succession planning : need of the day

SUCCESSION PLANNING: NEED OF THE DAY

You grow a business from scratch and you would not like it go under after you are not handling it. Businesses make a fine legacy to have aren’t they? Who can’t remember Succession of Ratan Tata by Cyrus Mistry? Was it a finger snapping decision? A big No. Cyrus mistry was groomed to take the Position. In this age of multinationals, succession planning becomes more important than ever. First of all what is succession planning? In layman, it is enabling the smooth transition from one person to another for a specific job, or group of persons in case of expansion. Let’s define it: Succession planning is a strategy for passing each key role within a company to someone else in a way that company continue to run smoothly after incumbent leader is no longer in control. In understanding there is just one word which makes the difference between layman and standard definition: strategy.

Strategy entails the evaluations of the skills, identification of the potential replacements inside and outside of the company. From there on the plot differs, for the internal replacements training is the step forward. But in case of outside the company various other factors come into play company values, work culture etc. A hit leader in a company can’t be same success story in another company. That’s why in todays’ world of share market where company can lose a lot due a loss of faith in company by buyers. This makes the need of succession planning even more important.

For the succession planning every company has a succession plan with some names on the paper. The question is whether it can be operational or not?? With HR being in sync with the vision and strategies of the company can create a functional succession planning in tune with talent management program of the company. This practically ensures that employees have developmental opportunities to fine-tune their leadership skills and guarantees a greater chance at success for the succession planning program.

Some of the important things to keep in mind when making the succession planning roadmap are:

v  Stars vs. All: Some focus on the employees who give the best ROI, some on all the employees. With less people we can focus more as in the case of stars, but doing so we alienate a lot of people who resent special treatment to some and it cause low morale. So obviously the better way is to take into consideration all the employees.

v  Internal or External: Developing a leader is a tedious job so take a shortcut and bring an already tested leader simple isn’t it?? But the past studies has clearly shown that internal leaders are far more successful than external with exceptions in case of company changing its direction and in case of shorter duration. Else internal development of the leaders is the way to go.

v  Diversity: In the present people always seek similar people for mentors or protégé leading to common thinking all around the office which can have negative impact on the growth of the company. That’s why diversity plays a crucial role in the development of the company and is a must figure in the succession planning.

v  Alignment of the talent management with the succession planning: From a strategic point of view, Company always try to encourage cohesiveness among the workers and also try to formulate a proper channels for the developmental program for the employees which promotes the retention. And if it is done in the accordance with succession planning need for external searching for leaders can be reduced significantly.

v  Syncing of HR with Company strategy: Clarity in the terms for Future objectives and the way company is going to pursue it will help in succession planning.

Till now we have talked what points should be considered in making the succession plans. And now will talk about the Factors affecting the succession planning.

v  The first point should be the establishment of the Business goals of the owners. This allows the HR policy makers to shift their policies accordingly.

v  Transfer of management responsibility: Especially in family businesses children take over from their family, in that case proper evaluation of the children become necessary as it will help in finding the weaknesses and allowing the company a chance for hiring a specialist to support the leader.

v  Retirement goals: It starts with how much time the leader is going to remain active in day to day operations. It helps in framing a timeline for the succession planning.

v  Target date and contingency plans: Dates are important as it takes time to formulate all the details for the succession. And the in case of any fluctuation from the plans the contingency planning see to it that business runs as smoothly as ever.

Talking about the succession planning in Indian context, it is almost in sync with global world. That planning exists on paper not in practice as much. External hiring is very high which clearly shows that they don’t build the leaders internally. But awareness among the Indian companies are growing about the need of succession planning. The proper implementation here faces several challenges such as: Not having a standard measure for the evaluation of the internal and external candidates. There is also a lack clear strategy regarding the present and future performance. In case of multinationals low understanding of the local geography also contribute towards the faulty succession planning. Talent management body of the companies are also showing lack of intent on the internal leader building processes which contributes towards not so successful succession plan.

Keeping all the above in mind, we have to understand that to create leaders we will have to take bets and chances. We will have to stick with the people and support them as down the line it look fancy to have the technical terms which evaluate the people, at end of the people scoring high on the parameters can perform low and vice versa making it more important to have the succession planning in the tune with company’s future. 

     

E-commerce in India

E-commerce :Electronic commerce is trading of goods and services with the help of digital technology mainly with help of internet.It has presence in all business models, B2B,B2C,C2C,C2B.

E-commerce allows the companies to establish its market presence along side with establishing a strong customer relationship.It was in 1960s that first e-commerce transaction happened over electronic data interchange on VAN networks.But the big thing that changed the shape of e-commerce was starting of Amazon(1995)and e-bay(1995).

Coming on to the Indian context,India has an internet user base of 35 crores.Over the last 15 years due to the boom in internet and mobile sector in India the scope for the e-commerce is huge as that can be clearly seen with 30% CAGR of the e-commerce industry in India for the last 6 years.Indian e-commerce industry is about 16 billion$.But still Indian E-commerce is in its infancy as it contributes to only 0.6% to the GDP of India.With Only 12% of Indian population doing online transaction as compared to 50% of the neighbor china Indian e- commerce industry has long way to go.

The various reasons for such a high growth rate are convenience,lower prices and price comparision. The other reasons for the high growth can also be Rise of smartphones,secure transaction gateway ans easy issue of credit and debit cards.These thing clearly portray a rosy picture of the e-commerce industry in India,But the reality is not so simple. E-commerce is facing multiple challenges on different fronts.The first challenge is finding a way to grow a consumer base, as only 12% do online transaction which is lower than the Internet user percentage. Th next challenge could be the logistics,that is the timely delivery of the product,product return etc.Language is also barrier, not a major one but still a barrier with E-commerce English dominated and only 35% of Indian knowing it.Cash on delivery is the most preferred way of payment accounting almost 60% in e-tailing,But its not profitable for the companies due to various financial reason. FDI in E-commerce is not allowed in India which is also a major challenge for the industry.
E-commerce market in India has started to become crowded and complex with several players fighting for a fair share of customers’ mind and wallet. As the competition in the e-commerce heats up, the companies are using multiple business models in order to get customer attention including:
• Inventory model e.g. Shopper Stop, Croma
• Social networks e.g. TripAdvisor
• Aggregator Model e.g. Ola Cabs
• e-Marketplace e.g. Flipkart, Snapdeal,
• Transaction broker e.g. Irctc
• Click and collect service: amazon
E-tailing : Also called as the online retail.From the perspective of the general consumers this segment is most important as the customer base is larger.It contributes 29% of the total e-commerce industry in India.

Major players in the e-tailing segment are flipkart,snapdeal ,amazon,myntra. Here one point is interesting to note that Myntra has become app only and flipkart is on its way. This clearly establishes a trend for future in E-tailing that app only is the way With almost 70% of this business done over smartphones this has paved way to app only business.In the past year only Billion has become million for the E-tailing companies.Due to high investments and in the race to capture large customer base advertisement budgets of these companies are very high.

From the above data we have clearly seen that E-tailing has been making its presence felt in the market, 29% market share is the proof of that which has grown tremendously and travel segment of e-commerce has not grown at same rate leading to its decrease in the market share.

Listing of alibaba has clearly shown the way of future of the e-commerce. In Indian context,softbanks'627 million dollar deal with snapdeal, ola acquiring of taxi for sure or the high valuation of these companies flipkart at 11 Billion dollars.

These all things point towards huge potential for the future.But there is still the question of sustainability of these companies.Indian government initiative Digital India shows a great scope for the Future of Indian E-commerce industry.

 The way ahead:

Social media as lead generation :facebook,twitter and other social platforms has become the place for Analyzing consumer behavior and targeting the customers from them.

M-commerce : wireless transactions  is the road ahead with almost 60-70% traffic coming from mobiles i-pads companies should focus on this platform seriously. Other things to focus on would be online grocery stores,price comparison sites and last but not the least innovation in logistics which will help the company in operating efficiently.

Indian e-commerce Industry is here to stay and grow with expectation of growing up to 70 billion dollars. 

Marketing : a general perspective.

The most common misconception that exists among the people is that they equate Marketing with Advertisement.But they are not totally incorrect or fully right. Advertisement is a sub set of Marketing.So, the first question That needs to answered is what is marketing ? From my perspective it is a process through which companies create values for the customer and captures value from the consumers. Basically, consumers have needs, companies try to fulfill the needs through their offerings of products or services creating the value for the consumers.In return they capture values from the consumers in terms of profit and consumer equity.Here building a strong relation with customers becomes a priority.

As earlier written marketing is process, This process is based on the planned use of the Elements of the marketing mix.The elements which are used are:
a) Product:The product is the key. From here only the marketing process would start. depending on the consumer wants and demand Product is developed for creating a value for the customer.Here the companies decide which features to included, which will appeal to its target customer, other factors which are taken into consideration are its projected life cycle,Its potential for diversification in terms of product use and product modification.

b)Price:Pricing strategy directly affects the profit margin over all a profit,market share(market penetration or skimming).It also affects the consumer's perceived value of the product. Many consumers judge price as a factor for quality and also for reference pricing.Thus making it very important to select the pricing strategy on the basis of  our target customers.

c)Promotion:This is the part which is equated as marketing by general public.Though this element of the marketing mix, we make our target consumers aware about our product.It can be divided into two parts Traditional ways of communication and online marketing.Such as through Sales promotions,television ads,print media(Traditional),Social media campaigning, flash ads, online banners,etc (Online Advertisement).

d)Place:Then comes the point of purchase,where we will sell our product its also depends on our target consumers.It also helps in formation of our distribution strategy. Product could sold through not only specific purchase stores, but also online, door to door etc making it an important part of our strategy.

The following are also called extended elements of marketing mix or service marketing mix.But in the present market product and service has become so intermixed that its better to include them and give them equal importance.
e)People:Now a days people are not only judging the product but also who delivers
them.so it has become very essential to select and train right people the right way in not only delivering the service but also in communication prior to that in talking with channel partners. Deals can made on basis of people also. Gone are the days where we make good product and it will sell on its own. Now you need the right people to sell the product.

f)Process:This is the element through which we decide How the product or service will be delivered.An efficient process helps in increasing the customer satisfaction which in turn create customer loyalty and increasing customers life time value for the organisation.

g)Physical evidence:It has its importance because It helps the company in differentiating with competitors. Eg. A consumer would buy a product from place whose ambiance is better.It also helps the company in charging premium for its product.It also include corporate symbols such as logos etc.Packaging forms an important part of the physical evidence.

For the developing and emerging markets there is also a need of two more elements of the marketing mix.
h)Power :In the Developing and emerging markets,Government plays a big role, So for a company to expand its business there the right kind of incentive is to be provided to the government  which means how would it be useful for the government and economy there in general?that can be through infrastructure development, job creation etc?
 
i)Public relation:Its also related to expansion of the business in the new markets,this part focuses on familiarizing with the local market scenario and the consumer behavior which in turn helps in formulation of the other marketing mix elements.

Through these steps a full marketing process is determined which at at last helps in creating the value for the consumers and capturing the value that is profits an consumer equity from the consumers for the company..