize that while in friendship, the agreement is essential, in business, disagreement may be more beneficial to the enterprise. (Location 853)
But what becomes critical is building the maturity to be able to deal with disagreements and harvest great decisions by making it a process. (Location 854)
Diversity of thinking and constructive confrontation bring out the best in teams. (Location 855)
They also involve each person’s ability to see things from a unique vantage point. Yet, great teams know when to stop arguing and where to draw the line. (Location 855)
Personal ego is subordinate to an organization’s progress. The important thing about disagreements is the self-confidence, mutual trust, and candor to voice them. If people were to hesitate to say what they genuinely feel, it would be difficult to build a great organization together. (Location 857)
When a core team is able to practice and present diversity in thinking, it spreads to the rest of the organization. (Location 859)
In such an organization, people speak up rather than keep things inside because they know that this is a way of getting to the best decisions. (Location 860)
- Resilience (Location 863)
As you build a company, things never go exactly as per plan. (Location 864)
On the way, start-up teams suffer high highs and low lows. (Location 864)
More than once in the first few years of existence, every entrepreneur will go through feelings of helplessness, rejection, and loss of direction. (Location 864)
Key people leave at a time you least expect them to. (Location 866)
Assured business just goes away. A competitor pulls the rug from under your feet with a discontinuous business model. (Location 866)
Your board or your venture capitalist or your partner behaves in a strange manner. (Location 868)
Resilience—it is that one thing above everything else, that makes entrepreneurs very different from everyone else. (Location 872)
Take resilience out and you just cannot become an entrepreneur. (Location 873)
Sometimes, I feel, it is not the greatness of an idea or an individual but the sheer ability to hang on that helps create great organizations. (Location 873)
I know about the power of resilience—of listening to the voice within and sometimes doing the intuitive thing. (Location 882)
Resilience is not just about professional issues that may come and go. While you are trying to build a company by breathing and dreaming your vision, you may have problems with a loved one at home, or you may run into a serious health issue that needs addressing. (Location 892)
Humour is, indeed, a very serious issue. People who cannot laugh at a situation or at themselves, cannot pull their enterprise over the long haul. (Location 898)
While organization building is a serious affair, a sense of humour makes it a bearable experience. (Location 900)
If a person is highly competent but lacks a sense of humour, I would not take such a person as part of a seed team. (Location 901)
Strategic branding relates to the creation of a corporate identity and communication of the brand. (Location 911)
every human being’s uniqueness lies in his DNA. It is how we pass on something of ourselves to our progeny. Likewise, every organization that is born and will continue in time must have its own DNA. It is the reason for its existence—something that cannot be changed without changing the very structure of everything that the organization represents. (Location 924)
As a result of this conversation, the founders of MindTree got together and we settled that the DNA of MindTree would be imagination, action and joy. (Location 927)
Imagination, because our clients require solutions that are new and different. Action, because we must take responsibility for what we advise our clients. It also connotes high achievement orientation. Joy, because while delivering imagination and action, we want to convey happiness—the world does not like to deal with people who do not radiate joy in what they do. (Location 929)
The next important step is to settle the mission statement of the company. A mission statement is often called a North Star statement. It is aspirational and direction setting. It is a statement that shows what the company wants to be. (Location 936)
Neither customers nor employees like to deal with an unfocused organization. (Location 947)
While the mission statement tells us what kind of organization we want to create, the vision statement that flows from it consists of a set of intermediate goals that define success. (Location 974)
While choosing the set of goals, it is not unusual to consider: (Location 975)
A financial goal: reaching a certain level of business and profitability and return on investment in a specified time-frame — An admiration goal: being among the best employers in a given category or to win an industry-level award or recognition — A goal towards social sensitivity: something that the organization would stand for. (Location 976)
The vision consists of intermediate, measurable and time-bound goals that you promise to yourself and to all the stakeholders. (Location 980)
Note: I think thats mission instead
The founding team must spend all the time necessary to think these through. Yet, none of these occupy the top of the mind recall of people as the organization grows. (Location 991)
In MindTree, the values chosen for our day-to-day working have a set of five elements. These are: Caring, Learning, Achieving, Sharing and Social Responsibility (CLASS). (Location 996)
The Performance Management System has three components against which everyone is evaluated at the end of a year. These three are: How did the person perform against the set of agreed upon annual objectives? How did the individual stack up against the competencies for a given role? And, finally, how has the person lived the CLASS values during the preceding year? (Location 1046)
The DNA, mission, vision and values serve to create a lot of back pressure on the system. Every now and then, people question decisions and management action when they find inconsistencies. It is important for the management team to actively encourage such questioning—it is the only way to keep the system honest and send a message that the values are a shared wealth. They grow when protected by everyone in the system. (Location 1053)
One of the ways they get internalized is when values are violated by someone and the system watches how the management team deals with the violation. (Location 1057)
The organization’s conviction gets tested when the management team has to pay a price to defend the values. (Location 1058)
In a talent-starved world, every future employee will want to know how you build differentiation in what you do. (Location 1065)
For instance, Apple is different because of its design, its cultish culture. Intel is different because of its ability to constantly increase microprocessor power at reduced prices. (Location 1070)
Dell is different through its knowledge of the supply chain. (Location 1072)
In the competitive world of global business where choices outstrip demand, every stakeholder wants to know how you are different. (Location 1074)
Only a few know enough to appreciate that differentiation is strategic, deep, embedded in process and for the most part, difficult to explain but easier to sense. (Location 1078)
So, what really makes one airline very different from another? Why do people who fly Jet Airways or Singapore Airlines or Lufthansa know that these are very unique organizations? (Location 1086)
Capital or technology does not, in today’s world, deliver differentiation. (Location 1087)
It comes from sustained management thought and practice, till it becomes the culture across, say, an organization as large as Lufthansa with its huge fleet of aircraft and pilots and staff drawn from many nationalities. (Location 1088)
I have always believed that differentiation is a six-horse chariot. Six equally strong horses. They need to pull it in the same direction, at the same time, with the same energy. These six horses are: domain, tools, methodology, quality, innovation and branding. (Location 1090)
Successful companies are closely associated with a primary field of focus. We cannot be everything to everyone. (Location 1092)
Increasingly, people will choose to work with enterprises that do some thing so well that they are associated with that domain. In other words, they build specialization. (Location 1094)
That is how they deliver value and win customer loyalty. They are so good at the specific area of their work that people think they ‘stand for it’. Focus on a domain gives the ability to stand for that something. (Location 1095)
Taj Hotels stands for great hospitality. Starbucks stands for a trendy coffee culture with environmental responsibility. Target is about affordable designs for the community, making neighbourhood retailing a relationship-driven experience. (Location 1099)
Apple stands for innovation. Honda stands for high quality mid-range cars. Mercedes-Benz stands for luxury and flawless design. Disney stands for family entertainment. Porsche spells design and so on. (Location 1101)
what would your company stand for? In other words, what will be your domain? (Location 1103)
Successful and differentiated companies use unique and sometimes better tools than their competitors. (Location 1104)
Tools help productivity. Wise and careful choice of tools decides the difference between the best and the second best. (Location 1105)
As you grow your organization, ask yourself, what are going to be my tools? How will they be different from those used by others? (Location 1115)
in today’s world, tools can be acquired by anyone. To stay differentiated, you must go beyond tools and focus on the third aspect of differentiation, which is methodology. (Location 1116)
Methodology is your special way of doing things. Great enterprises lay importance on developing their way of doing things. (Location 1118)
The fourth area of focus that helps build differentiation is quality. (Location 1129)
Process-focused enterprises are quality enterprises. Like an outstanding runner, these are people who take every aspect of their sport seriously and pay full attention to the act of delivery without getting distracted by the ribbon that is waiting to be braced at the end of the race. (Location 1135)
we also have to realize the importance of focusing on innovation as a strategy to build differentiation. (Location 1140)
Innovation is the ability to continuously come up with ways and means which… (Location 1140)
Innovation is the ability to… (Location 1141)
such a world, winners are invariably associated with their ability to think differently, act… (Location 1142)
Being innovative is not a chance event, it is a result of the mind being trained to think in newer, more… (Location 1145)
Tools like Six Thinking Hats and TRIZ and Systems Thinking are being increasingly deployed to make… (Location 1146)
More and more companies are paying attention to the use of knowledge management practices to build intellectual capital in an organization so that the end result is a steady stream… (Location 1148)
Great companies of the world are beginning to focus on the… (Location 1151)
If one can make a huge difference to a customer’s customer, it helps build the stickiest relationship—the… (Location 1152)
organizations use branding to establish their unique identity in… (Location 1156)
It is about building mindshare among customers, suppliers, employees and investors, as well as the community at large in… (Location 1157)
winning companies are well-branded… (Location 1158)
The essence of branding is in a ‘… (Location 1159)
It begins with creation of innate value and through branding, that… (Location 1159)
The world begins to see a connection between your product or service and the value they can… (Location 1160)
Without great value, you cannot build a… (Location 1161)
The good news is that many marketing organizations as well as freelance experts are available today who can even guide the early-state organization till the time in-house guidance becomes available… (Location 1164)
differentiation really ‘happens’ when the enterprise focuses on all the six elements simultaneously… (Location 1167)
Stand for something. Choose tools with care. Develop your own methodology. Build quality in whatever you do. Innovate—ask yourself, what is new and… (Location 1168)
Once the founding team has thought through the DNA, mission, vision, values and the all-too important subject of differentiation, it is time… (Location 1172)
A business plan is essentially a strategy document with particular emphasis on the fiscal… (Location 1173)
It drills down details to an extent that you have a three-year view of your sources of income, your investments, your expenses… (Location 1174)
Just as you would not try to build a house without a floor plan (though, technically speaking, you could), you do not build a serious enterprise and run it year after year without a serious… (Location 1177)
It is not enough to enthusiastically say, ‘I have a great idea.’ You have to be able to say, ‘I have written a great… (Location 1179)
The purpose of the written business plan is to raise funding, no (Location 1186)
doubt, but it is not the primary reason. (Location 1186)
The primary reason is to create the blueprint of the house before one begins construction, even though the blueprint may keep changing as you go along. (Location 1186)
You use the essence of the blueprint to attract alliances, customers and key employees. (Location 1187)
exercise. The people who are looking at funding you know that business plans change. (Location 1193)
they are not necessarily worried about the details. (Location 1193)
They certainly are worried about your ability to think through issues, make a personal commitment to an overall plan, and whether you possess the flexibility and the resilience to change gears as the world around changes. (Location 1194)
They certainly assess how much you can work with numbers, how much you are able to see things in a 360degree perspective, how well you read the market and the competitive landscape and your affinity to the planning process itself. (Location 1195)
ISSUES TO ADDRESS AS PART OF THE BUSINESS PLAN What is the mission and vision of the organization? What is my product or service? How will it evolve as a family of products or services? What is the competitive landscape? How are other leading players serving the market? What trends do market research and analyst reports indicate? In what way will I be different? Why should someone buy my products or services? How will I get my first, paying customer? How will I price my goods or services? What will be my marketing strategy? What organization structure will I need? What critical skills do the founders possess and which ones need to be supplemented? What capital expenditure will be needed and why? How have I determined the adequacy and the cost? What revenue expenditure will be needed for the same period? (Location 1199)
How is my cost structure different from that of the competition? What is my three-year cash flow? When will the organization reach break even? What is the funding plan? How much of it will come from personal capital, how much from venture funding and what portion from loans? What is the plan for recruitment, training and retention of people? What are the R&D plans? How will the activity be sustained over time? What are the manufacturing and distribution plans? (Location 1208)
What are the various risks involved in building the organization? In what way will the team de-risk those? (Location 1213)
The purpose is to make sure that you have indeed thought through all the issues and also to uncover for yourself what you do not know. (Location 1216)
A business plan, written well, helps to attract the right talent and the right kind of investors. (Location 1217)
It becomes the basis for negotiation while attracting investment. Remember, when you raise equity, you are in effect giving away ownership. (Location 1217)
good business plan, written well, will set the tone for negotiating how much ownership you have to trade for how much money. (Location 1218)
Some things in the business plan are bound to go completely awry due to unforeseen contingencies. (Location 1219)
Inevitably, as you meet different people, particularly prospective investors, you will have to refine the assumptions, your understanding of the market, alliances and competition as well as costs. (Location 1228)
It is a good idea to save the progressive versions and discuss them in detail amongst the founding team so that you are able to debug the documents as you go along. (Location 1229)
we dwelt upon the subject of company positioning and business overview. This chapter looked at the competitive landscape and did an analysis of the major competitors globally in terms of their strengths and weaknesses and how we would be different from them. (Location 1235)
Having detailed all of the above, we went on to identify the risks to the business. These ran into twenty-odd risks that spanned people, business, geopolitics, investment climate, execution and many other issues. (Location 1244)
The business plan you write is not going to pan out exactly the way you envision it. (Location 1247)
It is a well-thought-out piece of strategy based on which you sign the investment term-sheet and you must believe in the contents. (Location 1248)
The business plan is a classified document and should not be indiscriminately distributed. It is best not to forward it as an electronic copy and have a serially numbered hardcopy given to anyone who must have it. You (Location 1249)
Choosing the Right Investor The moment of raising capital is the moment you breathe life into the unborn child. (Location 1263)
It is a defining moment, one which will have a deep, cascading impact on many things downstream. (Location 1265)
In today’s world, there is more money chasing a few good ideas than… (Location 1267)
So, if you truly have a good idea and a team in place that will sweat it out, there… (Location 1268)
Before you press into action, it is always a good idea to look around the experience of similarly situated… (Location 1270)
and talk to knowledgeable and trustworthy finance people to determine the most… (Location 1272)
your own savings or a small loan. If it is something that requires a dozen of you to sweat it out for a year, seek an ‘angel investor’— usually a wealthy private investor who… (Location 1274)
Early-state funds can be up to a few million dollars and the venture capitalist (VC) would expect a… (Location 1277)
Usually, if you are doing well, the organization is shaping up as something valuable and the relationship with the VC is healthy, your VC… (Location 1279)
Each time you raise money, you dilute the ownership… (Location 1280)
The trick is to raise enough money, well before your current working capital runs out and from… (Location 1281)
The process of raising money is full-time work and if you have to do it too often, it is a huge distraction from the actual… (Location 1282)
Choosing the right investor is almost… (Location 1284)
I believe, whenever you make any choice, you also choose… (Location 1285)
It is important that you choose investors who understand your business—in other words, stay away from… (Location 1289)
Anyone who puts in hard-earned money must and will hold you accountable and you better… (Location 1291)
It is good for everyone, particularly so for the internal controls, systems and processes that will fall in place when… (Location 1292)
Once a quarter, a couple of days of concentrated interaction with your investor is essential to the… (Location 1293)
Often people confuse the role of the investor with that of a rainmaker—someone who will make your business wildly successful… (Location 1295)
If you have not figured out by yourself how to sell, do not expect your… (Location 1296)
Some investors overplay their ability to get you business. You would do well to largely discount that as a reason for… (Location 1298)
Some of the real key considerations are the source of capital, the quantum of equity being sought, the quality of participation in board meetings (assuming they have a board position—it depends on what you have negotiated), the accountability being asked for in return for the money and, finally… (Location 1300)
You would do well to have a good lawyer and an accountant when you negotiate the actual terms… (Location 1303)
Though you should not shop around only on the basis of valuation (how much money in return for how much of ownership you would get) and must be very clear about what kind of investment and investor… (Location 1306)
The deal is not done until the money has… (Location 1308)
Above all else, you must sense the right chemistry with the people dealing with you from the investor’s side. If, for some reason you do not like someone at a personal level early on in the equation and the dislike persists, do not… (Location 1311)
An entrepreneur is a very special person. He may be a nobody in the beginning, but he deserves to be treated with respect by the potential investor. If respect is missing, the two are not right for each other. (Location 1320)
probe the source of funding. Often, it determines how the investors will behave in the future and how they will deal with you as well as support you in times of difficulty. (Location 1330)
Large venture funds usually raise their money from sources like international financial institutions such as the World Bank, the IMF, large banks, mutual funds, endowments of universities like Harvard, Princeton and Stanford and wealthy individuals. (Location 1331)
Some in the last category could be successful past or current entrepreneurs themselves who know what is involved. (Location 1332)
Dealing with people who have transparent sources of funds is a far better option than turning to questionable sources. (Location 1333)
I would rather have an investor who knows my business and is able to appreciate possible downstream complexities than someone who is bound to extend to my business the rules of the game as he practises them. (Location 1338)
Also, people get to know who is investing in you and the reputation of your present investor often determines the kind of second-round investor you will attract in subsequent years. (Location 1340)
would also be wary of raising money from friends and family who love you but do not understand your business. (Location 1341)
and goodwill. Having said that, I would rather keep affection and business at arm’s length, specially if you want to build a professional organization. (Location 1343)
Pay in cash for things as much as you can. Where a loan is available and you can reasonably afford to repay it, take the loan. (Location 1348)
Reason: your equity may have value beyond your wildest dreams. (Location 1349)
Remember, if the company is a sound venture, the compounded annual appreciation of equity is likely to be many times higher than the reigning interest rate. (Location 1350)
Do not fritter away your stocks. Once given out, they may never come back. (Location 1352)
Early-stage investment in the organization brings in costly cash. (Location 1353)
In percentage terms, in the beginning, you have to part with more ownership for less money, simply because the investor is assuming higher risk. (Location 1354)
it is important not to lock up early-state funds in buying fixed assets like land and building. (Location 1356)
Fixed assets attract depreciation and this reduces profitability. Reduced profitability means reduced valuation in later times. (Location 1356)
it is not a good idea to own such assets—it is better to spend that money in R&D, development of talent, opening new sales offices and building the brand in the pre-IPO stage. (Location 1360)
These would generate higher returns and improve the bottom line. (Location 1361)
Finally, if you are able to take the company public, the cost of money falls drastically. (Location 1362)
Good companies are able to command a premium for the stock they sell and that additional money comes with less dilution. (Location 1363)
large-scale capital expenditure using early-state finance may not always be a good idea. (Location 1363)
Fiscal prudence is always key to gaining investor respect. (Location 1364)
This is most pronounced during the pre-valuation days when you are courting the investors. (Location 1365)
An entrepreneur must not lack knowledge in basic finance before talking to an investor. It may be a good idea to acquire that knowledge through a series of sit-down conversations with an expert, such as a chartered accountant. (Location 1366)
The ideal thing to do is to choose a founder or bring in an early-state employee with a finance background. (Location 1368)
All entrepreneurs—even people who start a not-for-profit organization—will do well to understand basic accounting, finance, audit and the principles behind corporate governance. (Location 1369)
VCs make money if and when the company is acquired by another buyer or it goes public. At that time, if the value of the share is higher than the price point at which the VC had subscribed, the VC is able to offload the holding and take the proceeds. After keeping his share for the cost of fund management and profits he must retain, the VC distributes the gains among his own investors. (Location 1375)
The fundamental difference between a VC and a banker is that the former does not ‘loan’ money for usury. (Location 1377)
The VC makes money only if the enterprise makes money and becomes valuable in the eyes of subsequent investors. (Location 1378)
VC takes enormous risks in choosing the right venture. That is why his investment is known as ‘risk capital’. (Location 1380)
The reason we need to understand this equation is to appreciate that VCs are not in love with (Location 1381)
you. They are not in love with your business. They are here, legitimately so, to make money, so that they can go and afford to fund the dream of many more start-ups like your own. (Location 1382)
Usually, you get the VC you deserve. (Location 1385)
In order that a VC is able to justify his existence, he requires what is called an exit option. This is a pre-defined event like a buy-out of the VC’s stake by another financial institution or the sale of shares through a public issue. (Location 1385)
The best way to handle them is educated engagement—keep them fully, transparently posted at all times. Maintain a professional relationship. Do not ever take a position with them that you know is not truthful. (Location 1388)
Just as it is important to look at the source of the VC’s fund, it is equally vital to look at which other companies the VC has previously engaged with. (Location 1390)
how many has he succeeded in helping the organization all the way to the initial public offer? What value has the VC added in helping, advising and coaching the entrepreneur? Know that you have every right to ask for references, just as the VC will seek references before funding you. (Location 1391)
The last word: try and get an investor who takes the long-term view. It could take as long as five to six years before the organization can provide the exit option. (Location 1399)
Getting Good People and Keeping Them (Location 1404)
In today’s hyper-competitive world, the war for talent precedes the war for market share. (Location 1409)
When we started MindTree in 1999, we paid extraordinary attention to the first forty critical positions in the company. (Location 1410)
We felt that if we chose the first forty MindTree Minds right, treated them well and empowered them, they would in turn take care of the first four hundred. (Location 1411)
That is how the concept of fractal leadership works in building an organization. (Location 1412)
You must have a written job description for each role and a clear articulation of what kind of competency is needed to fulfil the role. (Location 1417)
This not only helps to be objective about the choice of the individual but also gives the incumbent a sense of professionalism. (Location 1417)
Do not commit the job title—you can always tell the person that if he or she matures well enough, the title will follow. (Location 1419)
Not everyone is cut out to work in a start-up organization. Early in the life of MindTree, I wrote down what I thought were the nine elements needed to work successfully in a start-up organization (Location 1426)
It is imperative that such issues are discussed with prospective candidates so that they come with their eyes open. (Location 1427)
Once people are in, it is important to give them their objectives, provide them the freedom to co-create the organization and hold them accountable. (Location 1429)
The best thing we did at MindTree was to pretend from the first day that we were indeed a big company. (Location 1431)
Note: I argu that stifles creativity. Processes are not necessarily good.
Nothing binds people better than trust, freedom, accountability and stretch. (Location 1434)
Just by virtue of being a founder one would not be entitled to any special privileges or accelerated career growth. (Location 1435)
All founders agreed that they were willing to report to a non-founder if the job so required. (Location 1436)
The second thing we all agreed was that none of our immediate blood relations would ever work for MindTree. (Location 1437)
However qualified and competent they may be, the presence of kith and kin can create challenges in a professional environment. (Location 1441)
Right from the beginning, create a competency-based matrix and let the wage administration be done by a professional. (Location 1445)
The next thing to do is lead the way with personal examples of stretch, productivity and accountability. (Location 1448)
you are not the employer. The business is. (Location 1457)
five things in managing high-performance professionals: set up a performance management system that everyone understands, communicate with people with evangelical regularity, listen to the voice of your people through formal and regular perception surveys that are conducted by an outside agency, focus on development of leadership and, finally, create a support network for your leaders. (Location 1458)
Competent people often join a start-up because it is the next best thing to starting out on their own. (Location 1462)
Some of them, however, achieved their past success working in a large organization and may find performing in a start-up not all that simple. (Location 1463)
Sometimes, people can be starry-eyed and romanticize the idea of making it happen in a start-up. Sooner rather than later, they could become a liability. (Location 1464)
There are also those outstanding people who, for some reason, need an emotional safety net of sorts and do not feel confident of doing their own thing. (Location 1466)
Rather, they prefer to live their start-up dream by working in one. (Location 1467)
They need to be understood, nurtured and valued. (Location 1468)
Some of the important aspects of working with such people are: stretch goals, freedom, constant communication, encouragement in risk-taking and creation of a strong peer group. (Location 1468)
If the founding team has figured out everything and all it needs is a bunch of order-takers, why should brilliant people take the risk of working in a start-up? People seek inclusion in strategy and problem solving. (Location 1475)
Towards this, you have to constantly inform them of issues, problems, opportunities and concerns. For this, they must have access to information at all times—even when it is inconvenient. (Location 1477)
95 per cent of the people must get access to 95 per cent of the information, 95 per cent of the time. (Location 1479)
There could be perfect reasons for seeking such privacy, but with competent people around, you cannot shroud yourself in secrecy. (Location 1483)
The next issue is about nurturing risk-taking in the team. (Location 1487)
In start-ups, the risk-taking of the (Location 1488)
entrepreneur is often over-rated. It is not his or her ability alone but the collective risk-taking ability that defines the character of the organization. (Location 1488)
encourage people to take risks? Consider three things. Give them a job when they are only 60 per cent ready for it. Two, allow them to fumble and make mistakes—sometimes, very expensive mistakes. Three, rotate the top performers at least once in two to three years. (Location 1489)
The charm of a start-up is that it can create many start-ups within a start-up. (Location 1491)
There is a certain beauty, a very special charm, when a plant is just a sapling with all of three leaves. (Location 1493)
Entrepreneurs must understand the currency of that spirit. (Location 1494)
Remember, for a long time, being a start-up within a start-up will remain a sought-after experience. (Location 1495)
In most start-ups, inadequate attention is paid to the subject of leadership development. (Location 1502)
A workplace is a social microcosm. In it, people learn best when the learning is voluntary. (Location 1511)
The KM organization built more than thirty communities of practice, an entirely volunteer-driven effort which focused on human capital management. (Location 1512)
They chose their own areas of interest, created their own agenda, chose their own leaders, decided on when and where they would meet. (Location 1513)
The responsibility of the management is to provide physical and electronic infrastructure, coffee and snacks, some reward and recognition and generally stay out of the way. (Location 1514)
IC Sweden, born out of pioneering work done at Skandia, in Stockholm, assesses the intellectual capital of an organization, in the same way people assess the financial capital and publish it as a balance sheet. (Location 1517)
One of the challenges in creating a high-growth organization is always assimilation. In most young organizations, it happens in an ad hoc manner. It is seldom geared to meet varying needs and in most places, there is a one-size-fits-all approach. (Location 1521)
Assimilation is the starting point of an engagement and if done well, not only adds to the retention rate, but it actually unleashes new energy which every new employee wants to bring in. (Location 1522)
When you take in a new employee from the campus and train him or her in your way of doing things, it is akin to growing a sapling from a seed. It is easier to do this as compared to assimilating a lateral employee who is more like an uprooted, grown-up plant and hence, likely to wilt before finding new roots. (Location 1528)
People do not want to subscribe to handed-down vision and value statements. (Location 1534)
At least the first few hundred people must be fully engaged in the design of the vision and the values. (Location 1535)
When something is memorable, it is most likely to spread itself and then, fractalize all over again. (Location 1537)
When that time arrives, people must feel that they were suitably rewarded for making it happen. The way to do it is to upfront settle the amount of ownership that must go in as an Employee Stock Option Plan (ESOP). (Location 1539)
The amount of ownership that must be kept aside for people depends on the compensation and benefits philosophy, the nature of the business, and how long you want the pool to last. (Location 1541)
It is important that founders do not administer the ESOP themselves—it must be done by professionals within the system. It is also critical that the founders do not dip into the employee stock option plan themselves. (Location 1544)
People need a much bigger reason than money alone to give their best to an organization. (Location 1548)
Employee stock options must be generous. But each time they are distributed, they should have been earned well. (Location 1551)
Building the Process-focused Organization (Location 1556)
The birth of an organization is a creative process. Only creative people start companies. (Location 1557)
While there is no denying the fact that starting something new is a creative act and requires a very generative, nurturing mindset, there is a general misconception that the essence of the start-up process is devoid of process-oriented thinking and action. (Location 1558)
Most start-ups hit a glass ceiling sooner or later because they fail to respect the power of the process. (Location 1563)
respect process. Building a company is about growth. Growth of new ideas, products, services, people, distribution channels, internal systems, and procedures. (Location 1576)
While growth is fundamental to survival, all growth is inherently destructive—it usually involves a tussle between centripetal and centrifugal forces. One set of imperatives wants to get away from the core and expand at the seams. (Location 1577)
In many ways, the process is also like plumbing. It cannot be an afterthought. (Location 1581)
You have to frontload the process into the organization-building activity. (Location 1584)
Before going further, I have to tell you something basic. The process is not about compliance. It is not about what is called ‘certification hunting’. (Location 1585)
means, building a process-focused organization must be part of the top management’s vision. They must see it in every small aspect of the organization’s functioning and lead by example. This requires the top management to learn the fundamentals of quality, choose the right process leadership to work out and implement a process framework in the organization, and personally review process deployment and adherence at each step. (Location 1590)
In order to ensure that the right financial processes fell in place, great attention was paid to the format and periodicity of financial reports. (Location 1597)
The key thing about building process centricity in an organization is to pretend that you are a big company right from the start. (Location 1603)
Note: It may not be a good idea
