This happened yesterday – We settled down for a discussion first thing in the morning and a colleague says- smile guys, its a good day!
But, it was a spirited discussion . And the smiles quickly vanished.
We shared our views and debated. And I realised I was talking with a lot of emotional energy.
I told myself, its ok – because I am committed and passionate about this. But there was clearly another voice telling me – its not ok.
And then something interesting happened later in the evening.
I was reading Pegasus Bridge June 6 1944 – By Stephen Ambrose and came across a section where it talked about the front in North Africa.
In particular the book was introducing Hans von Luck – a protege of Rommel – who agreed with his British counterpart to fight a civilised war.
Every evening at 5 p.m. the war would stop. The Brits would break for tea and the Germans for coffee. They would then get on the radio and share the details of captured personnel and any messages these POWs may have for their families – usually messages confirming that they were ok.
In one particular instance, the Germans learnt that the Brits had got a fresh supply of cigarettes. Von Luck offered to trade a captured British officer for a million cigarettes. The British countered with 600K. And a deal was stuck.
But the prisoner refused to be exchanged because he insisted he was worth the million initially asked for !!
I was shocked !
These are men at war. They are willing to kill and die. Yet they manage to keep humour and civility intact.
I am lucky to have read about this incident the same evening I was telling myself its ok to lose my cool. It has helped put things in perspective.
I went back to my colleague and shared this story. Thanked him for opening the meeting with a request to smile.
He has decided to make sure that every meeting he attends, he would put smile(s) as the first agenda item.
And I am inspired to go a step further. To keep humor intact at the workplace – the place where we spend most of our waking hours does not need to be such a serious place.
How do we drive adoption for rules in a country, a community?
Should a good rule be easily enforceable too?
I think it should be.
If we want to build a society where most follow the rules, enforceability should be an important criteria.
To decide whether a new rule should be introduced or not. Whether an existing rule needs to be modified or scrapped.
It is my belief, that when we have rules that can be easily broken without any consequences, it sends a signal to the community. And this signal usually leads to a gradual loss of respect for the law of the land and for the fellow citizens.
Let me explain with an example of two rules, which most of us are familiar with
Front seat passengers should wear seat belts while traveling in a car
All vehicles should have a valid pollution-under-control (PUC) certificate
While both these were introduced in the last 20 years or so in NCR, the first one has seen significant levels of adoption whereas we all know that very few cars and bikes have a valid PUC certificate.
If you ask me, the reason is very simple.
For seat-belts, the fact that you are complying (or not) is visible each and every time you are driving. Any traffic-cop who sees you not wearing the seat belt can pull you over and issue a challan. So you run a very high risk of being punished if you are out on the road w/o wearing your seat belts.
Contrast this with the pollution certificate rule.
A traffic cop on the road has no clue if your vehicle currently has a valid PUC certificate or not. Hence the cop would rarely pull you aside asking for the certificate. It is usually asked for when you have already been stopped for some reason and they feel that they might put more pressure on you if you are w/o the PUC. Hence as car owners, we are usually not very afraid to drive w/o this certificate. The risk is just too low. And hence very few cars actually have a valid PUC certificate.
So while almost everyone knows that the laws need them to drive a non-polluting vehicle, very few actually end up doing so.
And I think its very simply just the issue of how easily the rule can be enforced.
In my opinion we should have few rules, but all should be enforced strictly.
I have always been intrigued by product design and by extension policy design (& implementation). If the government were to look at itself as a start-up technology venture, the policies, schemes and guidelines issued by the government would possibly be the “products” of this venture.
And like any good product manager, one should study not just the immediate impact of change(s) in product design but also the delayed and maybe stickier changes in consumer behaviour.
And that is what I want to share with you today.
Shift in dietary habits due to Green Revolution
Sometime last month, I was visiting an uncle of mine – someone who is in his mid 70s, reasonably fit, exercises regularly and has borderline diabetes. While we sat at the lunch table, I noticed that he had multiple other grains in his roti as against mine which was from just wheat atta. It seems most physicians recommend adding ragi, chana etc in your atta mix as a healthier alternative.
And that’s how our conversation began.
And what came out was quite surprising for me.
It seems in their childhood days in villages of western U.P., wheat was not the staple grain. Infact it was considered a delicacy and wheat-chapattis were made when they had guests over. And he comes from a well-to-do farmer family. This was not because of economic constraints, it was just how things were.
So as the elders started talking about this significant shift in probably the most important component in a typical North-Indian meal – roti – what emerged was that the shift was triggered by the Green Revolution in all probability.
This lunch group which included scientists and government employees, agreed to the following sequence of events:
Government stepped in on the supply side with higher yield varieties, irrigation support etc
It also created artificial demand by setting up floor prices thus encouraging farmers to grow wheat. Making wheat a critical component of Public Distribution System also ensured a big buyer for wheat at these prices. This in turn ensured that a higher percentage of land under cultivation now got sowed with wheat
This brought the otherwise-considered-premium grain into the middle-class households at a very affordable price. Imagine if suddenly, you find yourself able to afford an item which for years or maybe generations was considered premium, chances are you will buy more of it to feel good (my assumption)
And they all started eating wheat more, skewing our diet heavily towards this singular grain in North India.
And the subsequent generation(s) like ours has come to believe that our rotis have always been a wheat-only product. Coz wheat rotis is what we ever saw.
Am also very clear that India’s self-reliance on nutrition has been contributed heavily by progress on wheat and rice. So there’s no doubt that this has worked as planned.
The fact that wheat may not be the healthiest grain is probably something new. Gluten intolerance was probably unheard of during the Green Revolution.
But with the new facts before us, should the government re-evaluate its focus on just a handful of grains in its policies.
What if, the support prices on wheat are relaxed a bit? What if other “healthier” grains are encouraged similarly? Will the cost of managing supply chains and warehousing for multiple grains offset the advantages of a wider-spread in our diet?
Many questions and I don’t have any answers.
Low availability of fodder for cattle
Ask any elder who has seen standing wheat crop in the fields now-a-days vs in the old days. One thing they would tell you is that the wheat crop is now stunted. Its much much shorter.
This am told, was probably one of the biggest breakthrough in developing High-Yield-Varieties. The nutrients and water is no longer “wasted” in the growth of the non-grain-yielding parts of the crop.
But on the flip side – this has increased the cost of cattle-management for local farmers. Why?
There just isn’t enough fresh fodder for the cattle. The non-grain part of the wheat crop was used as fresh and dried fodder for the cattle that the farmer had at home. This is gone.
Acquiring New To Bank (NTB) customers is a key agenda for most Digital Heads at Banks.
Its only logical that online acquisition budgets are getting bigger, given the following:
Consumers are spending more and more time online. Digital is the best channel to start a dialogue
Digital channels are tracked exhaustively. You can measure the return on each dollar spent.
Digital channels allow data to flow at higher speeds. This could translate into better context, targeted products, straight-through-processing, upfront checking of applications etc etc.
Tablets have provided the ideal form-factor to do an assisted digital sourcing, as has been proven by the success of ICICI Bank
Regulatory changes are also making it easier to acquire online – Aadhar database, eKYC, wet signatures to go away in some instances etc.
Here are 3 seemingly simple tips for anyone who is doing NTB acquisitions today at a banking set-up.
Choose the right on-boarding product
Which product will you focus on to get more customers into the bank?
Many would say, we do not have a choice as each business line would be relying on the support of digital channels. Be as it may, it might be prudent to take a step back and understand the advantages of choosing a particular product for consumer on-boarding vs another.
Do we reject a lot of applicants for this product. Typically in case of credit cards and most loan products, the rejection rates are high and hence we need to sieve upfront to reduce the cost per lead or cost per account. Are there other products in the portfolio which have lower rejection rates e.g. most liability products may fall in this category
Does the product start giving me more data and insights about the customer? Can I build strong contexts to pitch the next product. Any payment product would be a good bet as it starts building a lot of relevant data points about the customer.
Is this being sold or the customer has a well articulated need? Loans should see a higher conversion as against credit cards because the customer has a need. But the scenario may change if the card is free and loaded with offers.
Is the process straight-through? If not, how many steps are there? The higher the number of steps, lower would be the conversion rates.
Competition – given that you are not the only bank trying to talk to the customer, the kind of marketing money it takes to interrupt a customer would increase for the segment with higher competition. Back in 2007 the bid rates for Personal Loan keywords moved almost 100% in less than 6 months. Every bank in India was focusing on acquiring Personal Loan customers.
Manage the Drop-out funnel
With all the tools available for tracking, doing A/B testing it is so much easier than before to manage the drop-outs in the acquisition channel. Over the years, industry has also learnt and created a best-practices library. Use it. E.g.
Acquiring through partners who have data on customers is more efficient and reliable. This is why most banks are exploring SME financing through ecommerce platforms.
Allow applicants to save applications and continue later. Across channels.
Build for a true OmniChannel experience. As the customer journey will definitely toggle devices
Provide for assisted filling of forms. What might sound simple & easy to you may be confusing to others
Authenticate the communication fields upfront (email, mobile). This allows you to follow-up on leads more proactively.
There are no permanent rejections – a customer who is not eligible today may be eligible tomm. Except may be those who are already over age :-).
Build data-led acquisition platforms
What has changed significantly in the last decade is the amount of data prospects and customers are generating across various channels and touch-points. The future (if its not already upon us) of digital acquisitions is data-led.
E.g. acquiring SMEs for working capital financing can happen in multiple ways:
Bidding on search engines for loan keywords
Putting up banners on B2B portals
Showing banners to specific SMEs on a B2B portal basis some cuts
Deep integration with portals to get fresh data about SME’s transaction, reputation, growth trajectory etc.
And so on.
Its easy to see that as the richness of data improves and also its freshness, the credit decisioning becomes better.
But this is not easy to do. It requires bringing together credit , product and digital teams into a room and understanding clearly the opportunities ahead of us.
Some banks are already working hard to evaluate the new data-points available and calculate their influence on the traditional credit models. Its a matter of time before this becomes the new normal.
Equally important is to acknowledge and understand, that partnerships will be essential in this journey.
And what enables partnerships to work (apart from a culture and mindset) is a technology architecture that is geared towards APIs.
APIs are like Legos – you own some, some you borrow – but put together you make something exciting.
While the consumer technology companies understand this, banks have traditionally been slow to embrace deep connects into their systems. The risk is too high ! After all banks have been trusted with the consumers money and data.
But to stay viable, banks will need to embrace partnerships, learn to publish and consume APIs, while still not compromising the customer promise.
Nadal is the king of clay. Given a choice of surface, I guess he would choose clay 9 out of 10.
We all get it – one should play to one’s own strength. Its obvious in sports, but most of us fail to apply the same rule(s) in business.
As most banks embrace digital, this is one rule we should not forget.
Look at the bigger PSU banks in India – it’s fair to assume that they have a big list of areas to focus on when it comes to going digital:
Channel migration of customers onto internet banking and mobile banking
Higher activation and spends on their credit cards
Straight Through X-sell campaigns
Improving the customer on-boarding experience
Reducing TAT for customer transactions and queries
…..and so on
It sure can be overwhelming to look at such a big list. One might also be tempted to look at the success stories of the likes of ICICI, Citi or HDFC Bank and try to replicate their strategies.
Will that work? Chances are it won’t !
Why? Because those banks are different. Different in terms of their customer profiles, their capabilities and their partner eco-systems.
When I look at the RBI’s data on ATMs, POS, Credit and Debit cards for Nov 2014 – its clear to me that for PSU banks, ATM presents a unique opportunity.
Digital experience starts from a conversation, an interaction or a transaction – and for PSU banks these are happening in plenty on their debit card portfolio at the ATMs.
SBI has 23.6K onsite and 22K offsite ATMs.And they had 2.4 crore ATM transactions !
Their digital strategy should have a clear ATM story:
What opportunity does the ATM transaction present ? E.g. the bank knows where the customer is at that point of time. Using solutions like mTuzo they can share Offers-near the ATM and migrate customers from ATM to ATM+POS.
Citibank has just launched Funds Transfer functionality through ATMs. Or one could do mobile recharges.
PSU banks do not have an aggressive sales culture. This could be used to their advantage at the ATM, where its not a warm body pushing a product but maybe the thank-you screen which is “suggesting” a product basis past behavior of the customer.
Hence, for any bank embarking on a digital journey, its imperative to ask – What is our strength?
We have all heard about the boiling frog phenomenon – Put a frog in boiling water and it would immediately jump out. Instead keep a frog in cold water and heat the water slowly, the frog would just boil to death.
Companies fail to see the “inevitable change” in consumer behavior. They fail to notice or counter the growing might of a competitor. More often they fail to see the gradual but sure detoriation in culture, motivation of their teams. All because it happened gradually.
So I was wondering what are the ways to avoid a Boiling Frog phenomenon?
Get a frog from outside every once in a while : No brainer right? A frog which is not in the gradually-heated-waters would know that there is something wrong. The water is already too hot and they should jump out. Why then do most companies shy away from bringing in fresh talent? Why do we feel afraid of getting people from diverse backgrounds – unrelated industries, different academic, economic and cultural backgrounds.
Have a thermometer track the temperature : Consumer surveys, market research, risk metrics, red flags etc – we do it all , still this happens – you would say. Well, sometimes you need a frog who can read the thermometer ! Would you want the frog to see just the temperature, or would you want to show how much temperature has risen, or show that its now in the danger zone or better still sound an alarm loud enough that makes the frog jump out of water 🙂
Let the frog see that the water is being heated : If our frog was smart and put in a transparent container, chances are it would see the flame or the burner. It might also note the rising temperature in the thermometer even if it doesn’t feel the heat yet. Will it help business leaders if they have real-time feed from the market about whats really putting them under stress.
And if nothing works, just pull the damn thing out yourself.
Many a times, we face a situation where we feel that our team members do not have trust and confidence in us or each other. Whether its a corporate set-up or the political leadership of a country or a sporting team, trust and confidence are the key ingredients for a motivated spirited performance.
And I think this can be done by just one simple thing – Say what you would do and do it !
Do this and you can gradually build trust and confidence in your team. I say gradually, because its a journey best taken with small steps. When Jeff Bezos said that he wanted Amazon to be the most customer-centric company, he followed it up with key changes like empowering customer care executives to do refunds etc. Why has Infosys been the stock-market’s darling for so long?
Fail to do this and you start depleting the reserved trust capital. Narayana Murthy had once written a passionate article about how leaving Infosys was like giving away your daughter in marriage. But when he got his son in at the unexpected role, he lost a lot of the trust and respect he had built over years.
And there are many ways one can fail in this.
1. Not saying what you would do
Are you not sure what is expected out of you?
Or are you not confident enough to articulate it and sharing it with others?
If its former, I guess some introspection and coaching might help. But if its latter, take the smallest of actions/goals and share it. Share it in the simplest of words, leaving minimal room for ambiguity.
2. Should I share my chosen path or the targeted goal?
Share an action path if thats what you can stick to. E.g. We will track query resolution time as a measure of performance for our customer care department.
Choose a goal if you are confident of achieving it. Do not start off with an overly ambitious goal. Strings of small success will get you the motivated team you need for the mega-win.
3. Not doing what you said
Did the priorities change? If yes, did you update your stated goals/path? No? Then its a failure to deliver on point 1.
4. Did you try yet fail to deliver ?
This is not a problem at all. Because your efforts would have been witnessed by atleast some within your team. They would know your determination and resolve to achieve the chosen goals and thats enough to build confidence. Personally I have always rooted for the underdog challenger – who is in the ring with the champion because he fought many rounds and spilled blood and sweat getting into the championship round.
The reason sticking to this simple rule – Say what you would do and do it – is so critical is that it makes it easier for others to judge and evaluate you. It sends a clear signal about your priorities and allows others to start believing in those same priorities.
I have had the privilege of working with some really smart leaders and looking back I feel they were very clear about what they (or their teams) are aiming at and ensured they either achieved it or did their very best getting there.
It was quite some time back that I read the book – Making of India – by Ranbir Vohra. This was December 2006 and I had a habit of taking notes from any book that I read. Sometimes even movies. So what you read below are my interpretations of the historical narration of India’s journey of acquiring its national identity.
Good Leadership involves Policy Making. More effective than individual action.
For Political leadership, this has obvious relevance, but I would feel safe betting that this is true in a business context too. Imagine the kind of ripple-effects that the CEO can create, by clearly articulating effective rules and policies. This would include not only the core values that the organization wants to pursue but also how to conduct itself in the marketplace. How is performance measure, how are incentives decided, how do you gradually build the culture and the DNA of the organization. All of these could be better achieved by effective policy making esp in the context of a big organization.
Learn to trust your team and delegate effectively.
Sometimes you need to lead a team of people you don’t trust or consider incompetent.
Sometimes, with the bigger goal in sight, you might be forced to choose a path where you end up leading a team of people you don’t really trust. Or whom you consider grossly incompetent. And inspite of your drastic opinion if the party(or organization or team) enjoys the support of the people (or the market in case of an organization), it wouldn’t be wise to remove them as the first step once you assume charge of the new office. Create an able leadership that is recognised by making the machinery work and slowly remove them in a phased manner. While this might sound scheming to many, I saw this as a way to keep the bigger interests of the party at the center.
To get your way through a tough negotiation- Create a diversion
Sometimes when you are stuck in a tough negotiation situation, a serious distraction might help. Create a new clause and pretend that this is what matters most to you. But be careful to choose something that the other party would find almost impossible to concede. Now with this new clause coming in, the other party (hopefully) focuses energies there and might go easy on the original bone-of-contention.
Need for Symbols. How do you inspire people?
Gandhiji’s Dandi march is a great example of how you build support. Find something that many can relate to or find an activity that many can participate in. Symbols can similarly act as a strong rallying point for your team/supporters. Symbol doesn’t necessarily have to be a prop or a logo or an image. It could be a simple tradition – like wearing Khadi . Create traditions that can start to mean a lot to people involved over a period of time. And you might end up creating a legacy that generations can relate to.
Also it is important to stay connected with your organization. Stay connected by talking to them regularly. Start by clearly articulating a dream, a vision, a reason to exist (for you, for your professional self, for the party or for the organization). And then keep re-iterating this vision. Make them believe in it as much as you do.